M & G Investments

Posted on December 20, 2011 by Mike Riddell

Government bond investing used to be about analysing and assessing economic data.  Judging by the last few months, not any more.

At the beginning of June, I argued here that US economic data was a horror show and was falling off a cliff, and bond investors (and risk assets generally) seemed not to have noticed.   The chart I posted back in June stoked quite a bit of reaction, with the main points of contention being that (1) government bonds would surely sell off as inflation rose; (2) government bonds would surely sell off as sovereign debt levels rose; (3) the weaker economic data was due to the Tsunami on March 11th and would prove temporary; (4) there was a risk of a...