After yesterday's US and UK market holidays which resulted in a session of unchanged global stocks, US futures are largely where they left off Friday, up fractionally, and just under 2,100. Bonds fell as the Federal Reserve moves closer to raising interest rates amid signs inflation is picking up. Oil headed for its longest run of monthly gains in five years, while stocks declined in Europe.
One month ago, we were surprised to report that the junk bond issued by French telecom company Numericable would, after its 100%+ upsizing, become the largest high yield bond on record.
Submitted by Alasdair Macleod via GoldMoney.com,
World-wide, markets are horribly distorted, which spells danger not only to investors, but to businesses and their employees as well, because it is impossible to allocate capital efficiently in this financial environment.
Exactly one year and one month ago, I penned "Fu$k the Fundamentals!": Negative Rates In EU Will Absolutely Wreck the Very System the ECB Sought to Save" a piece that warned of the consequences of the EU negative rate policy and how it would effect Spain and Denmark among other EU nations, in particular. To wit:
One of the reasons why central banks around the globe have flooded the financial system with trillions in excess reserves is to make sure that banks no longer have to rely on potentially fleeting short term deposits (and is also why negative interest rates have become the norm in so many part of the world, that $10 trillion in bills and bonds now trade with a negative yield).