In this week's Off the Cuff podcast, Chris and Brian discuss:
- Treasurys On The Rise
- Global capital is beginning to seek safe harbor
- Mispricing Risk
- The biggest failing of today's markets
- The Ticking Sovereign Debt Timebomb
- It's a questions of "when" not "if"
- The Supremacy of Risk Management
- Should be the #1 focus of the prudent investor
This week, Chris welcomes back Brian Pretti for a follow-up discussion on global capital flows. Both take note of the current trend in rising Treasury bond prices.
A rise in Treasury prices (or, put otherwise, a decline in Treasury bond rates) can be interpreted as a signal of growing investor confidence; that the outlook for risk is improving. Of course, this seems difficult to swallow in an environment of escalating geopolitical tensions (Russia/Ukraine, China/Japan, China/Vietnam, etc), all-time high equity prices, bloated sovereign debt levels, and anemic GDP growth around the world.
Instead, Brian sees the rise as due to a growing paucity of options for global capital to find shelter in. Take Europe, for example. The spread between US and German bonds is so large now that US Treasurys offer a notably better return. Add on top of that the recent weakening of the Euro and the perceived appeal of Treasurys looks even better.
A quick glimpse at the stratospheric prices in fine art and the eye-popping escalation of real estate in London, New York and Silicon Valley, adds additional support to the theory that the flood of capital resulting from central bank liquidity
by kugscheese 
