A couple of months ago we stressed that Trump’s Presidency implied fatter tails, which meant that extreme scenarios were more likely than usual, at the expense of the status quo. The two extremes were clearly a negative scenario and a very positive scenario, reducing the probability of the center of the distribution. What has happened read more

A boring second round electoral process -as the victory of the ruling party candidate Dilma Roussef (PT) seemed certain- gained momentum last week when results of some polls became public.   Particularly, a poll by CENSUS showed an evident shrink of her advantage, with José Serra standing only 4 percentage points behind (see table). But the read more

The still incipient September market recovery appears to respond to data that negates the double-dip view and increases credence to the gradual recovery view. Our approach has been to cautiously position for the latter, within a broader theme of a structural change in favor of EM and other non-G7 countries. In other words, we continue read more

The high volatility of the last few months has generated panic moments in the markets, perceived uncertainty about future scenarios, and sharp inconsistencies in some of the public policy debates. Though there are reasons to marginally re-shuffle the probability distribution among the most likely scenarios, there is no real reason to change the base-case scenario. read more

Just came back from the IMF Annual Meetings in Istanbul, where I attended meetings with ministers and central bank presidents of more than 12 countries, as well as officials from the IMF and G7 governments. Here are a few concise conclusions from all those meetings, that will certainly take a bit more time to fully read more

Before heading to Turkey for the IMF annual meetings, let’s do a little reckoning of views and where things are going (from a big picture standpoint). Also, what are the themes that seem to be shaping this next IMF meetings this weekend, in terms of the debates going on and the agendas put together by read more

The table below illustrates a few interesting points about how different investments and strategies fared through the crisis and the ongoing recovery. The table below shows the price performance of the efficient instruments we would use to gain exposure to each of those sectors. It is by no means a complete list, just a few read more

The last three days of market selloffs (-3.4% in the S&P500, -4.4% in Europe, or -4.2% for the BRICs) has generated a debate on whether we are in for a more serious pullback. Some are saying that the rally had not been for real nor based on fundamental improvements. Numbers like “another -10/-20%” are being read more

Maybe this is not the time to try to think through the medium-term outlook of an asset class (but it’s easier to resume writing on this than to comment on the 90% tax on bonuses…). But I think one of the most interesting questions to think about is which countries will fare better than others. read more

After a week being back from my favorite southern country (Uruguay), I realize not much has changed in G7’s policy stance. At the same time, markets away from the US banking system seem to be normalizing. I think US policy continues to pollute the picture with its lack of clear direction/diagnostics. Every macro tool available read more