We’re not huge fans of “risk on” / “risk off” explanations of global market movements around here. Not only is it simplistic to reduce all the factors that play into the rise and fall of asset classes to a simple binary proposition, but it looks like even its limited viability is evaporating fast.
While the effects of the great recession are a long way from over, an even greater asset bubble could be forming that would make the housing bubble look like a four year old’s attempt to blow bubble gum.
In a recent Wall Street Journal article, “Fewer Ports in a Global Storm,” it was reported that Credit Suisse calculated that assets deemed “safe” or risk-free by investors had plunged in value from $22 trillion to $12 trillion over the last four years.
The White House has released a new $3.8 trillion budget for 2013. The United States currently owes a staggering $15.3 trillion. If the president says it is not time for austerity, how do we know?
Treasury yields have run in a big circle so far this year and, until Friday’s stunning U.S.labor numbers, these bonds were still finding plenty of risk-averse buyers. Is this a sign of a fool’s rally or simply a symptom of markets in transition?
Japan has been making massive purchases of U.S. treasuries, and it now holds almost as much American debt as China does. As reported recently in the Wall Street Journal, Japan now owns $1.039 trillion in US Federal debt. China has been selling Treasuries, but still holds $1.113 trillion worth.
If leading Republic contender Mitt Romney wraps up the nomination in January, there will be a clash coming soon between “his consultant’s skills to bear on the federal budget,” as Bloomberg Businessweek terms it, and the record budget deficits of Barrack Obama.
Terrible performance in China A shares and the Shanghai Composite last night took us all back to March 2009 levels — the bottom of the post-credit-crunch era. Will Santa come for China, emerging markets and the world this year?
The Congressional “Super” Committee actually agrees that their efforts to fix the federal balance sheet have failed. The only real question is why it took them so long to come to that conclusion — and how hard they were trying to work together in the meantime.
Where are all those people who were saying China was ready to dump Treasury debt after the downgrade? Can we get them back to discuss their reasoning?