wisdom Posted June 4, 2015 Share Posted June 4, 2015 What does everyone think of what is happening in the bond markets? Could this be the beginning of the bond bubble busting? As other's and Roubini recently have commented there is a mismatch in bond ETF's - liquidity - could this lead to things getting out of the central banks control? Link to comment Share on other sites More sharing options...
frommi Posted June 4, 2015 Share Posted June 4, 2015 This just depends on your view of inflation. With so much debt around the world i can just not see long term inflation picking up, maybe for a year or so dependend on currency movements. But i am a little biased by Prem Watsas view, so maybe something else is going on. Who knows? :) But i am pretty sure that the low in german bonds is behind us, because negative 10 year yields just make no sense. But i doubt that shorting bonds is a wise idea either. Link to comment Share on other sites More sharing options...
HJ Posted June 8, 2015 Share Posted June 8, 2015 http://photos.caixin.com/2015-06-08/100816899.html http://photos.caixin.com/2015-06-08/100816899_4.html Figure this topic is as good a place to post these as any. Link to comment Share on other sites More sharing options...
investor-man Posted June 8, 2015 Share Posted June 8, 2015 http://photos.caixin.com/2015-06-08/100816899.html http://photos.caixin.com/2015-06-08/100816899_4.html Figure this topic is as good a place to post these as any. It's interesting. Yeah, this type of behavior is concerning. But at the same time, the Shanghai Composite Index has been flat to negative since '09, until the recent spike. All while the economy has been growing at a fairly decent clip. If the price chart went up in a slow and gradual fashion to reach the same price, like the S&P, I don't think alarm bells would be going off on threads like this one. In fact with the spike, it's roughly inline with the S&P over a 5 year time period. And as an aside, the Hang Seng is much lower than the S&P over the last 5 years. Link to comment Share on other sites More sharing options...
HJ Posted June 8, 2015 Share Posted June 8, 2015 I have long ago decided that I don't have a good handle on the Chinese market. I just thought these pictures are good for a chuckle. Don't know if you paid attention, but in the second picture, there is a Buffet picture. The Chinese next to the picture says the "Buffet Analytical System". And to the left of the picture, it says "100RMB, Understand it in one minute, Learn it in one minute". Link to comment Share on other sites More sharing options...
KinAlberta Posted June 10, 2015 Share Posted June 10, 2015 This just depends on your view of inflation. With so much debt around the world i can just not see long term inflation picking up, maybe for a year or so dependend on currency movements. But i am a little biased by Prem Watsas view, so maybe something else is going on. Who knows? :) But i am pretty sure that the low in german bonds is behind us, because negative 10 year yields just make no sense. But i doubt that shorting bonds is a wise idea either. Dr. Lacy Hunt On The Six Characteristics Of Over-Indebted Economies Posted By: VW StaffPosted date: May 29, 2015 07:53:28 AMIn: Videos http://www.valuewalk.com/2015/05/dr-lacy-hunt-on-the-six-characteristics-of-over-indebted-economies/ Link to comment Share on other sites More sharing options...
Gamecock-YT Posted June 10, 2015 Share Posted June 10, 2015 I'm usually not big on the macro stories, but this one is pretty solid: http://csinvesting.org/wp-content/uploads/2015/06/The-Pampas-precedent-Woodford-Funds.pdf Link to comment Share on other sites More sharing options...
Jurgis Posted June 10, 2015 Share Posted June 10, 2015 I'm usually not big on the macro stories, but this one is pretty solid: http://csinvesting.org/wp-content/uploads/2015/06/The-Pampas-precedent-Woodford-Funds.pdf Pretty solid, but at least 10 years too late. China wages are going up a lot and the China-deflation has pretty much played out by now. Link to comment Share on other sites More sharing options...
frommi Posted June 12, 2015 Share Posted June 12, 2015 Not really macro related, but these stories feel like its the end of 1999 again. http://microfundy.com/post/121345282105/how-bubbles-are-blown-biotech-edition-exhibit Link to comment Share on other sites More sharing options...
Liberty Posted June 16, 2015 Share Posted June 16, 2015 http://brooklyninvestor.blogspot.ca/2015/06/in-search-of-stock-market-bubble.html Link to comment Share on other sites More sharing options...
frommi Posted June 16, 2015 Share Posted June 16, 2015 http://brooklyninvestor.blogspot.ca/2015/06/in-search-of-stock-market-bubble.html Pointless to look at P/E ratios, there is no correlation between P/E ratio and next year or next 3-5 year returns. Shiller P/E has a small correlation. The risk is in earnings going down/margins contracting, not necessarily in P/E ratios contracting. Link to comment Share on other sites More sharing options...
petec Posted June 16, 2015 Share Posted June 16, 2015 The risk is in earnings going down/margins contracting, not necessarily in P/E ratios contracting. Those will be *very* positively correlated! Link to comment Share on other sites More sharing options...
petec Posted June 16, 2015 Share Posted June 16, 2015 China-deflation has pretty much played out by now. What makes you say that? If assets start deflating in China, there'll be another leg, no? Link to comment Share on other sites More sharing options...
Liberty Posted June 16, 2015 Share Posted June 16, 2015 http://brooklyninvestor.blogspot.ca/2015/06/in-search-of-stock-market-bubble.html Pointless to look at P/E ratios, there is no correlation between P/E ratio and next year or next 3-5 year returns. Shiller P/E has a small correlation. The risk is in earnings going down/margins contracting, not necessarily in P/E ratios contracting. Depends what you're doing. He's not trying to predict all things that can go wrong (such as margins contracting) or forecasting returns, he's taking a back of the envelope look at current valuation, and P/E is a measure of valuation (as flawed as it can be). Link to comment Share on other sites More sharing options...
