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Saga of Financial Markets

Fri12152017

Last updateSat, 29 Jul 2017 12am

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Passive Index for Bonds?

Last month, PIMCO's clients pulled $5.6bn from the Total Return Fund, making total outflow since Mr Gross's departure to $110bn.  PIMCO Total Return assets peaked at $293bn in 2013.  As of end of April 2015, Vanguard Total Bond Market Index with AUM of $117.3bn overtook PIMCO Total Return Fund with AUM of $110.4bn to be the world's largest bond mutual fund. Another victory for passive index investing? 

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Emerging Market Capital Outflows 2015

Capital outflows from the 15 largest Emerging Markets (EMs) amount to $600.1 bn over the latest three quarters to the end of March 2015 is more than that of during the 2008-09 financial crisis three quarters to the end of March 2009 with amount of $545.2 bn.

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Greece's Crisis 2015

Greece’s crisis is re-surfacing.  If there is no agreement with creditors on 2015-05-12, Greece may not necessarily lead to default, or euro exit.  Greece can continue on without a deal until possibly 2015-07-20 when ECB loan repayments come due, analysts from HSBC to BofAML say; capital controls and a parallel currency may allow the country to carry on for a few months before reality sinks in.

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No default if Greece Misses ECB, IMF Payments

Most top credit rating agencies (Standard & Poor's, Fitch and DBRS) say they would not cut Greece's rating to default if it misses a payment to the International Monetary Fund or European Central Bank, a stance that could keep vital ECB funding flowing into the financial system. 

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Negative Yield Bond & Its Buyers

Buying negative yield bonds implied that you are paying for the privilege of lending money.  Yes – you are paying to own those bonds.  It is absurd but it is happening now.  The key reason of buying negative yield bonds is about profiting via the currency play.

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