Friday, July 08, 2016

Technically Speaking: 
The Bond Ratio Warning
Lance Roberts sees central banks as creating a massive debt bubble by encouraging speculation in the riskiest of debt structures by institutions .. points out the ratio between stock prices & bond prices - "Not surprisingly there is a high level of correlation between this ratio and the rise and fall of stock prices. This is with the exception of just two periods: the run-up of asset prices during QE3 and leading up to and following the 'Brexit' vote .. Last week’s divergence of bonds and equities isn’t healthy. Bond markets are screaming that the world economy is slowing, and shareholders have their fingers in their ears singing ‘la-la-la I can’t hear you. .. Stocks are no longer about growth, but about a desperate search for safe alternatives to low-yielding bonds." .. This chase for yield is not something new but has been a growing bubble born of Central Bank interventions since the end of the financial crisis.
LINK HERE to the essay

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