Jurgis Posted June 16, 2015 Share Posted June 16, 2015 China-deflation has pretty much played out by now. What makes you say that? If assets start deflating in China, there'll be another leg, no? Even if assets deflate in China, I don't expect Chinese salaries to deflate with the assets. So, no, there won't be another leg of goods-around-the-world-deflating-because-of-cheap-Chinese-labor. Perhaps, I was too succinct when I said "China-deflation". Please substitute with "goods-around-the-world-deflating-because-of-cheap-Chinese-labor" Link to comment Share on other sites More sharing options...
petec Posted June 17, 2015 Share Posted June 17, 2015 China-deflation has pretty much played out by now. What makes you say that? If assets start deflating in China, there'll be another leg, no? Even if assets deflate in China, I don't expect Chinese salaries to deflate with the assets. So, no, there won't be another leg of goods-around-the-world-deflating-because-of-cheap-Chinese-labor. Perhaps, I was too succinct when I said "China-deflation". Please substitute with "goods-around-the-world-deflating-because-of-cheap-Chinese-labor" Yes, I see the distinction. Thanks. Although I wonder; asset deflation would put lot of pressure on asset-owning, debt-owing businesses. I think real-terms wages might well fall if asset deflation set in. Link to comment Share on other sites More sharing options...
KinAlberta Posted June 18, 2015 Share Posted June 18, 2015 http://brooklyninvestor.blogspot.ca/2015/06/in-search-of-stock-market-bubble.html The question is: Does the market have to reach bubble proportions before it tanks? The tone today seems to be a relatively new way of thinking about market levels and threats of downturns that I don't recall encountering in the late 70s, or the 80s and 90s. Link to comment Share on other sites More sharing options...
Liberty Posted June 18, 2015 Share Posted June 18, 2015 http://brooklyninvestor.blogspot.ca/2015/06/in-search-of-stock-market-bubble.html The question is: Does the market have to reach bubble proportions before it tanks? The tone today seems to be a relatively new way of thinking about market levels and threats of downturns that I don't recall encountering in the late 70s, or the 80s and 90s. I don't think it does, and I don't think that's what the author is saying. I think he's merely responding to the general calls of bubbles that we've been seeing from some people for years. If people talk of bubbles, it's not weird to look around for them and see what we find, no? Link to comment Share on other sites More sharing options...
Liberty Posted June 18, 2015 Share Posted June 18, 2015 http://www.valueplays.net/2015/06/17/ignore-the-buffett-indicator/ Some interesting points, which had also been made before by the Philosophical Economics blog. Link to comment Share on other sites More sharing options...
Liberty Posted July 18, 2015 Share Posted July 18, 2015 I like the anecdote about the first Gulf war: http://brooklyninvestor.blogspot.ca/2015/07/china-crash-us-crash-and-great-book.html Link to comment Share on other sites More sharing options...
giofranchi Posted July 20, 2015 Author Share Posted July 20, 2015 At best,the European Empire has stalled. At worst, it will start to shrink in a way that will jeopardize Ricardian growth across the continent. All else being equal, this will mean slower growth in the use of the euro, which now has surely become a structurally weak currency (see the chart below). In the long run, people do not like to save in the structurally weak currency of a shrinking empire, a reality which means that European bonds are likely to underperform those of other, non-shrinking, empires—the US and China—for the foreseeable future. --Louis Gave GioThe-End-Of-An-Empire-July172015.pd.pdf Link to comment Share on other sites More sharing options...
giofranchi Posted July 20, 2015 Author Share Posted July 20, 2015 Q2 2015 Hoisington Review and Outlook Bond Market Bubble: a must read! Cheers, GioHIM2015Q2np.pdf Link to comment Share on other sites More sharing options...
ni-co Posted July 22, 2015 Share Posted July 22, 2015 Icahn: When [high yield] gets killed and there is a run, there is nobody to buy that stuff. There is nobody to buy that trillion bucks. I don't know what ramification that can have, but it sure killed the market in '08 when the housing blew up. http://www.valuewalk.com/2015/07/icahn-blackrock/ Surely, most of you have seen Icahn's rant by now. I think he is right and find it very interesting to think about the implications. It's not only corporate high yield but also sovereign EM debt that could cause a financial crisis. The problem, as always, is liquidity. Bond ETFs are supposed to be liquid, much more so than the underlying securities. When everybody wants to sell at once it's like a huge hall full of people squeezing through one small exit in the event of a fire. Link to comment Share on other sites More sharing options...
indythinker85 Posted July 23, 2015 Share Posted July 23, 2015 Dalio worried about China http://www.valuewalk.com/2015/07/bridgewater-china-crash/ http://www.wsj.com/articles/giant-hedge-fund-bridgewater-flips-view-on-china-no-safe-places-to-invest-1437613434 Link to comment Share on other sites More sharing options...
ni-co Posted July 25, 2015 Share Posted July 25, 2015 Dalio worried about China http://www.valuewalk.com/2015/07/bridgewater-china-crash/ http://www.wsj.com/articles/giant-hedge-fund-bridgewater-flips-view-on-china-no-safe-places-to-invest-1437613434 Here is the full download: http://ftalphaville.ft.com/files/2015/07/Bridgewater-Greater-Risks-in-China.pdf Link to comment Share on other sites More sharing options...
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