Post Tagged with: "deflation"
Rosenberg on the cause of the next secular uptrend in inflation or hyperinflationary shock
David Rosenberg is bullish on bonds. And the reasoning for his bullishness has a lot to do with the deleveraging and excess capacity which the bursting of the credit bubble has brought into view. In this sense, his views on inflation are actually rather similar to modern monetary theory advocates. In his daily letter to
DEFLATION!
Wow! We see the word "Deflation" everywhere; we see it in every financial publication and hear it every time we turn on financial TV. We see that the pundits who were bearish because of runaway inflation have just recently included deflation as well as inflation to be the problem. We were talking and warning about
Grantham: Deflation has won on points
Well, I, for one, am more or less willing to throw in the towel on behalf of Inflation. For the near future at least, his adversary in the blue trunks, Deflation, has won on points. Even if we get intermittently rising commodity prices, which seems quite likely, the downward pressure on prices from weak wages
It’s time to pay for lunch
Lately there has been much ink spilled (or at least the electronic equivalent) about the meaning in the downward shift of the yield curve, the significance of a two-year Treasury that sports a 5/8% yield, and a 10-year that trades in a new sub-3% range. Our admittedly unscientific impression is that the analysis initially centered
US Data Disappoints–Adds to Dollar Selling Pressure
US data have been disappointing. The weekly initial jobless claim increase has been followed by a weaker than expected ISM manufacturing report. The ISM fell to 56.2 from 59.7. The consensus had anticipated a smaller decline to 59. Weakness was especially pronounced in new orders, which fell to 58.5 from 65.7 Employment eased to 57.8
Rosenberg: Sub-2% long term bond yields
The U.S. long bond yield is edging lower with each and every passing day, and now stands below 3.90%. At the same time, we cannot help but notice the huge gap that still exists between 10s and 30s — nearly 100 basis points. There is tremendous potential for a narrowing in this spread, as there
Other Alpha Sources
A post on the latest economics debates by Claus Vistesen Steve Waldman has a very good post this week about the folly about the austerity vs non-austerity discussion which seems to be going the rounds at the moment. In fact, it you take a mental picture of the current financial market discourse most arguments can
Irish GDP Turns Positive, Sort Of
Ireland, the first euro zone country to fall into a recession in 2008, reported today that Q1 GDP expanded by 2.7% from Q4 09. While the headline is impressive, even if Q4 09 was revised to show a 2.7% contraction rather than -2.3% as initially reported. The year-over year rate improved to -0.7% from a
Chart of the Day: Treasury Yields in Freefall
Below is a chart of the ten-year Treasury yield over the last three months. After peaking near 4% in April, it has since dropped to below 3% and currently yields for 2.97%. This is as abrupt a move as you are likely to see in long-term interest rates. On the one hand, this is certainly
More on Competitive Currency Devaluations
There is nothing preventing the Federal Reserve from buying up any financial asset it so chooses with money it creates out of thin air. In fact, I seriously doubt that the vaunted bond market vigilantes would be able to cause US interest rates to go up if the Federal Reserve decided to target long-dated Treasuries
Rosenberg: The Case For Bonds
This is just in from David Rosenberg: In the discussion about the outlook for U.S. Treasury bonds, the point must be emphasized that supply alone has been an inadequate focus for predicting future price/yield. You don’t have to do much more than to go back to examples like these: the 30-year Treasury bond yield went
More Thoughts on Switzerland and Why the Euro is Not Lower
Investors are still trying to get their heads around the SNB’s preliminary indication that is reserves rose to CHF232 bln in May from CHF153 bln in April. This represents more than a 50% increase in reserves in a single month. It would be tempting to attribute this to valuation changes. As we have noted when