Salient to Investors:
Bill Gross at Janus Capital said:
- The global economy is dangerously close to deflationary growth. Any whiff of deflation and things tend to reverse and go badly.
- The CRB Commodity Index is lower than in 2008 when Lehman went bankrupt. Oil, metals and crops have plunged due to the decelerating Chinese economy and gluts in multiple markets.
- Commodity markets give a truer picture of the economy because they are subject to real-time supply and demand.
- The Fed will raise by 25 basis points in September as it is mentally committed to moving before year-end, and despite the BoE voting 8-1 to keep its key rate at a record low until next year. A Fed 50 basis point increase would scare the market.
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