The Price Of Fear

Today's NYT article suggests apocalypse (very) soon: ...the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages. Do we really need to worry so much in the short term?

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors. Bond-Heavy Investors Want To Put Their Money In Equities (The Wall St. Journal)

Alex Trias submits:Treasuries are partying like it is 1999, and basically have been ever since 1999. The secular bull market in Treasuries must end at some point, as all secular bull markets eventually do. Until then, investors are happy to chase those past returns irrespective of the rich price of Treasuries. Fear and loathing of equities has fueled the appetite of Treasuries investors, and that fear and loathing is now entrenched after a fairly unimpressive decade long stretch for the US equities markets.

BofA Merrill Lynch equity strategist Michael Hartnett is out with a new note sporting the title "Raging Bull." The lead: "The risk of a melt-up in stocks is high and rising. Positioning, price-action, policy and a range-bound economy can conspire to cause an overshoot."

In last Thursday’s post, John Kitchen recounted our joint work on what amount of foreign financing would be required to make consistent projections of government debt, and short and long term interest rates.

Is There Enough Money in the World -- and At What Cost? From the abstract of a paper coauthored with John Kitchen: This paper examines the potential role for foreign official holdings of U.S. Treasury securities and the associated implications for Treasury security interest rates, international portfolio allocations, net international income flows, and the U.S.

Michael David White submits:We have just in the last year had the largest annual fall in real estate prices, hit the highest number of delinquent mortgages measured, witnessed a record 918,000 homes taken in foreclosure, and 11.3 million home owners now own negative equity.