Many of the portfolios that we have seen in the last two years (not managed by Baffin), had an excessive concentration of domestic assets: stocks, bonds, real estate, etc. The tendency to overinvest in local assets is known as “home bias” and it is still a puzzle in the academic world. Assuming that the investors read more

The US government could be shut down this week, if Democrats and Republicans do not agree on a budget for the ongoing fiscal year. This is just the first and simplest political decision on fiscal matters in a series of decisions coming up. Extending the debt ceiling comes next. The real thing is a medium-term read more

The convergence of shocks over the last 2-3 weeks is nothing short of impressive.  Some of the shocks are: the escalation of events in the Middle East (different but concerning, Libya and Bahrain), the potential juncture for the euro with a sequence of high level meetings while a new bailout is about to be needed read more

Since the Financial Crisis we have highlighted the challenges ahead for G7 countries (fiscal and structural), and the natural result of currency depreciation and rebalancing vis-à-vis the up and coming group of strong currencies. Though the rate of EUR/USD has had sizable swings in the last 12 months, it is not far from where it read more

Our first reaction to Egypt (to read that post click on ‘Our first reaction’) and the approach thereafter proved to be the right, so far. However, we do think the events in Tunisia and Egypt introduce a new theme that was not there earlier and that merits careful attention. The Middle East is inevitably changing. read more

Fed Chairman Bernanke testifies in Congress today, for the first time in front of a Republican controlled lower house. Despite the news value, this invigorates a debate about the Fed mandate that is relevant in the current world context. The Fed has a dual mandate: price stability and full employment. The European Central Bank (ECB) read more

Last Friday’s events in the Middle East had significant effects in the global markets: the S&P dropped more than 1.5%, while the emerging markets indices fell between 2-3%. In this Sunday afternoon, we want to share with you where we stand before markets open tomorrow. The most relevant question is whether events will trigger a read more

The EU leaders are most likely close to key decisions about the future of the euro. The financial rescue package announced during the Greek episode of the crisis last year was designed to buy time in order to work on solving the fundamental problems. That package was not enough to stop the crisis domino at read more

The beginning of the year renders itself for rethinking medium-term issues, especially risks. As the ‘Market Views’ section of this site shows, we at Baffin Advisors revisit our views about the global economy and markets constantly. However, we used the beginning of the year to send a letter to our clients with an extensive review read more

Many have already pointed out the irony of UST yields making a most drastic upward move while QE2 (the second round of Fed asset purchases) is being implemented. In other words, as the Fed is buying UST bonds, their prices are falling impressively.  As can be seen in the chart, 10-year UST yields started a read more