Salient to Investors: Nouriel Roubini writes: QE is not creating credit for the real economy, but instead boosting leverage and risk-taking in financial markets. Issuance of risky junk bonds under loose covenants and with excessively low interest rates is increasing, the stock market is reaching new highs, despite the growth slowdown,
READ MORE... →Salient to Investors: Jim O’Neill said: The US is returning to normality so expect 10-yr T-yields to rise toward 4 percent in the next couple of years as the 30-year bull market in bonds comes to an end. There will be quite ugly days. The global economy is in the early stages of
READ MORE... →Salient to Investors: Jim O’Neill writes: When the Fed starts to taper, expect turbulence in financial markets, especially for overpriced assets. We are headed to a normal 10-yr T-yield of 4 percent or more versus 2.2 percent now, and to a return of the equity culture. mcd-grp.com/cat/ In 1994, Greenspan made it clear that
READ MORE... →Salient to Investors: The economic expansion shows signs of lasting almost twice as long as average, with few of the excesses that often presage the start of contractions – inflation is slowing, not quickening, household debt is shrinking, not expanding, and the labor market is slack, not tight. Robert Gordon
READ MORE... →Salient to Investors: Shares of discount brokers are gaining the most since 2003 relative to the S&P 500, a sign that small investors are joining the 4-year bull market. Discount broker stocks beat the market by at least this much in 1997, 1999, 2003 and 2009, years in which the S&P 500
READ MORE... →Salient to Investors: David Stockman says: We are in serial bubbles. Greenspan and Bernanke have inflated bubbles for years by keeping interest rates low. A system of bubble finance is geared towards massive borrowing and speculation on leverage, everyone will do it – a gambler’s dream. Financial markets are full
READ MORE... →Salient to Investors: Nouriel Roubini at NYU says gold may fall toward $1,000 by 2015 as the economic recovery curbs demand for bullion, there is a lack of inflation, and other assets such as equities offer better returns. Roubini said investors should have a very modest share of gold and other real
READ MORE... →Salient to Investors: John Lynch at Wells Fargo Private Bank said ISM was decidedly negative, and bad news can only be good news for so long for stock prices – at some point it will impact earnings and market levels. Sam Stovall at S&P said the rally and strong start to
READ MORE... →Salient to Investors: OECD predicts faster global economic growth, led by the US and Japan: growth in member countries will accelerate to 2.3 percent in 2014 from 1.2 percent in 2013, China, will grow 8.4 percent in 2014 after growth of 7.8 percent in 2013. Neil Mackinnon at VTB Capital
READ MORE... →Salient to Investors: Marc Faber at the Gloom Boom & Doom Report says: High-end assets from stocks to art to real estate are in a bubble caused by central bank money-printing. This money doesn’t increase economic activity and asset prices in concert, instead creates dangerous excesses in countries and asset
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