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16/10/15: IG Conference: Markets Outlook

Friday, October 16, 2015 10:33
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(Before It's News)

trueeconomics.blogspot.com / by Constantin Gurdgiev / October 16, 2015

My speaking points on the topic of the Markets Outlook for yesterday’s IG conference:

Short themes:

Theme 1: Markets pricing in advanced economies: 

– EV/EBITDA ratios signal overvaluation;

– EBITDA/Interest Expenses ratio is at below 2010 levels (below 14%) despite extremely cheap debt.

A handy Bloomberg chart:

B4INREMOTE-aHR0cDovLzQuYnAuYmxvZ3Nwb3QuY29tLy0zUG1veTJIV082QS9WaUNvLU9XQ1ZpSS9BQUFBQUFBQVo4MC9icDRuT2dCRVRVdy9zNDAwL0NSV3pOTGpXc0FBa2JZQS5wbmctbGFyZ2UucG5n

– Global debt cycle has turned – sovereigns are not leveraging as fast or deleveraging, but corporates leveraged up.

– Much of pricing today reflects migration from equity to debt

– In this environment – long only allocations are problematic.

Theme 2: Emerging markets, especially BRICS

– Idea of 3rd Wave – Goldman’s thesis – is based on two drivers: duration of the crisis (‘this can’t be going for so long…’) and firewalls (‘this can’t spill into the developed economies…’) both of which are

– There are no fundamentals to support robust recovery view

– Again, allocations are highly problematic.

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The post 16/10/15: IG Conference: Markets Outlook appeared first on Silver For The People.



Source: http://silveristhenew.com/2015/10/16/161015-ig-conference-markets-outlook/

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