E' ancora peggio del Bitcoin? (parte 1)
Si tratta di un tema che abbiamo già portato all'attenzione dei lettori molte volte.
Oggi però, vi proponiamo di leggere insieme a noi un commento che a noi è sembrato, se non altro, divertente. La domanda è: quale è oggi l'investimento più stupido che si possa fare?
There’s no shortage of stupid things in investing these days.
Among them:
• Bitcoin
• Litecoin
• Pizzacoin
• Canadian real estate
• Swedish real estate
• Australian real estate
• FAANG
• Venture capital
But European bonds are potentially the stupidest. Maybe even stupider than bitcoin!
You’ve probably seen charts of European high-yield bonds floating around — yields in the low 2s for BB credits. There was also a European corporate issuer that managed to issue BBB bonds at negative yields a few weeks ago.
I think that might have been the top.
Although there is nothing stupid about it — the ECB has been buying every bond in sight, and there’s lots of money to be made front-running central banks.
Still, it’s possible that we’ve reached the logical limit of emergency monetary policy, and the European Central Bank is going to have to exit sometime in the near future.
The question is: How are they going to exit without blowing up the bond market?
And it’s not just the European bond market. The effects have been transmitted to other bond markets as well, like our own. If the ECB exits, or, heaven forbid, the Bank of Japan tries to exit at the same time — and screws it up — there is a potential for a real meltdown.
What would a meltdown look like?
Fact: Any time 10-year yields have backed up 200 basis points, there has been a crisis. You have to go back to 1994 for the last one. And we even had a mini-crisis in 2013, which we called the taper tantrum.
If tens backed up from 2.3% to 4.3%, it would be a crisis of gargantuan proportions.
But again: crowded theater, small exit. So you know the unwind has the potential to be disorderly if the ECB is careless about how they exit.
Anyone who has seen markets in action (at least, for a decade or more) knows that selling can lead to more selling, which can lead to more selling, otherwise known as a cascading effect. Nobody under 30 knows what this looks like.