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New York University professor Nouriel Roubini said two days ago that in the U.S., a failure to address the budget deficit risks a bond market “revolt.” President Barack Obama’s administration has been negotiating with Republicans, who control the House of Representatives, over cutting the federal government’s long-term shortfall and raising the debt ceiling. “We’re still running Continue reading Debt a Threat to Global Economy – Roubini Even if Fed Chairman Ben S. Bernanke decides to not implement QE3 to provide more quantitative easing, it’s now clear that rates everywhere will stay unusually low for longer than many investors expected. And with the most developed economies barely growing, Asia will be getting an even bigger share of the loose cash careening around the Continue reading Asian Perspectives on U.S. Quantitative Easing The focus of families, statehouses and the White House is “balance sheets”. Reducing liabilities is what everyone is doing. Mohamed A. El-Erian of PIMCO tells us it is a global phenomenon: Balance sheets, both across and within economies, are still out of equilibrium in what remains an excessively asset-based global economy. This raises the question Continue reading Balance Sheets are the Focus in Age of Deleveraging Quantitative easing in the form of QEII has very likely lowered long-term interest rates, at least somewhat, promoting some investment and economic growth. But absent further fiscal stimulus, it’s unlikely to be a cure-all for a slow growing economy with anemic demand. And it is possible, though unlikely, that the Fed could find itself in Continue reading Quantitative Easing – Interest, Inflation Rate Tradeoff Households continue to reduce debt. The major force behind the slow recovery isn’t going away soon: America is turning away from debt and embracing thrift, and the epicenter of change is the household. History suggests that the transition toward a high-saving, less-debt balance sheet will be long and painful before vibrant growth resumes. The Federal Reserve Continue reading Corporate and Household Debt Declining – Now it’s Government’s Turn What if lack of debt and property ownership information caused the financial crisis? It isn’t enough to have property rights – you need information to accompany those rights. Economist Hernando de Soto believes that the financial crisis wasn’t just about finance—it was about a destruction of knowledge of property ownership. Hernando de Soto: During the second Continue reading Debt and Property Ownership – Destruction of Information Caused Crisis “Investors are diversifying out of U.S. Treasuries and going into global markets,” according to Templeton Asset Management’s Mark Mobius. “That’s been a big change, which has been beneficial for emerging markets generally.” Global markets are gradually adjusting to the day when the dollar will not be the main currency, Mobius said. ”The global equities bull market will Continue reading Emerging Markets Continue to Grow – Mark Mobius You may think emerging markets are no longer cheap. Even so, there are good reasons to consider emerging markets for a portion of your investments. One reason to invest in emerging markets is to gain exposure to currencies that have a good chance of rising. It’s important to have emerging-market currency exposure, especially because the Continue reading Emerging Markets Still a Compelling Investment How to reduce expenses and debt – whether you are responsible for a country or you are the head of a household, you are looking for ways to cut back on spending and borrow less money. We’re all sharing a common experience affecting cash flow – The Great Debt Contraction. So how do you look Continue reading Expenses and Debt – Adjusting to the Great Debt Contraction Bill Gross runs Pacific Investment Management Company (PIMCO), a company synonymous with bond investments, especially U.S. Treasuries. Earlier this year PIMCO announced that their flagship fund, Total Return Fund, is no longer invested in U.S. Treasuries. Bill Gross is worried that, unless entitlements are substantially reformed, the U.S. will likely default on its debt; not in conventional Continue reading Follow the Money – Dump Treasury Bonds and Invest in Emerging Markets |
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