j831robert wrote:Welcome back - Sunny South wasn't it ? Similar mental exercise - to acquire more at firesale prices and thereby stip the cash account or simply sit back and re-enforce the cash account against hard times. Made easier by the fact that we really don't need to acquire more income.
The number of risk-free financial assets is in decline, according to an International Monetary Fund (IMF) study.
This could make the global financial system more unstable by threatening runs on sovereign debt and increasing herding behaviour by investors. In recent decades, bonds issued by stable, rich countries were considered risk-free. However, the onset of the financial crisis in 2008 and the sovereign debt crisis has "reinforced the notion that no asset can be viewed as truly safe", the study states.
Some formerly highly rated governments have had their credit ratings downgraded and the supply of "safe" assets is falling meanwhile and could be cut by $9 trillion ([euro]6.87 trillion) globally in coming years, or 16 per cent of the total, according to IMF staff estimates.
The supply of safe assets by the private sector has also declined, IMF economists say.
The reasons for this include the failure of "securitisation" in the US, which involved low-quality mortgages being bundled and sold as high quality financial assets, many of which became worthless after the US property market crashed.
The contraction in the supply of safe assets has coincided with an increase in demand for such assets, driven by "heightened uncertainty, regulatory reforms and crisis-related responses by central banks".
The tightening of supply and the increase in demand could lead to greater volatility in global financial markets, the report concludes
Mike Schimek wrote:I sold a lot of stuff into today's rally and have gone defensive. The indicators I look at shows that the U.S. economy has gone back into recession and it's getting worse. Canada has started to slide too, though not as bad (thanks to a pro business Harper). Sell in April and run away before those in May try to.
blonde wrote:as an aside...stick with the 'Winners'
Mike Schimek wrote:Swung back from defensive to offensive, the recent decline over the past several weeks has made a lot of things cheap
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