The last seven weeks has brought out the bond bears in the forms of Bill Gross, Jeff Gundlach and also well-known stock picker and financial wizard, Warren Buffett. While Gundlach and Gross were very bearish on the European sovereign debt markets, the Omaha denizen opined on how stocks may be rich but bonds offer a terrible risk/reward return. Large bond investors are nervous that they have possibly bought an overvalued asset and may experience sizable losses on a quarter-to-quarter to basis. The problem for pensions, insurance companies and those saddled with a defined payout obligation, the FED and other central banks have broken the bond market as a value barometer so it is very difficult to match assets with potential liabilities.
Posts Tagged ‘Warren Buffett’
Notes From Underground: If Gross, Gundlach and Even Buffet Are Correct, Then THE FED IS WRONG
May 5, 2015Notes From Underground: Kelly’s Heroes or Bob Marley Redemption Song
May 30, 2012FINALLY. It seems that the world is waking up to the idea of putting to use the barbarous relic so despised by the financial gurus like Charlie Munger and Warren Buffett. A May 25 BLOOMBERG article by Brian Parkin and Jeffrey Donovan hinted at some type of debt-sharing plan: Not a Eurobond in a traditional sense but more of a collateralized debt obligation and a concept of a REDEMPTION FUND. The fund would take all sovereign debt more than the 60% of GDP level and deposit the excess paper in a central fund. The fund would be collateralized by the GOLD RESERVES of all the European nations–an amount more than 10,000 TONS OF GOLD. As the debt levels of the abusive nations recede–and taking back the maligned paper–the TROUBLED NATIONS COULD DRAW DOWN THE COLLATERAL.
Notes From Underground: A Response To The Berkshire Boys (Putting Contemporary Civilization Into The Barbarous Relic)
May 7, 2012Quick Hitter: The financial markets steadied themselves today after the initial “shock” of yesterday’s European elections. The EUROPEAN DEBT MARKETS showed resolve as both the BTPs and OAT futures performed better than the BUNDS and the EURO rallied back to almost unchanged as the market awaits the discussions between Merkel and Hollande, as well as further word about attempts to create a working government in Greece. At the end of the day, a crisis was averted but as all our readers know Spain, Portugal, Ireland and Italy are all still on the boil. So, while the heat was turned down NOTHING HAS REALLY CHANGED … so it goes.
Notes From Underground: Europe is Scaring The Financial Markets and the World (Obama)
September 27, 2011In a speech today, President Obama proclaimed that European inaction on its debt crisis was scaring the world, implying that the EUROCRATS were causing global growth to slow by raising fears of the a major credit debacle. It seems that the G-20 was entirely dedicated to bashing the European financial policymakers about the foot-dragging and infighting that is delaying action on the dual problems of sovereign debt and the newly discovered bank solvency issues. Rumors arose Sunday night that a package had been crafted to leverage the EFSF to almost 2 trillion euro from 440 billion euro. However, failure to verify the rumors left the markets moving up and down as confirmation was not forthcoming from European authorities.
Notes From Underground: FOMC MINUTES … Is This a Balance Sheet Recession?
August 30, 2011The August 9 FOMC minutes from were released today and there was a great deal of discussion about the issue of leaving rates at the present level for the next two years. It seems that one of the dissenters opposed the measure for he didn’t want the FED to be locked in to a decision and thought the measure should be subject to newly released data. There was much discussion about European banks and the efforts by the ECB to calm the storm and prevent a bank run. The FED did acknowledge that the biggest drag on U.S. growth was the “efforts to rebuild balance sheets and caution on the part of households facing an uncertain economic environment.”