Guest post by Peter Tchir.
Today I will be attending Ben’s talk in NY. I’m curious to see him speak in person, but can’t help but think of the questions I would ask if I could.
- Do you think that low rates are hurting savers, allowing big established businesses to make money while stopping new entrants, and do you finally admit your wealth effect theory is totally wrong since the wealth isn’t well distributed and has failed to produce results?
- At one point will you admit that the ultimate exit strategy is to just forgive the debt? That for all the talk about fiscal cliff, it would still leave us with a large annual deficit and really no end in sight to a ever growing pile of debt, making debt forgiveness the logical next step since you already pay back all the coupon income?
Okay, those are the questions that I would like to ask, but if I was given a chance to ask those questions, I would probably be too nervous. They seem obnoxious, even by my standards, and as much as I’d like answers to them, here are some more likely questions I’d ask.
From one bubble to another bubble? By Sober Look.
If you look at the chart from last week that shows outflows from high yield funds (see discussion), one thing that stands out is that loan funds are still seeing inflows. Part of the HY outflows actually ended up going to leveraged loans, as the recent uncertainty pushed investors to move higher in the capital structure. In fact loan funds AUM hit a new record in October.