Paul Tudor Jones Bearish on Bonds; Prefers Cash, Commodities and Real Assets

Goldman Sachs latest Top of Mind publication is about the bond bear market, and there are a number of opposing views on whether yields are going to continue climbing, or if inflation is going to accelerate or stay under control.

One of the most bearish views on bonds came from Paul Tudor Jones, the founder, CIO and principal of Tudor Investment Corporation, which has c$11 bn of assets under management according to Pitchbook.

Here are some of the most interesting quotes in the interview.

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No Sign Yet of Central Banks Balance Sheets Declining

sea, wave

Total assets held by major central banks are above $20tn. While Fed’s balance sheet has stabilized, the balance sheets of ECB, Bank of Japan and Bank of China have been increasing steadily.

Of course, the reduction in Fed’s balance sheet, expected to effectively start in 2018, will have a material impact on financial markets – the recent spike in volatility might be seen as a sort of recognition of that fact.

But global monetary base is still growing, which will in the end limit the potential for higher rates going forward and sustain high valuations in financial markets.

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Les (quelques) raisons d’être optimiste

Nombreux sont les investisseurs qui font part de leur inquiétude ou de leurs doutes quant à la perspective d’une prochaine sortie de crise. De l’avis de gros asset manager, celle-ci ne sera que longue et sans doute semée d’embuches. Pourtant, certains stratégistes continuent d’adopter la méthode Coué et se focalisent sur les rares bonnes nouvelles du moment. Ainsi ce commentaire de Nomura daté du 3 octobre: Continuer la lecture de « Les (quelques) raisons d’être optimiste »