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Financial Markets are Coming Undone

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

Negative duration bets? Financial markets are coming undone.

Liquidity moves markets!

Follow the money. Find the profits! 

(Bloomberg) — Average duration in Templeton Global Bond Fund shortened to -2.21 years by end of first quarter, from – 1.6 years at end of 2018, according to latest filing.

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Builds up Mexico position to 13% from 12.6% at end of 2018, making the country the biggest portfolio holding

Brazil and U.S. remain in top three country holdings with at least 11%

Other top 10 exposures include India, Indonesia, South Korea, Argentina, Ghana
Retains short position on euro, yen, Australian dollar

Increases cash to 32.2% from 24.9% at end of 2018

Total net assets increase to $33.8b from $33.5b

NOTE: fund, run by Michael Hasenstab and Calvin Ho, has returned 3.5% in past year, outperforming 58% of peers, according to data compiled by Bloomberg.


Templeton’s negative duration bet comes as The Federal Reserve announced that they may need to buy more government bonds than it did before the 2008 financial crisis and conduct other money-market operations to implement its current approach to managing U.S. interest rates.

Or as Arthur Brown sang, “We are the Gods of hellfire,  and we bring you … FIRE!”


Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. I may receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

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