By Steve Blumenthal, CEO, CMG Capital Management Group
“Negative-yield bonds now account for some €1.5 trillion of debt issued by governments in the euro area, equivalent to almost 30% of the total outstanding. Many expect even more of the global bond market to fall into negative yield territory. Half of all government bonds in the world today yield less than 1%.” – John Mauldin
My personal view is that zero to negative rates will continue to drive money into risk assets. What does a European do with negative rates, a sovereign debt crisis, bank risk and lost confidence in government authorities? Smart money moves to where it is treated best and that is likely to be U.S. equities. So the aged and expensive cyclical bull can grow to be even more aged and expensive. But the snow is deep and mountain unstable. Which snowflake trips the next slide has yet to be determined.