And where do we go from here?
Nobody knows.
How can we summarize the situation?
The banks will be saved.
The shadow banking system will suffer the pain of free markets.
The assets (housing, commercial real estate, CMB, ABS, and many more) will be saved.
How?
This question is not structured, but we will print the money.
Anyhow.
The market believes that this monetary stimulus at the end will increase the odds of inflation. When inflation runs high Treasury Inflation Protected Securities (or TIPS) outperform regular Treasury Bonds. When inflation expectations are low, the opposite is true.
Now, this is what the markets believe:
Nobody knows.
How can we summarize the situation?
The banks will be saved.
The shadow banking system will suffer the pain of free markets.
The assets (housing, commercial real estate, CMB, ABS, and many more) will be saved.
How?
This question is not structured, but we will print the money.
Anyhow.
The market believes that this monetary stimulus at the end will increase the odds of inflation. When inflation runs high Treasury Inflation Protected Securities (or TIPS) outperform regular Treasury Bonds. When inflation expectations are low, the opposite is true.
Now, this is what the markets believe:
Yes: more inflation. As the ratio climbs TIPS are performing better than the 20-year Treasury.
That’s the news from Ireland, friends.
It’s cold here, the mood is icy, people are queuing for hours for the dole and property prices are swinging. Downwards, that is.
Banks are living on the edge.
The Celtic Tiger is no longer.
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