zerohedge.com / by Tyler Durden / Sep 15, 2016 6:59 PM
Here are a handful of striking observations on the real problem with the global debt bubble, courtsy of CLSA’s Damien Kestel, and why any spike in interest rates could lead to a global fiasco.
Extraordinary low interest rates around the world have delivered a monumental blow to many investors. Falling interest rates have translated into rising liabilities for (defined benefit) pension plans and, secondly, millions of retirees, who depend on income from savings to take them through retirement, are struggling to make a decent living.
Consequently, investors take risks that they weren’t previously prepared to take, some of which I am comfortable with, and some of which I am not. Take US corporate high yield bonds. The prevailing view seems to be that US corporates (ex. energy) are in very good shape with loads of cash on their balance sheet, and that they therefore offer a relatively attractive, and a comparatively safe, investment opportunity.