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Little to dispute on EPS recession, liquidity tighter than ever, CBs wallowing in
the dark, equities could still be expensive and at minimum are correcting
Markets will not be freed from macro fears and realities anytime soon but we will
largely sideways in a range that could be 1680-2250 on the tails but most likely
1810-2030; these wide ranges are appropriate based on the tail risks, extreme
positioning and liquidity sucked out of the mkt
Total earnings yield of equities have a floor in an environment where bonds earn
nothing and many companies have pristine balance sheets. Many sectors have
already priced in recession
China and EM have credit issues but they may not be as bad as you think
Credit will get worse and you can position for that but we are not going into
2008 again and worse doesnt mean it bleeds across the entire credit curve; I
argue for more bi-furcation
Consumer is structurally weaker than they have ever been based on nature of
labor market, negative real rates, financial oppression get used to it. Labor
market has not rolled overyet?
Euro
Mexican Peso
Didnt China basically stop the global devals in their tracks back in August
with their threat to devalue??? Maybe this alone was enough to stop the
flight the Dollar China stole the game from the Fed/ECB/BOJ
EM debt is why EM Equities have sold off so hard:Help from the sovereign
may bolster a company's ability to pay back debt, but raises the cost of equity
for other sectors.
RoE fallen more in EM than in DM, but this has happened despite EM
companies levering up
Your Questions
Is the basic idea of low rates in bonds (rising TLT) simply that people are selling stocks and shifting
into bonds? Is it that simple or is there more to the purported "wisdom" of the bond market than that?
- Greg
To me, the reason underlying the market malaise is DEFLATION.All the negatives seem to stem
from prices on virtually everything going down. Is this also why the German banks are under such
intense pressure? - Robert
Record global $ debt + 70% reduction in petro $ creation = increasingly strong $, right? - Paul
BK: Asset managers' largest clients are pension funds. Does the risk of asset managers spread to
pension funds, public and private, causing the Gov't to step in, albeit in a different way than in
2008-09? - Robert
With US Global companies such as $AAPL keeping cash off shore for tax reasons. Does the China
devaluation impact these companies cash directly? Or just indirectly in lower revenue? - Don
I would love to hear thoughts on why USD/JPY FX rate seems to influence global markets more so
than GBP, EUR, or even Yuan - Mark
Tim: Which EM market would you dip your toe in and at what price or market event? - Rich
b) Tim what are your targets for EEM - Kim