HYEM and GLD, Two Ultimate Asset Bubbles.
To be classified as an 'ultimate' bubble more buyers than sellers need to appear each day favoring both a hotter or colder market.
Gold to some is an inflation loving asset and to other a deflationary loving one. So any day one of these two winds will blow and if the buyers favoring the wind of the day out number the sellers the asset goes up.
HYEM is the same, if good news hits the market, it goes up on brighter prospects of repayment, but if bad news hits and T-bonds fall, the junk rallies on the decline in the T-bond yield!
Heads I win and tails you lose!
So what happens to 'ultimate bubbles' well they pop like all the others and offer a wonderful return on the short side...IF timed right.
