Yesterday, I began my Ten Surprises List. As a reminder, the surprise list is loosely based off Byron Wien’s list of ten surprises which he has conducting doing at Blackstone and Morgan Stanley for the last thirty years. Wien defines his surprises as events to which investors assign 1-in-3 odds of happening but which he believes have a more than 50 percent likelihood of occurring in 2012. If the list is mediocre, I should get 3 or 4 out of ten. If I guess right at 50% odds, I should get 5 of ten. Anything above 5 means I had a good year.Read more ›
Post Tagged with: "government bonds"
Brazil goes into a recession.
Spanish GDP growth rebounds and outstrips German GDP growth.
Gold rebounds to beyond $1600 an ounce.
US GDP growth in Q2 and Q3 is below 2%.
10-year US Treasury yields fall below 2.25%.
Abenomics ‘fails’ as Japanese GDP growth slips below 0.5%.
By Marc Chandler The Italian 10-year premium over Germany (white line) has generally fallen over the past year as the dollar against the euro (yellow line). Of course, as one would expect the euro is more volatile than the 10-year interest rate spread. Sometimes there is a better fit than at other times. And the dollar has recovered a bit […]Read more ›
By Marc Chandler The US debt ceiling looms. The House Republicans are still formulating their strategy. Treasury Secretary Lew has said his ability to maneuver will be exhausted by February 27. While this sounds like ample time to avoid a delayed payment or default, the problem is that Congress is recesses this Wednesday and will not return for a full […]Read more ›
While the emerging markets are getting a bit of a reprieve today, it bears noting that the move to so-called safe haven assets and currencies has begun. This suggests to me that George Magnus’ warning about this emerging markets crisis must be heeded. I believe a key component to the selloff’s ending will be better economic data out of China as the interest rate hikes taken in several EM countries have not had a beneficial effect. Bonds will continue to rally until the EM crisis has been decisively dealt with. More thoughts below.Read more ›
Right now, everyone is talking about an emerging markets crisis due to the simultaneous turmoil in several emerging markets. I am not concerned about this being a full-blown crisis yet. At the same time, I do want to use this as a launchpad for a discussion about high yield and high risk investments, whether they be leveraged loans and junk bonds in the US, sovereign debt in Greece or investments in emerging markets. Some of these are investments doing well, others are not. And this points to the ‘crisis’ as not being merely about risk-off.Read more ›
By Marc Chandler Political developments in Italy are happening faster than Prime Minister Letta can maneuver. The economy he is overseeing is the poster child of ECB President Draghi’s assessment of a weak, fragile and uneven recovery in the euro area. While Spain’s Target2 imbalances are gradually declining, Italy’s are edging higher. The economy is lagging behind Spain in the […]Read more ›
By Marc Chandler We argue that part of the euro’s rise over the past several months reflects a reassessment of Spain’s outlook. Many global investors had been under-weight Europe though most of H1 13, favoring the US and Japanese equities. However, as the PMIs began indicating an economic recovery, foreign investors moved back into Europe. Some hedge funds made a […]Read more ›
When the Eurozone moved toward the backloaded austerity paradigm, last Spring, I started to change my tune on Europe. In June, I wrote that we should watch second derivatives in the Eurozone, because the change in change numbers are a harbinger of a phase shift between recession and recovery. As with the US recovery in 2009, I have been cautious about calling this a recovery because we are still at stall speed. However, recent upbeat eurozone data signal the recovery in Europe is for real.Read more ›
I have some interesting ideas on the eurozone regarding France, a housing decline and its divergence from the rest of Europe. But I am going to save that for a later post. Suffice it to say the German – French spread is widening; it is at 61 basis points for 10-year securities. And France was the only nation except Greece that saw a manufacturing PMI below 50 in the last month’s data for the eurozone. The Netherlands, which I contrasted to France last month, had the highest numbers. What is this telling us?Read more ›
In 2012, I started the subscriber newsletter out with Ten Surprises for 2012. The goal was to give Credit Writedowns Pro subscribers a list of things that investors only assigned one in three odds of occurring that I believed had a fifty percent or better chance of occurring. So if I was right, then I should get 5 out of ten predictions correct, while 3 to 4 out of ten should have been expected by investors. Last year, I graded myself at 7-3. Let’s see how I did this year.Read more ›