http://www.zerohedge.com/news/2016-02-26/das-why-you-can-expect-another-global-stock-market-meltdown
The thinking. In ZIRP any income stream is good at any price because negative i has yet to be taught in corporate finance 101
Why give the Germans 100 buck for 99.5 in return ? Bcause soon the return will be 99.0 or lower and capital gains will accrue to investments at the 0 line
So : buy any bonds or instruments with + yields in the expectation that all rates go below 0 !
To wit the raw data
The mispricing of assets across world markets has reached epidemic proportions.
The thinking. In ZIRP any income stream is good at any price because negative i has yet to be taught in corporate finance 101
Why give the Germans 100 buck for 99.5 in return ? Bcause soon the return will be 99.0 or lower and capital gains will accrue to investments at the 0 line
So : buy any bonds or instruments with + yields in the expectation that all rates go below 0 !
To wit the raw data
The mispricing of assets across world markets has reached epidemic proportions.
U.S. stock buybacks have reached 2007 levels and are running at around $500 billion annually. When dividends are included, companies are returning around $1 trillion annually to shareholders, close to 90% of earnings.
10% rise in the value of the dollar equates to a 4%-5% percent decline in earnings.
The S&P 500 now trades at around 17-18 times forward earnings, a level that is historically expensive and only exceeded during the 1999-2000 tech-stock bubble.
more than 80% of new initial public offerings were for companies with no earnings. A significant component of activity has been private equity investors taking advantage of high valuations to sell holdings.
More than $7 trillion of sovereign debt globally now trades at negative yields.
equity analysts argue that investment in shares was preferable to bonds as they offered better protection from a rise in risk-free rates.
moving into corporate bonds, driving rates lower, with the average falling under 2.9% in early 2015. investors have invested increasingly in higher yielding non-investment grade and emerging market debt, including by ever-more exotic issuers for Africa or Asia.
1% rate-rise will result in around a 7% loss in the value of U.S. corporate bonds,
Real estate prices have risen globally with investors purchasing rental income streams to diversify away from low income financial assets.
Collectibles are showing the effects of excessive enthusiasm.
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