REPORT: UBS Is Going To Send A Letter That Could Scare The Heck Out Of Clients Invested In Bonds

In order to avoid financial loss for the clients as well as the business, UBS is now classifying what were once medium-risk investors into high-risk investors. It also doubles as a warning which possibly indicates anticipation of a looming catastrophe.

It really looks like the investment industry is trying to get investors to participate in this “great rotation” from bonds to equities.

According to Charlie Gasparino (via Josh Brown) some clients of UBS are about to get a shocking letter in the mail. Continue reading

Bank of America issues `bond crash’ alert on Fed tightening fears

The 1994 bond shock – and seared in the memories of bond-holders – ricocheted through global markets. It bankrupted Orange Country, California, which was caught flat-footed with large bond positions. It set off the Tequila Crisis in Mexico as the cost of rolling over `tesobonos’ linked to the US dollar suddenly jumped.

Bank of America said the “Great Rotation” under way from bonds into equities closely tracks the pattern of 1994, with bank stocks leading the way. Continue reading