Sat, Mar 25, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Marinus Capital: deleveraging and regulation cause unintended consequences for markets

Friday, August 01, 2014

Bailey McCann, Opalesque New York:

New research from Connecticut-based credit specialist Marinus Capital shows that the wave of deleveraging and regulation that followed the financial crisis is creating unintended consequences for financial markets. The paper looks at the real consequences of experiencing and reacting to debt super cycles in the economy which can span 30 years.

"This is a follow up to some of my previous work, there's a myth that the G7 has seen massive deleveraging and that's just not totally true," explains research author and Senior Strategist at Marinus Capital Advisors, Sam DeRosa-Farag in an interview with Opalesque. "We haven't mitigated the risk in the system, we've just transferred the risk from leverage to liquidity. Risk in the system does not go away, it just gets transformed. In many ways there's more alpha derived from this transformation, because the market is much less efficient now."

In a recent paper, DeRosa-Farag examines how leverage cycles rarely run together. For example, financials have continued their effort to deleverage while renewed CEO confidence and advantageous financing is causing leverage to tick up in corporates. Additionally, households are at an inflection point after shifting from a position of broad deleveraging back to using leverage. All of these moves are set against a back drop of government intervention into markets through quantitative easing and regulation.

"In retrospect, the......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Hedge fund liquidations in 2016 surpass 2009 levels, new launches decline[more]

    Benedicte Gravrand, Opalesque Geneva: Even as the hedge fund industry's total assets exceeded the $3tln milestone last year, hedge fund liquidations increased. So much so that 2016 had the highest number of liquidations since 2008, claims the latest HFR Market Microstructure Report, re

  2. Hedge funds find no joy in macro as returns lag Trump rally[more]

    From Gulfnews.com: In 2017, macro hedge funds were expected to shine. So far? Not so much. It's been a far from impressive first two months for funds that trade around macroeconomic events. Discretionary funds rose just 0.3 per cent through February, according to Hedge Fund Research Inc., while the

  3. Strategies - Billionaire investor Marc Lasry shares how he's playing markets right now, Classic models are failing FX hedge funds desperate for return[more]

    Billionaire investor Marc Lasry shares how he's playing markets right now From CNBC.com: Buy on the prospect of deregulation. Sell on the enactment of deregulation. That's the strategy that billionaire investor Marc Lasry is implementing, according to an interview with CNBC in Las Vegas

  4. Opalesque Exclusive: Aberdeen makes the case for the lower mid-market[more]

    Bailey McCann, Opalesque New York: Aberdeen Asset Management has released a new paper focused on lower mid-market private equity. According to the paper, this segment of the private equity market is gaining popularity with private equity investors that are looking for multiple expansion and less

  5. Hedge funds await outcome of French elections, feel pinch on lower oil prices & weak dollar[more]

    Komfie Manalo, Opalesque Asia: Hedge funds felt the pinch of lower oil prices and weak U.S. dollar as the Lyxor Hedge Fund Index was marginally down as of the week ending 14 March, Lyxor Asset Management said in its Weekly Briefing. The Lyxor He