Reveille Reconnaissance Blog
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This is an interesting anomaly. High Yield Bonds and Equities seem to have parted company when they normally correlate closely. They have parted ways before, most recently last year, but according to this article on ten occasions since 2007 when the high yield ETF dropped 5% in a 30 day trading period, the S&P 500 feel as well nine times out of ten an average of 9%. It’s worth watching, but could be a function of the fact that investors are worried about the Energy sector where High Yield Debt has been employed.
Well, it’s finally happened. For the first time since Ulysses S. Grant was President, the United States isn’t the largest economy on earth. According to the IMF, China economic output this year will be $17.6 trillion compared to $17.4 trillion for the U.S. “This will not change anything tomorrow or next week, but it will change almost everything in the longer term. We have lived in a world dominated by the U.S. since at least 1945 and, in many ways, since the late 19th century. And we have lived for 200 years — since the Battle of Waterloo in 1815 — in a world dominated by two reasonably democratic, constitutional countries in Great Britain and the U.S.A. For all their flaws, the two countries have been in the vanguard worldwide in terms of civil liberties, democratic processes and constitutional rights.”
Great cover on the latest issue of The Economist. Good article.
A friend sent me this link. It is fascinating! By placing your mouse at the left of the picture and left clicking you can move from left to right and the picture changes from 1944 to the present. Try it.