Tuesday, October 5, 2010

Other bubbles

Death of coporate bonds?

Bill Mott, of PSigma Income said: "If fears of deflation prove unfounded or lead to an inappropriate policy response from central banks, then we could currently be in a 'bond bubble' and the flows into bonds and bond funds since 2009 could be a repeat of the money that poured into technology, media and telecoms stocks at the height of the 'dotcom bubble' in 2000."

Posted by hpwatcher @ 02:06 PM (2625 views)
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17 thoughts on “Other bubbles

  • Bubble predictions are in a bubble.

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  • Bubble predictions are in a bubble.

    ”Everything is a bubble”

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  • general congreve says:

    If the bond bubble bursts where on earth will all the money (belonging to the ones that are first out of the exit at least) flow to for safety. I really can’t think…

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  • sibley's b'stard child says:

    @ 3

    Dot com start-ups?

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  • @ 3

    Radio stocks?

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  • @3 is it chicken farming?

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  • @3 – you mean property, dont you 😉

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  • general congreve says:

    Thanks for the help guys, but I’m pretty sure it’s not any of those. Damn it, I really have no idea. Oh hang on, it’s the dollar isn’t it? Is that it? Or was it the Euro? No wait, the pound, yes, I’m sure that’s it, the pound, we’re all saved!

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  • general congreve says:

    $1340.

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  • letsgetreadytotumble says:

    Can it go to $2000?
    Or could this be yet another bubble?

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  • @3 I think it will all go into tulips. You can’t beat a nice bunch of flowers!!!!!!!!

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  • the number cruncher says:

    @3 I hear that Florida real estate is only ever to go up

    I also heard that you would be wise to invest in equity in the wonderful South Sea Company

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  • general congreve says:

    If you view gold as just a thing to invest in, like tulips for example, then it’s easy to scream bubble. If you view it as another currency, which is exactly what it is for the most part and is why it is behaving the way it is, then you will understand this is not a bubble.

    Gold is merely the best store of value (money) out of the range currently on offer. The rise in it’s price relative to all currencies is just demonstrating that people believe that, and they will continue to do so until draconian spending cuts are made across the world and interest rates rocket – see that happening any time soon?

    Before you say anything, the conservatives can’t even manage to save a couple of quid on child benefit for the over privileged without causing uproar, imagine the difficulties they’ll face in making the real cuts needed. Besides most won’t be implemented for 4 years. I wander what the national debt will look like by then?

    Of course, you are all welcome to stick with other forms of cash, but I really do recommend the time tested golden variety that isn’t being debased because it cannot be debased like all the others currently are.

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  • general congreve says:

    @11 – Thanks Jack C – I hope we do see a major pull back, it’s been promised many a time, but never seems to come. When oh when will I have the opportunity to buy more at reasonable rates? This relentless march upwards is punishing.

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  • slartibartfast says:

    All bonds (INCLUDING Government bonds) represent private saving.

    There is a lot of saved money. There is only so much economic activity from which to extract interest and dividends.

    Like a swarm of flies in search of food, they move from one turd to another.

    Note: Government debt = Private savings. It is hillarious watching the Conservative party conference, when you understand it.

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  • slartibartfast says:

    To all the Gold bugs.

    Gold pays no interest or dividend. It’s only value is as a solid rock for savings, as they struggle to breathe in a stormy sea.

    The secret with this rock is this. When calm returns it is ALWAYS underwater.

    You may be sitting pretty today, but don’t be caught on the rock when the storm finishes.

    BTW. If austerity grows into a big wave it will swamp you.

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