Am a non-bond person who got alarmed browsing this thread:
a. If any asset class is to suddenly collapse, it should surely mean a huge drop in value. In such situation, wouldn't that mean equity could collapse as well? ie. not so much where liquidity flows to, but value is lost. If its a "bubble burst", that would be sudden and therefore offer limited opportunity fleeing into cash or equity.
b. Based on given wiki numbers, global bond mkt size (2009) is > 2 times global stock mkt size. That could have tremendous impact on equity. However if the 37 trillion is for 2008 (i could not find the number in the wiki), we know that equity has increased substantially since.
Sub-prime all over again?! Junk bonds wiki has est value at USD146billion in 2003 (http://en.wikipedia.org/wiki/High-yield_debt). Doesn't seem so much now, phew.
Can the 'normal' bond market really burst suddenly or at all? Or perhaps it would merely deteriorate slowly? That could mean flowing to other classes as arthur says. Potentially how bad? Maybe refhound or others can comment?
a. If any asset class is to suddenly collapse, it should surely mean a huge drop in value. In such situation, wouldn't that mean equity could collapse as well? ie. not so much where liquidity flows to, but value is lost. If its a "bubble burst", that would be sudden and therefore offer limited opportunity fleeing into cash or equity.
b. Based on given wiki numbers, global bond mkt size (2009) is > 2 times global stock mkt size. That could have tremendous impact on equity. However if the 37 trillion is for 2008 (i could not find the number in the wiki), we know that equity has increased substantially since.
Sub-prime all over again?! Junk bonds wiki has est value at USD146billion in 2003 (http://en.wikipedia.org/wiki/High-yield_debt). Doesn't seem so much now, phew.
Can the 'normal' bond market really burst suddenly or at all? Or perhaps it would merely deteriorate slowly? That could mean flowing to other classes as arthur says. Potentially how bad? Maybe refhound or others can comment?