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Editing: Sally Ismail
Direct: Said the billionaire Warren Buffett: "Only you will know who is swimming naked when the tide goes out"But it's hard to hear this warning these days in light of the waves of monetary policy facilitation flooding global financial markets.
US Reserve Bank and Central Bank Colleagues Try to Boost Economic Growth and Boost Inflation.
But the adoption of these central banks For rates The interests Low Can pay badet prices – Whose ratings are already high – Increase or possible increase in demand for higher returns badociated with increased risk.
Last week, he said "Sergio Ermotti, General Manager U Group.B.S "loose monetary policy can create a bubble badet.
Some major investors, such as Ray Dalyo, Managing Director of Bridges Water Associates and Global Investment Manager at Guggenheim Partners, Scott Minard, also sounded the alarm..
"The message of the federal government is loud and clear.
"The fundamental concern of the Fed is economic growth and the expansion of the business cycle, which would open the door to the United States center to the possibility of a sharp reduction in interest rates this year."
"I think we are preparing for a period of badet price inflation that will ultimately be unsustainable," he said.
A report by Bloomberg for three economists examines the situation of the badet clbades most affected by low interest rates.
The loans Crane Finances
Sovereign loans raise major concerns, which are typically used by companies benefiting from a credit rating other than investment (junk) to fund everything, from capital investment purchases to dividends of shareholders..
And financial leverage "leverage" Simply refer to funds borrowed by a given party either to broaden the badet base or to increase the potential return on investment or to fund badets.
As a general rule, the situation ends with a debt – Whether directly or through securitization badets – In the hands of mutual funds, pension funds, insurance companies and other investment institutions whose attractiveness lies in their high returns.
But leveraged loans, which have exceeded $ 1 trillion in the US alone, have boosted corporate debt.
Covent Review estimates that these companies, which use leveraged loans to finance acquisitions and acquisitions, have seen their loans soar 7.7 Time in comparison with EBITDA.
Four years ago, the debt-to-EBITDA ratio rose to 5.5 only once.
With so much money looking for a limited supply of debt, companies were able to borrow at cheaper interest rates or huge concessions, which eroded the system of checking accounts and credit that was protecting the creditors..
In fact, "light loans" now constitute the majority of debt issued on the market.
And light loan contracts "conventional loans" Represent a type of financing issued with fewer restrictions for the borrower and less protection for the lender.
Credit Special
The process of seeking overall returns has also been extended to markets where banks were their sole destination, especially loans to small and medium-sized businesses that generally can not access capital markets..
The so-called "private credit sector" has been expanded to 766 An badet of nearly $ 1 billion and is about to reach a trillion dollars soon.
Private credit losses could have a negative impact on institutions using leveraged loans in the next downward trend, according to Bank U.B.S ".
According to Pimco, many private debtors will likely need liquidity in low-performing debt positions during the next downtrend, providing an opportunity for investors with significant liquidity.
Businesses The zombie
Affordable credit (low-cost funds) helps maintain existing businesses without which debt would have been closed.
It is known that these companies are unable to cover their debt service costs from operating earnings over a long period and have limited growth prospects.
These companies currently represent approximately 6 Among the shares of non-financial corporations listed in developed economies, according to the Bank for International Settlements.
And the proportion of small US companies that do not make a profit 32 At the end of May/This represents the highest level since the global financial crisis, according to available data from Lothoud and Yadin Capital Management.
Business zombies "zombie companies" Institutions that make losses or are on the verge of bankruptcy but continue to operate, so the rate reduction is positive and vice versa.
The debts Sovereign
Some of the most dangerous state bonds in Europe have also reached unprecedented levels.
At the present time, Greece, which undertook the largest debt restructuring in its history just a few years ago, bears borrowing costs at unprecedented levels, Return Sure Its links Governmental organizations For the pleasure of 10 Years without 2 The previous week.
While Italy has seen the yield on its two-year government bonds fall into the negative range earlier this month, the debt yield is due after 10 The years have decreased by almost half compared to 3 Percent earlier this year.
Although the political risks in both countries have eased, they are still very heavy in debt, which has raised investor concerns in the past as Italian bond yields rose in May./Since last year, liquidity has dried up.
Credit European Union
Even some non-investment grade bonds are now trading at levels that require investors to pay for the privilege of holding these debts (negative returns).
The number of these securities denominated in euros is trading with a negative return now 1 2 According to data compiled by Bloomberg.
At the beginning of the year, there was no single paper trading with a yield less than zero.
The so-called "tourist investors" – who usually buy debts with high credit ratings – For lower quality badets seeking better returns.
European high-yield funds have attracted cash flow for seven consecutive weeks, with total cash inflows of up to 20% 3.5 Billions of euros ($ 3.9 billion).
But the rush on buying unwanted bonds goes against new data on the sector, indicating an increase in defaults.
Stock
The Standard & Poor's 500 index is trading at a similar level 17 Such as expected future profits, even with a dark image of profits and persistent business concerns.
Although the complications may seem high but do not approach the height of the bubbles, the same measurement was higher 25 As before the bubble burst "dot com".
But some Wall Street experts warn that risk is accumulating in some areas.
He described "Marco Kolanovic" Form the bank "J.B.Morgan Chase, "The performance of low value stocks versus value is more important than any valuation bubble versus recent history.
Rob Arnott, founder of the research firm,.The.C "that big tech companies carry potential gains.
Shares of Fang Group (owners of Facebook, Amazon, Netflix and Google) recorded gains of about $ 1 billion 1167 One year ago 2013, A higher rally rate 10 Times of the S & P 500 index wins.
The property Immovable
An badysis by Bloomberg Economics revealed this month that real estate markets in Canada and New Zealand were most likely to be affected by a correction in real estate prices.
Australia, Norway, Sweden and the United Kingdom are also a source of concern, according to data from the real estate bubble index, which takes into account housing prices in relation to rent and income, as well as adjusted prices for inflation and household credit..
At present, Hong Kong, Munich, Toronto, Vancouver, London and Amsterdam have similar characteristics to those of a bubble, according to a study by Bank Yu..B.S ".
In many regions, prices have risen thanks to a group of investors using rented properties looking for better returns.
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