The Australian: Global markets in uncharted territory without...

theiain1 · Dec 8, 2012

http://www.theaustralian.com.au/bus...-to-guide-us-ubs/story-e6frg916-1226532487448

UBS head of global sovereign research Michael Dow said that the explosion in public debt, and the frantic efforts by politicians and policymakers to deal with the consequences, had produced an environment where "policy risk" now determined asset prices.

"The actions of the Federal Reserve, the European Central Bank or the President of the US with congress on fiscal stimulus are now more important for valuations than assessing cashflows and discounting them back," Mr Dow said.

"Instead of stocks and bonds being determined by the market, there is a total of about 12 to 15 people making the decisions that affect asset prices."

The inevitable result, he said, was a heightened degree of risk associated with investment, because fundamentals were no longer as important.
Click to expand...

Intervention by policymakers had also reached an all-time high, with central bank balance sheets reaching 20 per cent-plus of GDP in the US, more than 30 per cent in

Japan, and somewhere in between for the Bank of England and the European Central Bank.
Click to expand...

"If you think the predominant pathway will be debt service and growth, you should invest in riskier assets like equities and high-yield bonds," Mr Dow said.

"If you think it's inflation, you should consider infrastructure, real estate and commodities, but if you think it's default, then cash is the only safe place to be . . . Move to a cave by a pond of fresh water with wild game nearby."
Click to expand...

TheEnd · Dec 10, 2012

So when the hell is Japan goin to default? The mathematically already have..

Henry Wartooth · Dec 10, 2012

TheEnd said:

So when the hell is Japan goin to default? The mathematically already have..
Click to expand...

But who's going to say it?

Log in or Sign up

The Australian: Global markets in uncharted territory without...

theiain1 Member

TheEnd Well-Known Member

Henry Wartooth New Member

Share This Page

Log in or Sign up

The Australian: Global markets in uncharted territory without...

theiain1 Member

TheEnd Well-Known Member

Henry Wartooth New Member

Share This Page

Useful Searches