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The Central Bank Bubble: How Will It Burst?

Unread postPosted: Mon 06 Nov 2017, 22:44:38
by AdamB

Alberto Gallo of Algebris Investments steps up to take his shot at the $64,000 (more like trillion) question in a report published this week “The Central Bank Bubble: How Will It Burst?” Gallo manages the Algebris Macro Credit Fund described as “an unconstrained strategy investing across global bond and credit markets, and with lead responsibility for Macro Strategies” on the company’s website. Gallo sets the scene as follows. Most investors are still playing the game, and in the same direction. We estimate there are currently around $11tn in negative-yielding bonds and over $2tn in strategies that explicitly or implicitly depend on stable volatility and asset correlations. If low interest rates and QE have been the lever pushing up prices of dividend and coupon-paying assets, central banks are the fulcrum. This fulcrum is slowly shifting: the ECB has just announced a reduction in its bond


The Central Bank Bubble: How Will It Burst?

Re: Central Banks

Unread postPosted: Mon 13 Nov 2017, 06:52:04
by Subjectivist
The Central Banks look out for the Central Bankers. IF the rest of us benefit they don’t mind, but if we get squashed they don’t care about that either.

The Biggest Bubble Ever, In Three Charts

Unread postPosted: Mon 11 Dec 2017, 19:56:16
by AdamB


Each quarter, Credit Bubble Bulletin’s Doug Noland posts a “flow of funds” report that analyzes the debt and securities markets data released by the Fed in its Z.1 Report. It’s always shocking to see the numbers we’re dealing with, but even more so lately as history’s biggest financial bubble starts to dwarf its predecessors. Here’s some of the scarier data in chart form, with Noland’s commentary: To the naked eye, percentage debt growth figures for the most part don’t appear alarming. But there’s several unusual factors to keep in mind. First, the outstanding stock of debt has grown so enormous that huge Credit expansions (such as Q3’s) don’t register as large percentage gains. Second, overall system debt growth continues to be restrained by historically low interest-rates and market yields. Debt simply is not being compounded as it would in a normal rate


The Biggest Bubble Ever, In Three Charts