The CrossBorder Capital Blog

Is It Time To Dump Credits?   Skidding Global Liquidity conditions warn of an upcoming credit crisis. Already the danger signs are there, from plunging EM bonds to changes in the term structure of interest rates. We fear US high yield credits could test 500bp over and EM US dollar credits could break through 600bp, over equivalent duration US Treasuries    

How Tight Is the US Federal Reserve? Three Charts That Warn About Upcoming Recession     We have been warning for months that deteriorating Global Liquidity data will negatively impact the World economy by end-2018. Now, latest economic data point to a worrying wobble in US business activity. We have been concerned throughout this year that the US Fed is hitting the brakes harder than widely believed because rate hikes are occurring on top of balance sheet shrinkage. Reliable bond market metrics point to the real risk of an upcoming slowdown, while the recent collapse in investors’ risk appetite warns that an economic inflexion point is close.    

The Battle for Middle Earth – The Changing Direction of Global Capital Flows     A major realignment of global capital towards Asia and away from the US looks to us underway, fuelled by future growth opportunities and the prospects of higher profits from Chinese expansion into Central Asia. Set against crashing Global Liquidity, we are concerned that the recent huge build-up of US$ 4 trillion of speculative foreign capital in US financial assets flags an upcoming US dollar sell-off in 2019? America is trying to halt these shifts, as it fights to retain the dollar’s status as the international standard of value.