Loading ...tell that to Puerto Rico–or Illinois..or California..to govvie pension plans etc etc
But back to Tajikistan’s oversubscribed issuance: its bonds were rated B- by S&P, with the ratings firm estimating the country’s GDP per capita at $900, putting it among the lowest of the sovereign nations it rates, but said it sees Tajikistan’s growth prospects improving gradually. Of course, that sale followed the previously discussed June bond-market debut of the Maldives, a tiny nation in the Indian Ocean that raised $200 million in a sale of five-year bonds with a 7% coupon.eAs Deutsche Bank’s chief macro strategist Alan Ruskin said earlier today…
“As we look at what could shake the panoply of low vol forces, it is the thaw in Central Bank policy as they retreat from emergency measures that is potentially most intriguing/worrying. We are likely to be nearing a low point for major market bond and equity vol, and if the catalyst is policy it will likely come from positive volatility QE ‘flow effect’ being more powerful than the vol depressant ‘stock effect’. To twist a phrase from another well know Chicago economist: Vol may not always and everywhere be a monetary phenomena – but this is the first place to look for economic catalysts over the coming year.”
Ruskin is right, of course, but where he is wrong is the assumed reaction by central bankers: having cultivated the ‘wealth effect’ for the 1% for nearly a decade, will central banks suddenly turn their backs on the capital markets, their primary “wealth expansion pipeline”, and see the fruit of their labor crushed? Judging by the record low volatility and credit spreads, and record high stocks, the market’s verdict is simple: never.