04/12/17

Bubble Watch: The Everything Bubble is Riskier and Less Liquid Than Housing



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Bubble Watch: The Everything Bubble is Riskier and Less Liquid Than Housing
// Zero Hedge

As we keep emphasizing, the world is in an Everything Bubble.

In truth, it is a bubble in sovereign bonds, created by Central Banks attempting to corner these markets via ZIRP and QE.

However, because sovereign bonds are the bedrock for the current fiat financial system, if they go into a bubble, EVERYTHING goes into a bubble.

Why?

Because if you skew the "risk-free return" of the financial system (US sovereign bonds or Treasuries) ALL risk will adjust accordingly.

TEBsideways

Case in point, consider the latest report from The Economist about corporate debt.

As late as 2008, more than 80% of non-financial corporate bond issuance was rated A or above, according to Torsten Slok of Deutsche Bank; in the past five years, the proportion has been consistently under 60%.

            Source: The Economist.

In layman's terms, this report is ....

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