Anyone questioning whether financial markets are in a bubble should consider what we witnessed in 2017:
- A painting (which may be fake) sold for $450 million.
- Bitcoin (which may be worthless) soared nearly 700% from $952 to ~$8000.
- The Bank of Japan and the European Central Bank bought $2 trillion of assets.
- Global debt rose above $225 trillion to more than 324% of global GDP.
- US corporations sold a record $1.75 trillion in bonds.
- European high-yield bonds traded at a yield under 2%.
- Argentina, a serial defaulter, sold 100-year bonds in an oversubscribed offer.
- Illinois, hopelessly insolvent, sold 3.75% bonds to bondholders fighting for allocations.
- Global stock market capitalization skyrocketed by $15 trillion to over $85 trillion and a record 113% of global GDP.
- The market cap of the FANGs increased by more than $1 trillion.
- S&P 500 volatility dropped to 50-year lows and Treasury volatility to 30-year lows.
- Money-losing Tesla Inc. sold 5% bonds with no covenants as it burned $4+ billion in cash and produced very few cars.
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brightsmart
very good article.
advice, none.
2017-11-27 11:30