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Occasionally an analysis brings you up short and makes you rethink what you thought was obvious. Such is the case in the light of Koo's (Nomura)
Published March 2010 Bridport bond outlook
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This week we raise ten questions yet without clear answers. Together they are disturbing. Readers might think of their own answers, but “status quo” is unlikely to be amongst them.
Published March 2010 Bridport bond outlook
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A period of calm let us reconsider the impact of the end and eventual reversal of quantitative easing. Long-term rates must rise, but what of inflation?
Published March 2010 Bridport bond outlook
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Illiquidity has returned to bond markets. Confidence everywhere is falling. Profligacy has moved from the private to the public sector. Where can it lead?
Published February 2010 Bridport bond outlook
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The bond market went quiet last week because of lost working days. The issue of liquidity may be temporarily resolved, but next week will determine if normality has returned.
Published February 2010 Bridport bond outlook
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If it is not the worsening economy in the USA, it is the Greeks creating mayhem in the Euro zone. Rescue will come, but time to batten down hatches!
Published February 2010 Bridport bond outlook
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The Western government deficits are simply unsustainable. The bond markets may have been tolerant so far, but they will eventually perceive government debt as high risk and demand better returns.
Published February 2010 Bridport bond outlook
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It is a case of economists versus traders. Guess which are optimistic and which pessimistic. Which are right? Just as important, which view is gaining credence?
Published January 2010 Bridport bond outlook
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To help cope with contradictory data and opinion, it is helpful to distinguish the likely development of the swap yield curve from the government bond curve.
Published January 2010 Bridport bond outlook
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Growing disconnect between financial markets and the real Western economy makes us urge great caution, especially regarding the issuance of so many “junk bonds”. Diversifying currencies is to be recommended.
Published January 2010 Bridport bond outlook
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With so much positive sentiment reflecting the assumption of a “normal” recovery, there is reason for caution. Government borrowing needs will increase interest rates in the USA and UK.
Published January 2010 Bridport bond outlook
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Published December 2009 Bridport bond outlook
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Not since the Argonauts has the challenge of steering between two dangers been so great: for the Fed (inflation vs. recession) and, consequently, for all investors (safety vs. risk).
Published December 2009 Bridport bond outlook
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What a paradox: Bernanke’s exit strategy with its “reverse repo” plan, now under test, seems deliberately designed to discourage bank lending and prolong the period of mediocre growth.
Published December 2009 Bridport bond outlook
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A Chinese-made spanner has been thrown into the rebalancing works with their RMB pegged to the USD. The existing economic situation is untenable, but how will it end?
Published November 2009 Bridport bond outlook
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Cheap money always looks for a home, even a risky one, and that builds bubbles. But where? Can emerging markets without currency manipulation avoid them?
Published November 2009 Bridport bond outlook
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Maybe the end quantitative easing will not lead to inflation, but it will add to the pressure to steepen yield curves as government borrowing moves to financial markets.
Published November 2009 Bridport bond outlook
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Two problems are looming: the end of quantitative easing in the short term and reduction of debt to GDP at government level in the long term. Both look inflationary.
Published November 2009 Bridport bond outlook
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New issues of both the US Treasury and the private sector are moving to longer maturities. They will collide once quantitative easing is stopped, and steepen the yield curve.
Published October 2009 Bridport bond outlook
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Current improvement in corporate earnings and stock and credit markets depend on cheap money, lower wages and higher productivity. Can that last? Is it a way out from the impasse?
Published October 2009 Bridport bond outlook
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Some investors see credit and inflation risk so high that capital protection is their main preoccupation; others see the rewards of low-credit bonds continuing for some months. Who is right?
Published October 2009 Bridport bond outlook
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In revamping the current failed regulatory system in the USA, an HBS professor proposes moving from shareholder to stakeholder capitalism, replacing opportunism for an elite.
Published October 2009 Bridport bond outlook
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There is a way of making good returns in fixed-income – bidding for new corporate issues, but its sustainability is uncertain, to the point where it looks like a mini-bubble.
Published September 2009 Bridport bond outlook
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Can the increase in US wholesale prices mean that the switch from deflation to inflation is nearer than we thought? Profits taking may be the best option for bond investors.
Published September 2009 Bridport bond outlook
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It is still no easier to invest, but the arrival of RMB bonds has implications for the structure of currency reserves. Even UNCTAD says one reserve currency is not enough.
Published September 2009 Bridport bond outlook
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This is not an easy time for investors to find acceptable returns. Maybe this is one of those rare times when cash is the best means of protecting capital.
Published September 2009 Bridport bond outlook
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Published August 2009 Bridport bond outlook
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With a US economy “pumped up” with an unsustainable stimulus package, what happens when the stimulus is withdrawn? See our alternatives and be grateful for China’s growing domestic consumption.
Published August 2009 Bridport bond outlook
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For a few months we were more optimistic than financial markets. Now, however, we have take a tack different from theirs and introduce a large dose of scepticism.
Published August 2009 Bridport bond outlook
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Much cash chasing financial assets may have led to disconnect between positive financial markets and a negative underlying economy. And is China’s recovery sustainable (infrastructure building versus consumer demand)?
Published July 2009 Bridport bond outlook