1st Quarter Equity Report with Chuck Gibson "I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody. " ~ James Carville By Catherine Austin Fitts This week, we will post my interview with Chuck Gibson – managing member of Financial Perspectives and my partner at Sea Lane Advisory, LLC. Chuck has prepared an excellent presentation rich with analytics and charts. In the first part of our discussion, Chuck covers what happened in the equity markets during 2013. Then we turn to look at the fixed income markets and the historic changes underway. Last year we experienced rising interest rates, with investors in long term treasury bonds and bond funds experiencing a 10-15% loss in value. Sovereign government's struggled with credit quality as debt loads throughout the developed world grew. Central bank balance sheets expanded as a result of repeated interventions and bond buying. Whatever happens in 2014, it seems that consolidation in the fixed income markets is likely. What could rising interest rates and more expensive cost of fixed income capital to sovereign and municipal governments as well as companies mean to global stock markets? What do historical patterns indicate? These questions are of profound importance to all of us. Many people under 40-45 in the developed world have no personal memory or experience of living in a period of rising or high interest rates, let alone how such changes can generate new opportunities, dislocations and risks throughout our economy and culture. Whether we are investors, pension fund beneficiaries or citizens and taxpayers, we are all impacted by the changes underway in the fixed income markets and a global financial system that is swimming in leverage. Please do listen to this one and take some time to think about what rising interest rates or falling liquidity in the fixed income markets might mean for you, your household and business budgets, your assets and your community. Our interview with be posted on Thursday. It's the last week of the month, so no Money & Markets this week. |
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