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RMWC Perspectives

Coleman Andrews, RMWC's CEO and Chief Investment Officer, talks with investment experts and journalists about important topics.

"Election Surprise...Now What" 

"Problems, Pitfalls, and Politics"

Look for more shocks and volatility as the Fed and other global monetary authorities attempt, in an uncoordinated manner, to unwind the massive global monetary stimulus.

Painful unintended consequences are likely to abound, just as happened overnight when the Swiss uncoupled their currency from the Euro.  Political surprises in Europe and the United States add to the uncertainty.

"Three Daunting Challenges      

Over the past several decades, few if any periods have included such serious challenges to the world's economies and financial markets.

Economic stagnation, sovereign insolvency, and a massive global monetary experiment collectively pose significant risks, and the solutions require coherent policies and deft political leadership.

"The Fed Chairman's Inconvenient Quotes" 

With the Fed and other global monetary authorities undertaking an unprecedented monetary experiment, how confident can investors be that this monetary program will have the effects that the Fed claims it will have?

A look at what Fed Chairman Bernanke was saying in the run-up to the 2008 financial turmoil gives some insight into the Fed's record at predicting market outcomes.

"Which Credit:  Senior or Junior?"      

The Fed's Zero Interest Rate Policy has created great demand among investors to replace nominal yield that they traditionally received from fixed income instruments.

The resulting flows of capital, particularly into junior credit instruments such as high yield bonds, leave certain types of credit trading at premium prices, and a risk/return proposition in early 2013 that is very different from early 2009.

"Hedging in Today's Credit Environment

Effective hedging can be fraught with challenges that require hedging to be thoughtfully conceived and effectively executed.

Given the potential for market shocks from the effects of economic stagnation, sovereign insolvency, and the global monetary experiment, what considerations are important to successful hedging of credit instruments?