INVESTORS INSIGHTS - Beware Liquidity Drying Up Global Bond Markets

Liquidity Mirage Causes Volatility

In Government Bonds

At the moment, volatility in the government bond market continues to be a huge theme in the market and one that investors need to consider and address.  Whatever the initial causes of the adjustment in relative and absolute yield curves and there are plenty of potential culprits – Federal Reserve rate expectations, European Central Bank quantitative easing, inflation forecasts etc. – the subsequent severe volatility has been without doubt exacerbated by the lack of liquidity.

What is particularly worrying is that this lack of liquidity is occurring in global government bond markets, which are deemed to be the most-liquid fixed-income sectors.  To highlight this issue, Bloomberg reported that on ICAP's  BrokerTec  platform's (an electronic trading system for FI markets) April volumes fell 14 per cent from a year ago and were the lowest in six years. Read More.

INVESTORS' INSIGHTS  - "Today's Edge" 

Sooner or later the bond market will run out of bigger fools as inflation is much higher than reported by governments while investors are losing principal with negative real returns. In essence we are seeing a global debasement of all currencies under present policies.

When the bonds crash they will bring down the markets too. Time has come to unload those highflyers that have no earning because they can drop like a stone from dollars to pennies, all in the blink of young girl's eyes.

International Offices

May 19, 2015 

Humanity's Question: To be, Or not to be?

WHETHER IT IS NOBLER IN THE MIND?

(Special Report)

First Financial Insights

THAT IS THE QUESTION...

Today we are republishing a  commentary that was posted back in January 2013. The post is even more relevant today, as the critical issues we face as a species are escalating almost it seems beyond control. Reports are also being made by various LEGITIMATE groups including NASA, UN bodies and the White House and Pentagon. These reports are posted through-out our affiliated blogs and may be searched by keyword . Moreover, let's not forget too, that Stephen Hawkings sits on a committee that is actually planning "end of world events", while The Bank of England  is calling for a wholesale change in the dogmas of classical economics - as the stresses of infinite growth are self-evident in so many countries around the world. 

As a further result, the possibility that the EU, Japan, China and other third world nations could financially collapse is a very real danger that could be sparked by an abrupt climb in global interest rates. Many events at any moment could spark this rapid rise, that would cause the greatest and most unprecedented collapse in asset values around the world where credit and banking bubbles in real estate and market investments, exist almost everywhere - another dark age looms large on the horizon.

Economics is not the only cancer that has terminal implications. Overpopulation and unbridled industrial destruction of the biosphere are crossing over to the exponential phase. Should the average global temperature rise just a mere 2 degrees C., some experts say we risk triggering a methane bomb that yields the same consequences of the Permian Extinction's climate conditions  - over 95%  of life on the planet was wiped out in short order.

Words of Science

Read More...