![]() All of this debt is funded by insurers, pension funds and other institutional investors who have been forced to push their money into private markets because the rates on treasuries and other government debt are so low that they simply can’t fulfill obligations to their customers.Īs a result, corporate debt is cheap, very cheap. It is sinister because we don’t control it, nor do we understand it - we don’t have a historical precedent for it.įeeding off the historically low rates, corporate debt is up 50% from the 2008 levels. Markets are ‘melting up’, propped by the free money. All this easy money is looking for home, being pushed into all asset classes in investors’ desperate search for yield. ![]() ![]() Instead, something much more sinister is lurking under the surface - the colossal levels of cheap money in the system. It is hard to put finger on anything systemic that could cause the next recession. Even John Templeton admits that when people say things are different, 20% of the time they are right. So is it this time? Well, it’s not impossible. Since then, people couldn’t stop, but trying to come up with reasons why it is. John Templeton famously warned of the four most dangerous words in investing (“ this time it’s really different”) in 1933. Ray Dalio, for one, seems to be on a march to prove everyone that we are at the precipice of an epic social meltdown. How long can this go on? …and are we at the peak yet?Ĭertainly, it doesn’t comfort anyone that some of the most respected investors of all times have turned to prolific writers on the subject. It’s the longest bull run in history, surpassing its 10th year in December. stocks and bonds are at all time highs in a relentless ‘melt-up’ that seems to ignore anything you can throw at it: Iran, Hong Kong or the Trump’s war on China mean nothing.
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