Bonds In Conversation : The Great Rotation Is In Vogue

ugliest angpow i have seenugliest angpow i have seen

We have to talk about this in case you have not seen any market headline with ROTATION in it. Rotation is in vogue now. Rotation from bonds to equity, that is.

FT – Great rotation: reasons not to believe

and in case you have no access to FT Premium (like me), here is free Yahoo headline.

Have We Entered The Great Rotation?: Charles Schwab

Anyway some hedgies that I know are all spewing this “rotation” word to justify the madness that has gripped the market. It does not look like it is going to go away and there is little reason to believe that bonds will rally from here.

Interest Rates Will Spike This Year: Soros
Emerging Bond Market Points to Risk Exit – Wall Street Journal

Soros, Bill Gross, Jim Rogers, Marc Faber… all singing the same tune.

The most controversial yet honest piece came out of Bank of America, of all places, describing a potentially disorderly sell off in store for the market that is exacerbated by the rise of the ETFs and bloated bond mutual funds.

Rising Rates Could Create A Disorderly Bond Market Sell-Off Unlike Anything We’ve Ever Seen

I agree it is possible.

Without going into potentially libellous details, I encountered a fund manager of a gargantuan bond fund which is of course not based in Singapore. The sizes that we are dealing with can dwarf small economies. How do we squeeze 100 bio worth of bonds from a small country (just because the world wants exposure to it) when their bond market does not even exist ? And then, imagine the sell off later when the fund takes profits ?

Another Asian Crisis in the making ?

I will not try to sow any further doubts in your heads. It is Gongxifacai time next week and also a good time to do some reflection on each of our portfolios.

And as a hongbao surprise, I have compiled a table of almost every single issue since 2012 and their changes in the week. But with little time to vet the prices, I hope there are not too many mistakes. (do note that some of the official prices I notice like for the Mapletrees etc, do look a bit suspect or just complacent markings)