BlackRock to JPMorgan See Deeper Emerging-Market Losses – Bloomberg 09-09-13

Salient to Investors:

Wall Street’s biggest firms are predicting intensifying bond losses in emerging markets, where borrowing costs have already soared to the highest in more than 4 years versus US corporate debt.

Jeffrey Rosenberg at BlackRock is not convinced we have seen the worst in terms of flows out of emerging markets and is not ready pile into them.

EPFR Global says investors have withdrawn $22.1 billion from emerging-market bond funds since the end of April, versus $4.6 billion of withdrawals from US corporate bond funds, and versus inflows of $58.8 billion in 2012, pushing the yield spread to the most since December 2008.

Edwin Chan at UBS said when underperformance causes a sell-off in the market and liquidity worsens as a result, you have a huge gapping in risk valuation.

Economists project growth in China to slow to 7.5 percent in 2013 versus 14.2 percent in 2007.

Eric Beinstein at JPMorgan Chase is defensive on developing countries’ corporate debt on the likelihood of further rate volatility and an uncertain emerging-markets growth outlook.

Stephen Antczak at Citigroup is concerned that if you don’t have this natural support in place, you could get a disproportionate sell-off in emerging markets.”

BNP Paribas forecasts Indian economic growth of 3.7 percent through March 2014 versus the 10-year average of 8 percent.

Hayden Briscoe at AllianceBernstein Hong Kong is completely avoiding India.

Economists expect the US to grow 2.7 percent in 2014 and 3 percent in 2015 versus 1.6 percent in 2013.

Mark McCombe at BlackRock is positive on China as its economy is stabilizing, but losses for emerging markets debt have the potential to accelerate.

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Bond Bubble Dismissed as Low Yields Echo Pimco’s New Normal – Bloomberg 06-11-12

Salient to Investors:

Moody’s John Lonski says G-7 bond rates indicate the markets don’t expect economic growth to exceed 3 percent.

Blackrock’s Jeffrey Rosenberg says the greed that produces bubbles is absent.

Pimco’s Bill Gross says global bond markets are turning ‘Japanese’.

UBS’ George Magnus says we are replicating the Japanese experience.

Bianco Research’s James Bianco says the balance sheets of the world’s six biggest central banks have more than doubled since 2006 to $13.2 trillion. The bond market has no value but the central banks don’t care about value right now.


Pimco’s Mohamed El-Erian says we may be in a synchronized slowdown in global economic growth for a while.”

Marc Faber expects the government bond bubble to burst sooner rather than later, because the consensus is to buy U.S. Treasuries.

Scottish money manager Stuart Thomson doesn’t see a bear market because yields are extremely low for a very good reason, fear.

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