Dry weather, wet money: the fatal tandem for food price

Posted on 30. Jul, 2012 by Steve Ohana in Weekly Focus

Food, unlike money, cannot be printed. Even worse, whereas the printing press may have the power to decrease the cost of money, it also has the power to increase the price of food. One year and a half after the Tunisian and Algerian food riots which triggered the Arab spring, will QE3 spark a fresh [...]

Watch out! The risk-off portfolio is waking up…

Posted on 28. May, 2012 by Steve Ohana in Weekly Focus


If you want a confirmation that we have entered into dangerous waters, simply take a look at Riskelia’s risk-off portfolio.

This portfolio is composed of all the most rewarding risk-off bets (long safe haven bonds, short carry trades/equities/commodities positions), i.e. those that display strong positive momentums without bubble. When the risk-off signals are off, this means [...]

The victory of bondholders over shareholders

Posted on 07. May, 2012 by Steve Ohana in Weekly Focus

The Friday price action, where the S&P lost more than 1.5% while the high-yield bonds progressed, is a good illustration of a long-term trend that settled in the past 10 years: the undisputed victory of bondholders over shareholders.

Compared to standard risk on assets, risky bonds (high-yield, investment grade bonds, inflation-linked securities, emerging bonds) have the [...]

The Eurozone woes resurface

Posted on 21. Apr, 2012 by Steve Ohana in Weekly Focus

Two weeks ago, we warned against the eventuality of a recoupling between Spain and the other core Eurozone countries. Well, this is exactly what is currently happening… When looking at figures 1 to 3, we observe indeed that both from the equities and costs of risk sides, the markets have finally acknowledged the fact that [...]

From deflation to inflation: the Central Banks’ world of extremes

Posted on 17. Mar, 2012 by Steve Ohana in Weekly Focus

As central banks are literally flooding the world with liquidity (Figure 1), the Radar’s recommendations on oil and precious have surged by staggering 60% and 80% since the beginning of the year while the recommendations on grains and base metals have increased by a more modest 30% (Figure 2).

As shown in Figure 3, the EURJPY [...]

Increased diversification and de-risking of the EURUSD parity

Posted on 12. Mar, 2012 by Steve Ohana in Weekly Focus

As reflected in figures 1 and 2, the global integration factor has subsided on several parts of the financial system. The global integration factor corresponds to the proportion of global asset prices variance explained by the first common risk factor. This decrease in integration translates better diversification prospects within the financial system. Besides, we can [...]

Some takeaways from the precious flash crash

Posted on 05. Mar, 2012 by Steve Ohana in Weekly Focus

In an episode reminiscent of Sept 23, 2011, when the bullion quickly plunged by almost 6% for no particular reason, gold dropped over $100 intraday on Wednesday. This happened moments after Federal Reserve Chairman Ben Bernanke began testifying before Congress at 10 a.m. Wednesday. Almost immediately, prices on gold dropped more than 4%, silver prices [...]

After the fall of equities, corporate credit and base metals, will carry trades ever sink?

Posted on 17. Aug, 2011 by Steve Ohana in Weekly Focus

Last week, we reviewed the survivors of a deadly week for risky assets: carry trades, emerging bonds, corporate credit, with a bunch of equities and commodities were the last to stay afloat after the worst week the markets had experienced since 2009. Today, we inspect last week’s survivors, reaching the following conclusions:

Some emblematic equities have [...]

Review of the troops after the storm: have cyclical assets capitulated yet?

Posted on 09. Aug, 2011 by Steve Ohana in Weekly Focus

The long haven/short cyclical assets stance gained more clarity last week after the rally of OECD countries’ bonds and the slump of European equities. However, it is too early to declare the victory of the haven assets over the cyclical assets army. Indeed, although the recent storm has claimed new important victims among cyclical assets, [...]

Revisiting the anti-euro crisis portfolio

Posted on 22. Jun, 2011 by Steve Ohana in Weekly Focus

Despite the agreement reached on a “voluntary participation” of private creditors to the Greek debt refinancing, the solvency risk stays intact. Absent a comprehensive debt restructuring, the euro zone debt problem will not find a definitive resolution.
In this context, instability in the euro zone has resurfaced. The wave has started from OECD Sovereign debt and [...]