The writer is founder and chief executive of Algebris Investments
In markets, the most valuable currency is trust. As investors, we learnt this simple fact over the years, sometimes the hard way. Trust underlies every number, from earnings reports to macroeconomic data. It represents the key bond between investors and investments. When trust is lost, it takes a long time to rebuild it.
The Trump administration is taking over at a time when investor trust in the US is high but creaking. Combined foreign ownership of US marketable securities stands at just over $31tn, a testament of confidence. However, the past three years have seen the boundaries of the system that prevailed post-2008 being tested. As such, keeping trust strong is paramount and difficult at the same time. Today’s tariff-induced market sell-off is proof of this.