David Rosenberg: 'Bonds Priced for World to Come to an End'
Tuesday, 10 Feb 2015 06:40 AM
By Dan Weil
David Rosenberg, chief strategist at Gluskin Sheff & Associates Inc., apparently thinks global bonds and the U.S. dollar are more than a little overvalued.
"Make no mistake: bonds are already priced for the world to come to an end, and the world is not coming to an end," he said, according to the (Canadian) Financial Post.
"And looking at the massive net speculative dollar long positions on the InterContinental Exchange, the bull view on the greenback is arguably the most crowded trade there is across the planet."
The 30-year U.S. Treasury yield hit a record low last week, and the dollar has risen to multi-year highs against a range of currencies in recent weeks, including an 11-year peak against the euro and a seven-year zenith against the yen.
The 10-year Treasury yielded 1.92 percent Monday morning, the 10-year German government note yielded 0.37 percent and the 10-year Japanese government note yielded 0.34 percent.
Yields overseas are dropping amid economic weakness there. And those low yields are pushing global investors to Treasurys for their higher yields.
Nobel laureate economist Robert Shiller of Yale University has an interesting take on the U.S. bond rally. He thinks it's based on fear.
"Where will this [the economy and financial system] be in 20 or 30 years? That’s the scary thing. I think people are spooked by that," he told the Financial Times. "They [investors] are bidding up bonds, they’re bidding up stocks too. There aren’t enough safe assets."
As for bonds, "The U.S. bond yield has been going down for 35 years. It’s not a crisis phenomenon. It can’t keep going down," Shiller said.
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Poster Comment:
The globalists are calling for total global war. Will you survive it?