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Full Version: No Bubble in Stocks But Look Out When Bonds Pop, Greenspan Says
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No Bubble in Stocks But Look Out When Bonds Pop, Greenspan Says

By Oliver Renick  and Liz McCormick
August 1, 2017, 6:00 AM GMT+8

Equity bears hunting for excess in the stock market might be better off worrying about bond prices, Alan Greenspan says. That’s where the actual bubble is, and when it pops, it’ll be bad for everyone.

“By any measure, real long-term interest rates are much too low and therefore unsustainable,” the former Federal Reserve chairman said in an interview. “When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace.”

While the consensus of Wall Street forecasters is still for low rates to persist, Greenspan isn’t alone in warning they will break higher quickly as the era of global central-bank monetary accommodation ends. Deutsche Bank AG’s Binky Chadha says real Treasury yields sit far below where actual growth levels suggest they should be. Tom Porcelli, chief U.S. economist at RBC Capital Markets, says it’s only a matter of time before inflationary pressures hit the bond market.

More details in https://www.bloomberg.com/news/articles/...nspan-says
Do people still trust what Greenspan says?
As much as people keep saying that the bond bubble will burst, there will always be a buyer with infinite bullets, that is the respective country's central bank who can buy bonds indefinitely using 'printed' currency. The Bank of Japan is a prime example of this at work.