Whitney Tilson has some interesting observations on bond yields across the globe. Yields of countries deemed to be ‘safe havens’ are near record lows. Some countries’ have debt trading at levels unseen in several hundred years. On the other hand, countries looked upon as ‘weak’ have stocks with market caps at low levels.
Bond markets seem to be indicating the world is coming to an end:
Odey Asset Management's Special Situations Fund was down 3.2% in March, compared to its benchmark, the MSCI World USD Index, which was up 3.3%. Through the end of March, the fund is up 8.7%, beating the benchmark's return of 4.9%. Q1 2021 hedge fund letters, conferences and more Odey's Special Situations Fund deploys arbitrage and Read More
The US 10 year Treasury yield last Friday hit 1.47%, breaking its prior all-time (200-year) low of 1.55% set in November 1945.
The Dutch 10 year government bond yield (1.61%) is the lowest in the past 500 years.
The German 10 year bund yield (1.20%) is the lowest in the past 200 years (bar the hyperinflation period of 1923/1924).
The French 10 year government bond yield (2.36%) is at a 260-year low.
The UK 5 year government bond yield is at a 110 year low
What about PIIGS equity markets
The market cap of the Italian Financial sector is now the same as the market cap of Colgate-Palmolive ($47bn).
The market cap of all Euro-zone Financials ($361bn) is less than that of Canadian Financials ($377bn).
The market cap of Spain and Italy equities combined ($396bn) barely exceeds that of Taiwan ($368bn).
The market cap of Portugal equities ($16.4bn) is the same as that of Whole Foods, the 191st largest stock in the S&P 500.
The market cap of Greece equities ($5.8bn) is the same as that of TripAdvisor, the 400th largest company in the S&P 500.
The CDS of Portugal exceeds Veneuela’s, the CDS of Italy exceeds Lebanon’s and the CDS of Spain substantially exceeds Iraq’s.