Macro Matters is a global investment blog brought to you by LGIM’s Asset Allocation team. We’re focused on sharing our most compelling thinking to help you become more informed investors.

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Macrobites

Splinter is coming

While the UK prepares to break away from the EU, the voting age population is evolving. When the transition concludes, younger people’s views could be significantly under-represented. Adjusting for this could lead to some very different conclusions.

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Economics

Owner pre-occupied?

When I first became an economist (don’t ask how many years ago!), the question I was most regularly asked by friends and family was: "when is a good time to buy a house?"  

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Economics

Bubble trouble in China? Of houses and hard landings

This is the third in a series of blogs that looks at the risks of a Chinese hard landing. In the first we argued that China still has important defences in the form of fiscal space. In the second, we discussed why the odds of financial crisis are not that high. In this blog, we ask whether China sits on a property bubble, which tend to end in violent and drawn-out recessions.

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Portfolio Thinking

How much sugar is in your sugar?

Soviet-era Polish cinematography is often a source of seemingly absurd catchphrases repeated for generations. “How much sugar is in your sugar” is a classic one from the quirky professor in the 1973 comedy Man-Woman Wanted. When we target particular factors within our equity exposures, I increasingly find myself taking on the role of the professor as I try to answer the question “How much factor is in my factor?”. It might seem like an odd question but we can answer this by relying on simple factor definitions and a holistic approach to combining factors. It’s only once we know what our true exposures are, that we can consider how we avoid any unintended secondary exposures that have the potential to sour the overall outcome.

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Economics

Champions League clique

The rise of Chelsea and Man City shows that it takes a lot of money to break into the Champions League elite, but once you're there, it creates a virtuous circle. The same is true for inflation. There is a self-reinforcing loop of high inflation expectations, wages and prices. But the 2014 oil shock looks to have knocked the US and Japan out. Consumers' inflation expectations remain stubbornly low.

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Economics

Clueless, but not complacent

As the old adage goes, prediction is difficult, especially about the future. So instead, we explain some of our forecasting philosophy and where, if at all, we might be able to provide some insight about the economic outlook.

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Macrobites

A filibusted flush

The filibuster is an important procedural device in the US Senate that makes it significantly harder to break the gridlock between Republicans and Democrats. President Trump argues that the "very outdated filibuster must go". But what is it? Why is it important? And what are the investment implications of throwing it on the Congressional scrapheap?

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