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Duration is an important concept in the world of Bonds. It measures the sensitivity of a bond to changes in interest rates. Thus, a bond (or a portfolio of bonds) that has a duration of 5 will be expected to move 5% in price for a change of 1% in the discount rate (i.e .the market rate of interest). A bond/portfolio with a duration of 10 would see a 10% rise/fall in price for a given 1% move in rates etc,etc. Ceteris Paribus, the longer the maturity, and the lower the coupon, the longer the duration of a bond – think of it in terms of how long it takes to get your money back; the lower the coupon payment on a bond, the longer an investor must wait before his/her investment is fully returned.

“Live everyday as if it were your last because someday you’re going to be right.” – Muhammed Ali There appears to be trouble ahead – the Brexit Vote, the US Presidential election, and the tensions arising therein, have created a dangerously entrenched set of opposing sides. It is happening across the globe, with potentially de-stabilising effects on markets. There are a number of flash-points which bear close attention.

“You can’t cheat an honest man” – 1939 Film by W. C. Fields.

“As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones” -Donald Rumsfeld 12/2/2002. “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so”- Mark Twain

In theory there is no difference between theory and practice. In practice there is. – Yogi Berra There has been increasing talk recently about the advent of “Helicopter Money” (HM). Even mainstream academics and economists are now starting to advocate it’s use to arrest the continued slump in demand, most recently noted here. But what is it, what does it do and does it work? …

“I would rather have questions that can’t be answered than answers that can’t be questioned” -Richard Feynman, Physicist. The markets currently present somewhat of a paradox – since the low point in February, the MSCI World Index has risen 13% (as has the S&P 500), becoming on one metric the most overbought since 2009, whilst at the same time seeing NYSE Short Interestreaching the same levels as 2008 (see charts below). This is a Schrödinger market – both bullish and bearish at the same time.