Sherlock Homes & the Mystery of Rising Debt & Falling Rates

Sherlock Homes & the Mystery of Rising Debt & Falling Rates By Victor Hill A dialogue between the Master and his trusty sidekick, Dr Watson, at 221B Baker Street, unpacks the most intriguing paradox in contemporary economics. Rising government debt levels should drive interest rates higher. Instead, interest rates are plunging to zero and below. As Holmes explains, our ultimate fate might be in the hands of an evil genius. The door of Holmes's study flung open. Dr Watson manifested himself, apparently flustered. Without removing his bowler hat, he began. "Holmes! I come hot foot from the City with three extraordinary pieces of information. First, interest rates have been halved to a new historic low of 0.25 percent. Second, government expenditure is rising well beyond forecasts. Third…" Holmes raised a pale, delicate hand. "You are about to tell me, my dear Watson, that despite the fiscal impecunity of our government, their bond yields are falling even further… Click Here To Read The Full Story The Master Investor Market Report The FTSE 100 closed the day at 6,866.42, an increase of 15.12 points. The FTSE 250 rose 12.28 points to finish at 17,699.68 The FTSE All Share climbed 7.54 points to finish at 3,732.38. The FTSE AIM All Share finished at 776.94, down by 0.12 points. Insurer Prudential (PRU) benefited from double-digit growth in Asia as it beat analysts' forecasts for the first half of 2016, with operating profits up by 6% at £2.06 billion. The company also booked a better UK retail result which helped offset its withdrawal from the bulk annuity markets following pension changes. The interim dividend was raised by 5% to 12.93p and management believe the business is on track to meet full year expectations. The shares climbed 31p to 1,423p. Get our August issue while it's hot! Click HERE to read. Shares in security and outsourcing specialist G4S (G4S) shot 16.16% higher to 227.20p after the company revealed that revenues for the six months ended 30th June climbed by 3.2% to £3.1 billion. Earnings grew by 43% to £69 million, primarily due to lower impairments. The company is currently focused on cutting debt through the remainder of 2016. Television content producer Entertainment One (ETO) received a preliminary offer of 236p from ITV this morning which would have valued the business at more than £1 billion. However, Entertainment One's board unanimously recommended that the bid be rejected, saying that it fundamentally undervalued the company and its future prospects. The shares closed the day at 240p, up by 10.34%. Tomorrow's news today Old Mutual (OML) and Ophir Energy (OPHR) will release interim results. Quote of the day "Competition is not only the basis of protection to the consumer, but is the incentive to progress." - Herbert Hoover Latest Stories Chart of the day: G4S By Zak Mir Looking at the daily chart of G4S, we have a disturbingly accurate picture of the perceived fundamentals of the company, at least in term of sentiment amongst investors. The question now in the wake of today's chart gap is whether this is the lasting turnaround the bulls have been waiting on?… Click Here To Read The Full Story AstraZeneca: Back in the Takeover Crosshairs? By Robert Sutherland Smith Bad news at Phase III: a potential buy on share price weakness. Following Post Brexit sterling weakness, foreign takeover prospects prevent it from being the obvious sell it might otherwise be... Click Here To Read The Full Story A New Investment Paradigm? NIRPs & Equity Valuations By Adam Patterson Are we entering a "new normal" in asset valuations? In an interesting recent piece in the Telegraph, Tom Stevenson, investment director at Fidelity Worldwide, suggested that the current trend for central bank negative interest rate policies (NIRP) that we are seeing across the globe… Click Here To Read The Full Story Chart of the day: Meggitt By Zak Mir The fall in Sterling has already influenced potential and actual takeover deals, and it looks as though this will continue to be the case as the divergence between US and UK interest rates makes assets here like engineer Meggitt that much more attractive after Brexit… Click Here To Read The Full Story Centrica: Out of the Woods? By Robert Sutherland Smith Centrica's cash position has improved markedly suggesting that the current prospective dividend yield at an estimated 5.3% looks sustainable. There is also the support of a significant net asset backing for the shares. For those seeking income, Centrica looks like a dividend stock to accumulate at these levels… Click Here To Read The Full Story Join the movement on social media: Copyright 2016 Master Investor Ltd, All rights reserved. You are receiving this email because you opted in at our website. If a Daily Bulletin is too frequent, why not opt in to our once weekly mailing list for a round up of the week's news straight to your inbox. Once Weekly Round-Up Our mailing address is: Suite 88, 22 Notting Hill Gate, London W11 3JE Master Investor is a trading name of Master Investor Limited. Material contained within Master Investor Magazine and its website is for general information purposes only and is not intended to be relied upon by individual readers in making (or refraining from making) any specific investment decisions. Master Investor Ltd does not accept any liability for any losses suffered by any user as a result of any such decision.

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