Global Market Commentary, Analysis and Investments
Somehow, we don’t think this is what Ben Bernanke had in mind when he launched another round of easy money five weeks ago.
Indeed, he promised us lower long-term interest rates. But this morning, the yield on a 10-year Treasury note just reached its highest level in more than six months – 3.28%.
[Read more...]If you want some bad news, then Doug Noland, in his Credit Bubble Bulletin at PrudentBear.com, has some for you. He reports that that “Global yields are on the rise.�
I was going to make a complimentary comment about how cleverly Mr. Noland conveyed such bad news in only five words; “Global yields are on the rise.�
[Read more...]Every time a frightening headline jolts the financial markets, investors flock to the relative “safety� of US Treasury bonds. But just how safe is a “safe� Treasury bond?
The most insidious and dangerous part of the global debt story is hiding in plain sight. US Federal debt is now roughly 85% of American GDP, according to “official� figures. But after including the present value of future liabilities like Social Security and Medicare, US debt-to-GDP soars to nearly 500%.
[Read more...]“Prices are liars,� says Passport Capital’s investing ace, John Burbank.
But even liars sometimes tell the truth. Trying to discriminate between the liars and the truth-tellers is every investor’s most essential – and most difficult – task. Some bull markets are the real deal; others are simply bear markets that would fail a polygraph test.
[Read more...]Yesterday was a “risk off� day. The dollar index floated above 79. Stocks and commodities got hammered.
Still, since our mind tends to wander away from the herd, we were struck by another sell-off that began earlier this month, and accelerated big-time on Monday…
There are many difficulties associated with being lazy and inattentive like me, such as superficially interpreting the title “Gold Vs Treasuries – Which Do You Believe?� which is an essay by Michael Pento, Senior Economist of Euro Pacific Capital.
This is initially perplexing to me because neither gold nor Treasury debt obligations have voices with which to speak any truths or lies, which means it is some kind of metaphor that I don’t immediately understand. I was going to make a big stink out of Mr. Pento’s insensitivity to us dimwits out here who are, as we say, “ain’t so bright.�
[Read more...]My wife is on the intercom and asking about whether or not I am coming out of the cocoon-like safety of the Mogambo Screaming Heebie-Jeebies Bunker (MSHJB) to have lunch, or maybe get a shower, or say hello to her and the kids, or pick up my mail, and maybe just stop acting So Damn Weird (SDW) for a pleasant change.
[Read more...]There is a debate now as to whether there is a bond bubble or not. I think we are in a bond bubble. This bond bubble is not only for Treasuries and corporate debt, but across the yield spectrum. Too many investors are looking for yield, and their quest will end in tears.
As all these people are looking for yield, they push down those yields. Plus, the Federal Reserve is doing its best to keep interest rates low. So the end result is that IBM can borrow for three years at 1%. But really, these factors affect the whole spectrum of interest rates and yields.
[Read more...]
The Kabuki Theatre of Demopublicans, Part II
A conversation with Doug Casey
The Gold Report: In the conversation titled On 2013, you say 2013 will be ugly, but merely a warm-up for 2014. Yet the economic trends appear to be positive: the end of quantitative easing by year-end, increased domestic oil and gas production resulting in inexpensive energy for decades to come, more manufacturing jobs, and less unemployment. Is this slow-growing economic recovery masking the effects of the deficit and unfunded liabilities, thus allowing politicians to kick the can further down the road? Why do you think 2013 and 2014 will be so bad?
[Read more...]Click for detailed story