Investors worldwide are borrowing dollars to buy assets including equities and commodities, fueling “huge” bubbles that may spark another financial crisis, said New York University professor Nouriel Roubini.
(snip)
Roubini said the dollar will eventually “bottom out” as the Fed raises borrowing costs and withdraws stimulus measures including purchases of government debt. That may force investors to reverse carry trades and “rush to the exit,” he said.
So is anyone paying attention? Especially serious investors? Some are, but most apparently are not. The bond market swallowed the Treasury's latest issuance without even blinking. Delusional homebuyers are paying premiums for a new housing mini-bubble driven by an expiring tax credit. At least institutional investors are starting to get nervous about an overvalued stock market.
As for me . . . I'm just waiting for a cheap entry point on some ETFs and stocks I've been watching.
