What is the Future for the Global Financial Market?
https://www.bloomberg.com/view/articles/2016-09-02/a-storm-is-brewing-in-global-financial-markets
The world is in a shaky place according to A Gary Shilling. He says that Brexit just made the global financial markets even more unstable and goes on to list what we would expect to see if something like this happened but says that those things never actually happened. What has actually happened is that money has been put into bonds depressing their yields. Shilling also says that stocks may be a good place to invest in because the dividend yields on them are better than those on 10-year treasury bonds as shown in the graph on the article. The market may go into another turmoil after the current U.S. presidential election once Hillary Clinton is going to win because people are aware of what type of person she is, which may or may not be better than having Trump as president who is unpredictable as we cannot predict what he will do to our economy. Shilling believes that once a new president is in place the parties might come together and find a compromise for infrastructure spending because he says that the U.S is in dire need for improvements on infrastructure and fixes.
When choosing when to invest or deciding what to do in a time of economic crisis, investors have to weigh the pros and cons of each choice. In a way, investors play a game with each other. This is shown through when Shilling says that instead of increased demand for treasuries, falling commodity prices, etc., the treasuries yield has been constant meaning no one bought them, and that money has been poured into emerging market bonds. This can be shown in matrix where the two choices are the increased demand of treasuries, emerging market debt, etc. and the other choice is pouring money into emerging market bonds. If both players pick the same choice then it would negative affect both players because if both players picked the first choice there would be market debt and if both players picked to pour money into emerging market bonds which is what happened, the yields would depress meaning that people get less back from their investments. Shilling also brought up how once a new president is in place, the two parties might be able to come up with a plan for the U.S. spending. This is yet another game matrix because the two political parties each have their own ideas on how the money should be spent and by weighing the pros and cons of choosing one or the other, hopefully the two parties do come to a compromise. The whole financial market can be seen as just a big game and using concepts from game theory can help one become a wiser investor.