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: Property purchases by U.S. REITs are likely to be curtailed as a tumble in share prices makes a key source of capital costlier. Jim Sullivan at Green Street Advisors said for most property types, we have hit the pause button and expect REIT executives to be very careful with respect
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: 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: Social-investment networks, which started appearing in the middle of the last decade, are attracting record interest, turning top performers into market stars for individual investors. The top traders – gurus – may have as many as 100,000 followers and 10,000 copiers, raising concerns among professional investors. Justin
READ MORE... →Salient to Investors: Corporate creditworthiness in the US is deteriorating at the fastest pace since 2009 with earnings growth slowing as yields rise from record lows. Moody’s said the ratio of upgrades to downgrades fell to 0.89 times in the first 5 months of the year after reaching a post-crisis
READ MORE... →Salient to Investors: Caroline Baum writes: The Wall Street Journal’s Jon Hilsenrath is widely viewed as Bernanke’s unofficial spokesman. Bernanke was crystal clear when he communicated the Fed’s objectives. The rise in interest rates can be easily overwhelmed by better earnings as a result of stronger growth, so if the Fed’s optimistic
READ MORE... →Salient to Investors: Nassim Nicholas Taleb says: The UK and the US have a fantastic history in risk-taking, in trial and error, without shame in failing and starting again. We must honor the “ruined” risk-takers with as much respect as we do soldiers – there is no such thing as
READ MORE... →Salient to Investors: Jim Rogers writes: China has a major water problem and the only way the China story runs into big problems is if they run out of water. They will solve it so buy companies that are working to fix that problem. The Chinese stock market is getting
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