Money and Finance
- Which Way For Bonds? Mapping A Path Forward - By Bill Gross
Q: Can you explain what is happening in markets now? Gross: In 1980, the Federal Reserve, led by Paul Volcker, tightened the quantitative noose to tame double-digit inflation, fueling an unprecedented tailwind for bond prices. Thirty years later...
- Leaving The Hotel Euro? – By Steve Keen
So if Europe’s leaders could just take a step back and realise that their currency isn’t really a currency, they could perhaps convert it into what it most closely resembles – a European SDR – and reduce at least the government-mandated part of...
- Big Long Is New Big Short As Bass Joins Subprime Bet
Investors who made some of the biggest profits from the 2007 bust in U.S. mortgages are once again in agreement. This time, they’re going long. Hedge fund manager Kyle Bass, who made $500 million betting against subprime debt in the crash, is raising...
- Hussman Weekly Market Comment: Not Over By A Longshot
On Friday, the yield on 1-year Greek government bonds closed above 135%. As I've noted in recent weeks, the bond markets continue to reflect expectations of certain default on Greek debt. All they are working out now is the recovery rate. As of last...
- John Mauldin: Kicking The Can Down The Road One More Time
My friends at GaveKal point out that this is “… the sixth time in 18 months European leaders have announced a definitive solution to the Euro crisis. Should this version of the final bailout be taken any more seriously than the first and second solutions...
Money and Finance
The Yield Hunt - By Michael Lewitt
Anyone who does not understand that the price of every stock and every bond is being artificially altered by the fact that interest rates are being manipulated by the Federal Reserve should not be risking any money in the markets.
Monetary policy has driven investors to search for yield in the riskiest assets. Both subprime mortgages and Greek bonds have rallied to some of their highest levels in years on the back of central bank policy. In the U.S., the Federal Reserve is taking a lot of mortgage paper out of the market, which is forcing investors into riskier subprime paper. At least there are signs that the housing market has stabilized and is beginning to recover. In Europe, the European Central Bank (ECB) has somehow convinced some investors that Greek bonds are worth buying. But the Greek economy is continuing to fall into the abyss, and another bailout would just be throwing (more) good money after bad. If Greek bondholders are not forced to take losses – even if they are German and French banks – there will be little chance of Europe solving its debt crisis. But just as investors who speculated on an upset in Venezuela’s election are licking their wounds if they didn’t sell fast enough, those who are betting on a payoff on Greek bonds are likely to be injured here (more on Venezuela below).
- Which Way For Bonds? Mapping A Path Forward - By Bill Gross
Q: Can you explain what is happening in markets now? Gross: In 1980, the Federal Reserve, led by Paul Volcker, tightened the quantitative noose to tame double-digit inflation, fueling an unprecedented tailwind for bond prices. Thirty years later...
- Leaving The Hotel Euro? – By Steve Keen
So if Europe’s leaders could just take a step back and realise that their currency isn’t really a currency, they could perhaps convert it into what it most closely resembles – a European SDR – and reduce at least the government-mandated part of...
- Big Long Is New Big Short As Bass Joins Subprime Bet
Investors who made some of the biggest profits from the 2007 bust in U.S. mortgages are once again in agreement. This time, they’re going long. Hedge fund manager Kyle Bass, who made $500 million betting against subprime debt in the crash, is raising...
- Hussman Weekly Market Comment: Not Over By A Longshot
On Friday, the yield on 1-year Greek government bonds closed above 135%. As I've noted in recent weeks, the bond markets continue to reflect expectations of certain default on Greek debt. All they are working out now is the recovery rate. As of last...
- John Mauldin: Kicking The Can Down The Road One More Time
My friends at GaveKal point out that this is “… the sixth time in 18 months European leaders have announced a definitive solution to the Euro crisis. Should this version of the final bailout be taken any more seriously than the first and second solutions...