Reads: Ned Davis On Stocks, Hugh Hendry's Credit Bet, David Rosenberg on Oil, Yields, Deflation

Belated linkfest for February 2011
    • On CNN, billionaire George Soros took shots at Obama's economic agenda and said municipalities could default. Also, when the Fed stops pushing money into the economy (QE2), interest rates will go up which will choke off the economic recovery;
    • Market Crash 2011: It will hit by Christmas by Paul Farrell at featuring Ned Davis and Jeremy Grantham;
    • Congressional Oversight Panel Hearing on Commercial Real Estate's Impact on Bank Stability (2/4/2011)Panel #1: Sandra Thompson (FDIC), Patrick Parkinson (Board of Governors of the Fed), David Wilson (Office of the Comptroller of the Currency). Panel #2: Matthew Anderson (Foresight Analytics/Trepp), Richard Parkus (Morgan Stanely Research) and Jamie Woodwell (Mortgage Bankers Association in CRE Research). Link:;
    • Hugh Hendry's recent report (Eclectica Management): Profiting From Contrarian Opinion: Just How Investment Grade Are Japan's Credits - Read at Business Insider;
    • David Rosenberg: Forget Oil And Inflation, The Real Story Is In The Bond Market (read the article at Business Insider). Read the "Breakfast With Dave" report at FMX Connect;
    • Jim Grant sees interest rate risk for municipal bonds (likes mortgage REITs, Annaly Capital) - BloombergTV (from early February).


    1. "Didn't Japan do the same? Doesn't the chart on short term rates and the BOJ balance sheet look like what the Fed just did? And of course on a post global credit collapse money velocity goes down, the money multiplier goes down, the cash sits on balance sheets".. "By 1998 they were at 10% of GDP, that's where we are at today. Since when did we have a bear market in JGBs they are at 1.3%. They even got downgraded in 1997, JGB yields still fell 70 basis points to the lows".

      "Only 6% of the largest balance sheet in the world, which is the household sector balance sheet, is in fixed income and on top of that you have another $8 trillion or so sitting in cash. If you're asking who is buying the bonds go to the Fed Flow of Funds, take a look at what's happening in the household balance sheet and you'll find that households are buying bonds".


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