The chart below is amazing. It originates from Bank of America’s Merrill Lynch and shows the yield of European stocks currently exceeding the yield of European junk bonds. So why do I think this state of affairs is “amazing?” First there is one’s reaction or ...
read more...
In my post from last week about central banks I argued that they are devaluing their currencies in a zero-sum game for stimulating their domestic economies at the expense of their trade partners. A recent piece by Jonathan Laing in Barron’s echoes some of the same points. Laing cites ...
read more...
One of the first things that you learn about economic growth, if you learn anything at all, is that growth is not a zero-sum game. That is, when a company like Apple increases its earnings by 40% or so, as it did last quarter, it didn’t simply “take” those earnings from its ...
read more...
In April I commented about how central bank policy causes investors to mis-price risk. The Wall Street Journal notes that 5-year yields on Spanish sovereign debt have fallen from above 7% in 2012 to below those of U.S. Treasurys and Irish 10-year bond yields are below U.K. bonds of the same ...
read more...
