Gundlach Says Treasuries Above 3% Would End Bond Bull Market (BBG)
“Almost for sure we’re going to take a look at 3 percent on the 10-year during 2017,” Gundlach, the chief executive officer of DoubleLine Capital, said Tuesday during his annual “Just Markets” webcast from New York. “And if we take out 3 percent in 2017, it’s bye-bye bond bull market. Rest in peace.”
The value of global equities this week climbed above $68 trillion, up from about $65 trillion the day before Donald Trump’s victory in the U.S. presidential election. Bonds have lost about $2 trillion in that time. Yields on 10-year Treasuries soared after the shock result as investors ratcheted up expectations for the pace of U.S. rate increases.
Rajeev Misra, who built Deutsche Bank AG’s large credit-derivatives business in the last decade, is leading a crew of ex-bond traders and Wall Street salespeople helping Masayoshi Son raise and manage the SoftBank Vision Fund. Others include a trio of Deutsche and Goldman Sachs Group Inc. alums well-connected among Middle Eastern royals.
Top inauguration planner Tom Barrack told pool reporters on Tuesday that the event planners are focused on avoiding “a circus-like celebration” when the new president is sworn in next week.
While VCs are sitting on a gigantic stash, the situation puts pressure on them to help sell more of their startups this year, either to larger companies or the public markets. Otherwise, the firms may not be able to sustain fundraising growth if endowments or pension funds, which have poured cash into venture funds in recent years, start looking for opportunities elsewhere.
Silicon Valley Needs Startup Drano (Gadfly)
I will continue to torture a metaphor about a clogged pipe to describe the situation in Silicon Valley. Investors keep stuffing money into one end of the pipe, but the amount coming out the other end isn't where it needs to be.
AQR’s quants say they’ve had it after listening to more than a year’s worth of hectoring from analysts who blame managed futures and risk-parity strategies for everything from August 2015’s China meltdown to the post-Brexit plunge. “The analysis is inaccurate,” said Brian Hurst, a principal and portfolio manager for AQR’s managed futures and risk-parity strategies. “They are using oversimplified models with bad inputs.”
As long as appointees sell all of their stock and then reinvest it in Treasuries or mutual fund indexes that don’t pose a conflict with their roles in the administration, the capital gains are deferred until they sell the Treasuries or mutual funds. But notice this: The taxes are not eliminated. Not at all. They will eventually have to be paid.
We start from a good place, vis-à-vis the market. We have a well-established business in Luxembourg. The assets in those Sicavs [European-domiciled funds] total about $140 billion, so they are substantial. We have a lot of people in Luxembourg, we know the regulator and we have the transfer agency. We put a big bet on years ago not to play in the domestic funds business in Europe, but to play in the cross-border market. We decided to put everything we had effectively into Luxembourg for all of our cross-border distribution.
If you’re a California twentysomething with a couple of bills burning a hole in the pocket of your artisanal selvedge jeans, you’re either saving it for the vinyl release of Run the Jewels 3 or you’re swinging by Whole Foods to pick up two pints of camel’s milk. Raw camel milk has become “a thing” among the cutting-edge health-conscious—thanks to the efforts of another California-based twentysomething—and has been credited with improving conditions ranging from autism to Crohn’s disease. But the decidedly less trendy FDA is telling the head of a camel milk distribution network (also “a thing,” apparently) to knock it off with those unsubstantiated claims.