How tail-risk has fallen

Author Cam Hui

Posted: 18 Feb 2012

There is no doubt that tail-risk, or the risk of a catastrophic meltdown of the financial system, has fallen dramatically in the last couple of years. Consider that two years ago, Europe was mired in one summit after another over the eurozone financial crisis. In 2013, EU ministers are holding a crisis summit meeting over *gasp* horse meat (via The Telegraph):

The summit comes as supermarkets in Britain were urged by the Food Standards Agency to test pork, chicken and other meats for cross-contamination.

Meanwhile, Tesco has admitted that it had been selling frozen spaghetti bolognese ready meals which were between 60% and 100% horse meat.

Tomorrow’s meeting has been called by Ireland, which holds the EU presidency, and where the scandal began after horse meat was discovered in frozen beef burgers.

The country’s agriculture minister Simon Coveney said the summit was being held to discuss “whatever steps may be necessary at EU level to comprehensively address this matter”.

Measures on the agenda will reportedly include labelling processed meat for its origin. Meanwhile processed meat manufacturers in Ireland have been asked to carry out DNA testing in a bid to reassure consumers and export markets.

How times have changed.

Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. (“Qwest”). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.

None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.


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