Salient to Investors: Kit Juckes at Societe Generale says each of the last three significant financial bubbles in the past 30 years have been fueled by the Fed keeping interest rates below the economy nominal GDP growth the fed funds rate. Juckes says in the past when year-over-year Nominal GDP
READ MORE... →Salient to Investors: Makoto Suzuki at Okasan Securities said Treasury yields have risen too much, and the stock market appears to be too optimistic about the US economic outlook. The median estimate of the Thomson Reuters/University of Michigan index of consumer sentiment is 83 for June versus the 6-year high of 84.5
READ MORE... →Salient to Investors: A. Gary Shilling at A. Gary Shilling & Co. writes: Short stocks and commodities, go long the dollar and Treasuries – if stocks continue to decline, the safety of Treasuries and investment-grade bonds will outweigh concerns about the end of QE. World economies are growing slowly at
READ MORE... →Salient to Investors: Borrowing costs for Chinese banks have surged the most in at least 6 years. Three of the largest rating agencies warn that banks may run out of cash to pay investors in their wealth management products and to extend new loans, increasing the risk their customers will
READ MORE... →Salient to Investors: Henry Paulson at the Paulson Institute said: Phasing out QE will cause market volatility and pain because there is never a neat, elegant solution that is totally painless or without a cost to a big, ugly problem – some market participants are addicted to these abnormally low interest rates. The US
READ MORE... →Salient to Investors: Frederic Neumann at HSBC said: Asia’s growth has just downshifted to a less spectacular pace in coming years. Asia’s 1997 financial crisis won’t repeat as dissimilarities outweigh the parallels. Current account positions are mostly in surplus, which should cushion the blow from an outflow of capital, and banking systems
READ MORE... →Salient to Investors: Bond managers are telling investors the worst may be over for T-bonds after 10-year yields rose to a 22-month high. Jeffrey Gundlach at DoubleLine Capital says July will not be the same type of month and 10-yr yields will be meaningfully lower by the end of 2013 Gundlach said
READ MORE... →Salient to Investors: Boston Consulting says Mexico is beginning to beat China as a manufacturing base despite its higher crime rate: a plus for the US because Mexican factories use 4 times as many American-made components as Chinese factories do. Mexico’s 4 key advantages: Manufacturing wages, adjusted for Mexico’s superior worker
READ MORE... →Salient to Investors: Freddie Mac said the average rate for a 30-yr fixed mortgage rose to 4.46 percent from 3.93 percent, the biggest one-week increase since 1987. The average 15-yr rate climbed to 3.5 percent from 3.04 percent. The average rate for a 30-yr mortgage in the 10 years through last
READ MORE... →Salient to Investors: The UK said fields of shale gas in northern England are twice as large as previously estimated. A recovery rate of 10 percent, similar to fields in the US, would give the U.K. enough gas to meet demand for about 47 years. Lawrence Carter at Greenpeace said
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