Incoming! Interest Rate Risk...

"Pimco to Raise $600 Million for REIT to Buy Mortgage Debt..."

Although most central bankers in the developed world still maintain a low interest rate environment to support the economy recovery, they might soon reverse the process more abruptly than the market predict. When they do that, short term interest rate tend to spike up quickly. Pimco certainly anticipate such a scenario, and preparing for it by reducing the duration of their fixed income investments, in other words, they start to move from the short end of the yield curve (short terms bond investments) to the long end of the yield curve (long terms bond investment such as mortgage debt). It is a key signal for other bond investors to follow in the market place.

Maybe our sovereign wealth fund should do the same thing to hedge against the perceived interest rate risks?

Gold at $3000?

This chart tracks the the performance of gold since July of 2002 against the three largest bubbles of the last 40 years. Past bubbles have shown strong but steady growth for the first 7-8 years before moving into a hyper-growth phase for the last 18-24 months. Each series is adjusted for inflation and is smoothed with a 3-month moving average.

Saving the economy, or saving the bubble?

An interesting article published on the Caijing.com.

http://www.caijing.com.cn/2010-09-07/110515467.html

Bear Index

An interesting chart regarding the investment preferences for gold these days. I think I am a cub...

Avatar

Avatar has certainly become one of the hot topics these days. The two-and-a half hour Twentieth Century-Fox movie that cost about $300 million to produce and an additional $100 million to market breaks the creative barriers that have stymied 3D technology for decades. “(It) will set off a new wave of 3D film making in the years to come and is likely to accelerate consumer interest in in-home 3D,” said Pali Capital analyst Richard Greenfield. Piper Jaffray estimates the 3D market will grow from $5.5 billion this year to $25 billion by 2012 at a compound annual rate of 50 percent.

To get the 3D visual experience, the viewer in the cinema has to wear a silly looking 3D glasses that mimic stereoscopic vision. However, this may not be necessary. Indeed, a PhD student at Carnegie Mellon University had taken a standard Nintendo Wii remote and turned a monitor into 3D VR display.