This is a fascinating clip about a concept I am a fan of – that of the emotions of investing, and how we make decisions – only did a post on it yesterday! The full video is available here if you want to check it out (c. 1hr long).
Bill Gross, talking about US jobless figures
Bill Gross talks about the US jobless figures for June, while there is the need to realise that bad news makes bond prices rise, Mr. Gross of PIMCO (the worlds largest bond fund) make some excellent points.
Anaemic wage growth, a savings rate jumping from 0% towards 8%, the people with jobs are not getting raises, he picture he paints is grim, he says there will be suppressed demand and spending for a generation. The contents of his takes on the market can be found on the Pimco website here.
Inflation… 'when' not 'if'…
The endurance of gold at above $900, rising oil prices, the weakening dollar and a Treasury/Fed combo that is increasing the money in circulation will lead us where?
I hate to harp on about inflation but it just doesn’t seem that further down the line we won’t see a lot of it, the market is pricing it in, the yield curve is suggesting it, and yet it remains on the periphery of commentary for the most part.
One important statement in this talk is the bit where one of the guys talks about the fractional reserve system and the multiplier effect that can turn 800+ billion into 8 trillion.
When we are advising longer term fixed rates to avoid the pain this will bring (and it won’t be in 09′, it will be 10′ or 11′ but rest assured it will come), bear in mind that in the short term you will pay more than you have to, but that when everybody else is hurting you will be insulated. The reason for fixing now rather than later is that the …
Inflation… ‘when’ not ‘if’…
The endurance of gold at above $900, rising oil prices, the weakening dollar and a Treasury/Fed combo that is increasing the money in circulation will lead us where?
I hate to harp on about inflation but it just doesn’t seem that further down the line we won’t see a lot of it, the market is pricing it in, the yield curve is suggesting it, and yet it remains on the periphery of commentary for the most part.
One important statement in this talk is the bit where one of the guys talks about the fractional reserve system and the multiplier effect that can turn 800+ billion into 8 trillion.
When we are advising longer term fixed rates to avoid the pain this will bring (and it won’t be in 09′, it will be 10′ or 11′ but rest assured it will come), bear in mind that in the short term you will pay more than you have to, but that when everybody else is hurting you will be insulated. The reason for fixing now rather than later is that the …
We need to clear our bonds, ensure there are retail offerings.
Ireland has been downgraded by Standard and Poors, we are on a ratings watch with Fitch and Moody’s as well. The last bond issued by the NTMA was not subscribed as widely by the international financial community as they were previously and the Irish stepped up and bought up 55% of the bond, we saved the day ourselves. Now we are at a crossroads, we need to raise money, it will be more expensive given our national outlook and at the same time investors are shying away from our sovereign debt, equally we can’t cut back spending enough to bridge the gap and impressing the international investor market with taxation will hurt our national economy.
There is enough money in this country to clear all of the bonds required, and it is held in ready cash format. …
When will the inflation arrive?
TIPS market (treasury inflation protected securities) are showing a deflated one year but an increase on the five and ten, many feel this is too low and we’ll likely see changes in the bond market soon after stimulus money starts to flow through. This is one trend to pay attention to.
Bill Gross of Pimco talks about the deficit in the USA
Bill Gross, known as ‘Mr. Bond’ runs the largest bond fund in the world, in this video he talks about many of the issues facing the economy under the new Obama presidency. Bill Gross is a fascinating character who started his careers as a professional gambler I always enjoy listening to his views on the market which he does with an intersting mix of macro/micro/common sense views.