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EUROPE’S ENERGY CRISIS IS KEEPING ENERGY PRICES HIGH
America leads the world in oil and gas production. We believe midstream energy infrastructure offers predictable cash flows to investors.
Banking Crisis Means More Inflation Risk
Investors have reacted to the aftermath of Silicon Valley Bank’s (SVB) failure by assuming tighter credit conditions. This makes sense over the near term. The US banking system has been increasing duration risk, and while SVB was more reckless than most they were not alone. Piling into long term government bonds and mortgage-backed securities required […]
The Fed Pivots To Financial Stability
Commercial banks have long benefited from depositor lethargy regarding rates. Although we now have a de facto guarantee of all commercial banking deposits, not just those up to the $250K threshold, customers are likely to pay a little more attention to return and risk, which will force banks to be more competitive. On the asset […]
Fed Catches A Few Gullible Bankers
Silicon Valley Bank (SIVB) succumbed to poor risk management in holding long term bonds funded with demand deposits. If that’s all there was to banking we wouldn’t need many banks. But at a strategic level, Quantitative Easing (QE) as pursued for too long during the pandemic created the conditions for poor decisions. Central bank strategy […]
Americans Work More Remotely
Real estate investors are keenly attuned to the Fed’s efforts to curb inflation. The Vanguard Real Estate Index Fund (VNQ) is down 18% over the past year, lagging the S&P500 which is –6% and the American Energy Independence Index (AEITR) which is –1%. Rising rates have cooled the hot property market that the Fed’s bond […]
Using Carbon Technology To Reduce Carbon
From time to time we come across new companies and technologies that offer the potential to reduce emissions, thereby contributing to the energy transition. One recent example is Sea Forest, an Australian company developing a seaweed-based food additive for cattle that will reduce methane emissions (see How Seaweed Can Fight Global Warming). A few weeks […]