Treading Water, part the second

Well, the NYT has finally caught up with these endeavors. As mused here more than once, The Giant Pool of Money is still out there, and continues to grow. Landon Thomas reports the extent, but fails to direct the reader to the elephant in the room: the CxO class has run out of ways to turn fiduciary capital into profitable physical capital. Fiduciary investing is just Ponzi with ribbons.

"Asia and Europe keep exporting their savings to the rest of the world," said Brad W. Setser, an expert in global financial flows who worked at the United States Treasury from 2011 to 2015. "All this money sloshing around looking for a home is not healthy -- it indicates a real lack of demand in other parts of the global economy."

IOW, the idle rich keep demanding real return rates of interest for their idle cash. Not going to happen.

"It has really caused spreads to move," [Ken Monaghan, who oversees high-yield bonds for the global fund manager Amundi Smith Breeden] said, using Wall Street jargon to describe what happens when the interest rates of these bonds decrease as investors pile in. "We are seeing institutional investors come to us and ask for levels of risk that they have never asked for before."

Only when the CxO class figure out how to generate real growth in physical investment will there be real growth in the global economy. It helps if that growth ends up in the hands of the 99%.