Francesco Filia - Measuring the Bond Bubble
A key conviction of ours is that we live through a Twin Bubble in asset markets: an Equity Bubble, particularly in the US, and a Bond Bubble, particularly in Europe. We know how we got here: the irresistible push of 10 years of massive passive public flows by major Central Banks (together with NIRP policies), which led to few years of large-scale passive flows by a private sector made of ETFs, risk parity funds, vol funds, trend-chasing algos. Still, the valuation issue remains, it affects expected asset returns from here on, and may therefore cause potential deep re-pricings along the way.
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