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David Rosenberg: Why I’m still a bull on bonds

Of course, there are no simple solutions.

“There’s a widespread belief that the U.S. economy is going to grow vigorously, that Europe will solve its problems, and that emerging markets will propel a global recovery in the year ahead. Over the near term, it may not be a bad idea to lighten up on the bearishness. Nonetheless, I do think that the U.S. economy will grow only about 2 per cent next year and that core inflation will continue to decline.

I’ve been a long-term bull on bonds; I see no reason to change my viewpoint now. I think all these notions are questionable. Let me explain what I see as the biggest threats to the sunny consensus for 2011.”

– U.S. home prices fall further.

– U.S. state and local cutbacks

– A spike in U.S. Treasury yields.

– Europe hits problems – again.

– Bad news out of emerging markets.

– Sharp increases in energy prices.

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/david-rosenberg/
why-im-still-a-bull-on-bonds/article1839634/

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