Macro Commentary
Twitter can’t pay for that kind of advertising. You know we are in a different media world when newspapers and television news channels alike are filling their content void with discussion on this week’s iconic tweets. Taking top post is the Democratic nominee for the U.S. Presidential race Hillary Clinton. She, or someone on her staff, responded with the succinct and known put-down “Delete your account” in a retort to ubiquitous social media presence Republican nominee Donald Trump. Of course in doing so she opened herself to all kinds of comments given the ongoing controversy over classified emails. The clear winner we can see are social media channels themselves. It is difficult to quantify how much free advertising the traditional media channels are providing these new sources of information, not to mention lending a halo of credibility to an already disruptive technology that is likely to force additional change to traditional news business models. According to a 2015 survey by the Pew Research Center, about half of people between the ages of 18 and 34 (Millennials) say that Facebook and Twitter were “the most important” or “an important” way to get the news. So long Action News at 11.
From a finance perspective, we take interest in the tweet from the 72-year old former bond king Bill Gross who this week tweeted that the approximate $10 trillion of negative yielding debt is a “supernova that will explode one day.” Not to say that this is a new opinion from the former head of bond giant Pacific Investment Management Company (PIMCO). We too are concerned about an environment where negative yields actually make economic sense to some investors. Companies are getting in on the action that sovereigns have been enjoying…or at least very close to it. This week, Toyota issued $186mm USD worth of yen-denominated bonds maturing in three years at a yield of 0.001%. At what point does (nearly) free money cease to have a positive effect and start to weaken confidence of a return to somewhat more normal times?