Financial Times (February 26)
These are, according to Citigroup analysts, “distinctly echoey times.” Their “research suggests that, if it is not careful, China may be on track for a new wave of Japanification.” China is now remarkably similar to Japan’s post-property bubble era in, for example, demographics. China’s population is “now shrinking as Japan’s did years earlier… a reminder that after 1990, Japan’s housing price index fell as the 35- to 54-year-old cohort decreased.” These and other factors call for warnings about “the potential risks for China’s banking system.”
Tags: 1990, Analysts, China, China’s banking system, Citigroup, Demographics, Echoey, Housing price index, Japanification, Population, Property bubble, Research, Risks, Shrinking, Warnings
New York Times (January 16)
“Intent on reversing America’s decline in the world’s production of cutting-edge semiconductors, the federal government has begun what is arguably the government’s largest foray into the private sector since World War II.” This “more muscular approach to industrial policy” is “pockmarked with risks. On balance, the record of government trying to improve the functioning of the private sector is poor, and particularly in complex sectors like semiconductors, the challenges are great.”
Tags: Complex, Cutting edge, Decline, Government, Industrial policy, Intent, Private-sector, Production, Reversing, Risks, Semiconductors, U.S., WWII
Investment & Pensions Europe (December 23)
“After seeming to hit a wall last week, negotiations” at COP15 ultimately “yielded an agreement on biodiversity – in a move that some hope will make it easier for the finance sector to address nature-related risks to their portfolios.” Similar to the breakthrough Paris Agreement, the Kunming-Montreal Global Biodiversity Framework “lays down a plan for dealing with the ecological crisis over coming years,” codifying a “commitment to ‘take action’ to conserve 30% of land, sea and freshwater sources by the end of the decade – known as the ‘30×30’ pledge.”
Tags: Biodiversity, Breakthrough, Commitment, COP15, Ecological crisis, Finance, Freshwater, Kunming-Montreal Global Biodiversity Framework, Land, Nature, Negotiations, Paris Agreement, Portfolios, Risks, Sea, Take action
Bloomberg (October 26)
“The latest bear-market rally in US stocks has brought investors off the sidelines and provided a welcome reprieve from three quarters of gloom. But traders now need to ask themselves whether the risks continue to justify the potential returns.” Are they “truly nimble enough to chase this latest short-term rally to culmination without toppling off the inevitable cliff at the end of it.”
Tags: Bear-market rally, Gloom, Inevitable cliff, Investors, Nimble, Reprieve, Returns, Risks, Short term, Stocks, Traders, U.S.
Harvard Law School Forum on Corporate Governance (September 18)
ESG “is not a unitary principle or even a collection of a fixed set of particular principles. Rather, ESG encapsulates the range of risks that all corporations must carefully balance, taking into account their specific circumstances, in seeking to achieve long-term, sustainable value.” The ESG label may be new, but “corporate boards and management have long considered ESG factors and risks in setting and executing strategy…. Doing so is associated with superior financial results, and consistent with long-accepted norms as to the place of business in society.”
Tags: Balance, Boards, Circumstances, Corporations, ESG, Financial results, Fixed, Management, Principle, Range, Risks, Society, Strategy, Sustainable, Value
Reuters (June 24)
“A scramble for lithium” is creating “new risks for electric-car makers. Breathtaking prices are prompting the industry to find new ways to secure the crucial battery ingredient,” often through “direct contracts with miners and refiners” with “options to buy 100% or more of a project’s planned production capacity.” Although “vertical integration is tempting when times are tough,” it can leave buyers overstretched and “dealmaking under duress makes miscalculations more likely.”
Tags: Battery, Breathtaking, Buyers, Capacity, Dealmaking, Duress, EVs, Lithium, Miners, Overstretched, Prices, Production, Refiners, Risks, Scramble, Vertical integration
Institutional Investor (May 25)
“Managers that want to run fixed-income funds with a focus on environmental, social, and governance factors face larger research challenges than those in stocks. But the massive opportunity in bonds may make the uphill battle worth it.” Compared to equities, the “patchwork of standards” increases the “risks of ESG fixed income funds.”
Tags: Bonds, Challenges, Equities, ESG, Fixed income, Funds, Managers, Opportunity, Patchwork, Research, Risks, Standards, Stocks, Uphill
Bloomberg (April 12)
“The feel-good days for global markets at the end of March are firmly over.” Suddenly, everyone is afraid of economic slowing. “With monetary support rapidly receding and recession risks rising, investors are hunkering down. Companies resilient to an economic slowdown such as health care are back in favor. Ditto cash and dividend-paying stocks. Meanwhile, demand for hedging is creeping up in the options market.”
Tags: Afraid, Companies, Dividends, Feel good, Global markets, Health care, Hedging, Hunkering down, Investors, March, Monetary support, Recession, Risks, Slowdown
USA Today (March 21)
“Groundbreaking federal regulation unveiled Monday could change how Americans – and American companies – think about climate change.” A proposed SEC rule would require listed “companies to disclose the risks they face from global warming. Much as homebuyers are protected by rules requiring a seller to disclose problems, the new SEC rule would allow investors to judge how well or poorly a company is prepared for the future costs of a warming planet.”
Tags: Climate change, Future costs, Global warming, Groundbreaking, Homebuyers, Investors, Judge, Protected, Regulation, Risks, Rule, rule Disclose, SEC, U.S.
Bloomberg (March 20)
Paul Clements-Hunt coined the acronym. ESG. He now thinks “the ESG fund industry is headed for a ‘shakeout’ over the next five years.” In successfully attracting trillions of dollars to these investments, “the finance sector has ‘sprinkled ESG fairy dust’ on products that do little to account for environmental, social and governance risks.” These and other shenanigans will increasingly come into “jeopardy.”
Tags: Clements-Hunt, ESG, Fairy dust, Finance sector, Fund industry, Investments, Jeopardy, Risks, Shakeout, Shenanigans
