The Financial Times – Lex: Low yields Investors are squealing and tutting as bonds yields edge ever lower. Some decry the lack of returns, others warn of a bubble that will surely burst. Irrespective of where bonds are heading, however, everyone should at least heed two important truths: the first concerns returns, the second risk.… Continue reading Low And High Interest Rates
The Financial Times – Lex: Private equity Mixed signals make private equity a tough industry to predict. In some ways, 2010 has been less easy to navigate than the depths of the credit crunch. Back then the market moved in just one direction – down. In the second quarter of 2010, private equity managers raised… Continue reading Private Equity
The Financial Times – Speculators take coffee to 12-year high Coffee prices jumped to a fresh 12-year high on Monday morning as speculative interest in the soft commodity ratcheted up on the back of tightness in the physical markets. A disappointing harvest last year in central and south America has squeezed the market more than… Continue reading Speculators Betting On Higher Coffee Prices
The Financial Times – Brokers face fines over role in flash crash Brokers who allowed high-frequency traders to have access to the markets without undertaking proper checks on them face potential fines as part of a clampdown following the “flash crash”, the head of a US watchdog said on Sunday. The Financial Industry Regulatory Association… Continue reading Flash Crash
None Today
We have been repeatedly asked this week if the bond market is in a bubble. Here is our answer: We are in the middle stages of a bond bubble if we choose to define “bubble” as self-fulfilling prices moves (you buy it because it’s going higher). In any mid-stage bubble, previous non-participants develop new justifications… Continue reading Is There A Bond Bubble?
Comment Please participate in our poll in the right-hand column. In late June we asked the same question and got the following results: So far the current poll’s results are more or less the same. A solid majority think there is not a bubble. Economist.com – A bull market in pessimism A lot has to… Continue reading Discussing A Bond Bubble
The Wall Street Journal – Big Bank Deal Signals More to Come First Niagara Financial Group Inc. agreed to acquire NewAlliance Bancshares Inc. for $1.5 billion in the biggest takeover of a U.S. bank since late 2008. Thursday’s deal between the two healthy financial institutions triggered speculation that a long-awaited wave of consolidation is about… Continue reading IS M&A Back? The WSJ Wants To Believe It Is
<Click on chart for larger image> Bloomberg.com – Jobless Claims in U.S. Rose to Highest Since November Claims for U.S. jobless benefits jumped to the highest level since November and Philadelphia-area manufacturing shrank for the first time in a year, indicating the economy may be slowing faster than forecast. The number of unemployment claims unexpectedly… Continue reading Are Jobless Claims Flashing Recession?
<Click on chart for larger image> The Wall Street Journal – Japan Yields Hit New 7-Year Lows Japanese government bond yields marked fresh multi-year lows Thursday, as investors took the view that any moves by the Bank of Japan would be unlikely to stem the yen’s rise. The firmer yen has raised worries about Japan’s… Continue reading Are Japanese JGBs In A Bubble Too?
<Click on chart for larger image> The Telegraph (UK) – Ambrose Evans-Pritchard: Greek crisis refuses to go away The European Commission has approved the next €9bn (£7.4bn) tranche of loans for Greece but the underlying economy continues to deteriorate as Greek banks suffer a record loss of deposits and output contracts at a quickening pace.… Continue reading Greece
CBO.gov – The Budget and Economic Outlook: An Update The Congressional Budget Office (CBO) estimates that the federal budget deficit for 2010 will exceed $1.3 trillion—$71 billion below last year’s total and $27 billion lower than the amount that CBO projected in March 2010, when it issued its previous estimate. Relative to the size of… Continue reading The Budge Deficit