Tuesday, August 2, 2011

Tuesday Links

Real yields on German bonds hit zero! There is enormous demand for good quality sovereign debt.

ZH: JP Morgan: "Fiscal Policy Will Cut Our 2.7% 2012 GDP Forecast To Sub 1%". Sub 1% GDP growth is invariably associated with recessions, so these analysts are officially putting that possibility on the table.

ZH: "European stocks fall to 10-month low, Swiss Franc rose to a record against the dollar; 5-yr CDS for France, Italy and Spain rise to records"

WSJ profile of Jim Grant: "We collectively wear interest-rate goggles because we see market values through the prism of zero-percent funding costs. Everything is distorted." Grant likes the short Treasury/long big cap value trade. I think he is early but later on I expect to do well buying real assets with long term fixed rate financing (i.e. short treasury bonds).

ZH: "Food Stamp Use Surges By Most In Years As Alabama Foodstamp Recipients Double In May" Did something just happen in Alabama? You would never hear about it through our Pravda quality media.

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