mardi 4 novembre 2014

The foam bath - current bubbles

Here is my list of current bubbles. There are so many of them that it is looking now rather like a foam bath. The characteristic of most of them, behind the scenes: an explosive accumulation of debt - at a much faster pace than any real-economy growth.
  • tech companies (especially those speculating on their own shares with new debt)
  • stocks (most) (reason: record margin debt, companies speculating on their own shares, rush of small investors channeled into the stock market by negative real interest rates on deposits)
  • shale oil companies (producing at a loss, breakeven price at least 150$ / barrel, now losses going faster due to oil prices under 80$)
  • junk bonds (repackaged at record pace into AAA-rated CDO's / CLO's !)
  • bonds (most, especially government bonds)
  • real estate in "hot" places (worldwide)
  • student loans
  • auto loans (especially subprime)
  • home equity loans

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