UBS: Where are the Bubbles?

This is a pretty good list from UBS on where the bubbles might be.  I take issue with the first one, however as I definitely don’t think there’s a bubble in government bonds.  Maybe Jeff Gundlach was right when he said there’s a bubble in central banking….That said, maybe we should just swap #1 out with Japan where the equity market looks frothy to say the least:

“We take a restrictive definition of bubble. The asset has:

(1) to be valued beyond the reasonable bounds of fundamentals and
(2) could correct rapidly.

This leaves us with only five candidates.

(1) Risk free rates: Treasuries, bunds, gilts and JGBs
(2) Credit, particularly in Europe
(3) Real estate in Asia
(4) EM stock markets: Specifically: Indonesia, the Philippines and Thailand.
We would also add Mexico on the grounds that it is expensive, illiquid and
of 28 stocks that UBS covers in the region only 5 have Buy ratings.
(5) Australian banks”

Source: UBS

-------------------------------------------------------------------------------------------------------------------

Got a comment or question about this post? Send me a message on Twitter or send me an email here and I'll get back to you shortly.
Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

More Posts - Website

Follow Me:
TwitterLinkedIn