You’re wrong about rates. You keep saying that ‘everyone knows’ rates aren’t going higher; but that’s a bald faced lie!
Every single person that I know, sans Hugh Hendry, thinks rates are going higher. You can hear it for yourself on the television, where experts predict 200 basis point moves over the next two years. It seems that no one, mind you, is able to look at a balance sheet and acknowledge the fact that America will NEVER undergo austerity, in order to make the cuts necessary to service higher interest rate debt.
Argue all you want. But ZIRP is here forever.
Market roared higher, dragging bears from the back of speeding pick up trucks. But I saw something different in this run, different from past bull markets. Rate sensitive names, like REITs and Utes, pressed their rights higher too. So the stocks that I bought today, weren’t actually for today–but for tomorrow.
I believe the utes and REITs will hit new highs. I also believe the way the rails have been treated is disrespectful and discourteous to true ‘Rail Men’ like myself. I took a large stake in TRN, not because I felt bad for legacy shareholders, because it’s going higher.
FYI: Early Bird pricing for the FIRST EVER AND LAST EVER iBANKCOIN INVESTORS CONFERENCE ends Sunday. If you’ve been on the fence about coming, make up your mind son and take the dive already.
REMINDER: We are day 2 of a 5 day FREE TRIAL for The PPT.
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couldn’t agree more on rates/REITs, been adding for some time
Bohannon puffing on a meerschaum. That’s winship.
The new guy they brought in for hell on wheels is pretty good… blanking on his name, but the head marshall dude. love his raspy voice
The governor? I remember him as such the wimpy husband on The Medium. He’s trouble for sure, on the show..
The S&P500 will be making new all-time highs by the end of this year. Even blind men can see that the Fed will not allow rates to rise, or the USD to strengthen such that it becomes deflationary.
I’m a tail man, myself
btw fly – doesn’t this sell off remind you of the 2011 sept/oct sell off? huge reversal after getting crushed after multiple ppt O/S…. the price action has been very similar.
Not sure about that. My head is still spinning from this morning.
I am just interested to sell my TNA above $70 tomorrow.
You may be right, but God help us if there is another crisis because the fed will have no choice but to take interest rates negative…. And that opens all kinds of questions.
Would negative rates stimulate the domestic economy really? Why would banks lend and not simply invest internationally? Would borrowers really invest and spend domestically or would that just create the new carry trade where you borrow as many dollars as you can and get paid for it and buy the Aussie dollar or something and get paid for that? Wouldn’t that just accelerate the capital flow overseas? What happens when bond holders give up on reward free trade of buying treasuries, can interest rates be kept negative just because the fed wants it that way?
The aussie carry trade has been strong since QE, not new, but isn’t working anymore.
I am confident in one thing that supports no interest trade… that politicians will not put pressure and will not act themselves until there is a crisis. I can’t imagine that retirees and pension funds going broke won’t eventually be perceived as some kind of crisis at some point in the next 5 years, but there could be a “bigger crisis” of a bear market and credit crunch before then.
Who are we to argue with price. Risk on it is.
that logo, nice
Fly – I believe you mean a “balanced sheet,” as it were.
We are in a Costanza market.. whatever you think will happen.. do the opposite.
bull logo! haha. the logo changes by themselves have been cracking me up.
today was the trading cycle low. if the rally fails to go to new high or fails in 5 days or less then We are pretty much done here for awhile being long stocks. Good luck. enjoy the uptrend while you can.!
BlueStar – an honest, humble question: Are you long, or looking to get long anything here?
no
Dr. Fly, the iBC Bull Logo looks fantastic. http://s3.amazonaws.com/ibankcoin/img/logo-left-coin-final.png
Fly, Isn’t the Rails just an indirect Oil Play? If Oil fails, won’t Rails too cuz they can’t charge that much for “fuel charges” and their margins get caught. BTW, I can’t remember the silly word they use to describe those fuel charges..driving me crazy..what is it???
Surcharge
Don’t forget this is a global economy, and the US doesn’t control the world except commodities. The dollar went on a tear, lowering commodity prices for us in the USA, but raising them in other countries.
IMO, the risk in this market is with foreign markets that we do not control. If the Yen carry trade reverses, as it looks is possible right now, we are looking at a possible shock a-la 1998.
Fly, needed to say thanks since you posted the Lion and Zebra clip, I’ve closed out 1.5 seasons since then. Love it. The “pros” screaming for higher rates are as batshit crazy as Reverend Cole.
http://www.fidelity.com/bin-public/060_www_fidelity_com/images/Viewpoints/II/rate_outlook_chart1.jpg
Choose hate.
Actual rates came down in 2003 because of the Iraq and Afghanistan wars, and in 2009 because of the financial crisis.
I don’t think these graphs mean much.
Source: Rolling 5-Quarter Median Forecasts of 10-Year Note Yields in the Philadelphia Fed’s Quarterly Survey of Professional Forecasters: 2000-2014. I’m sure all the pundits calling for higher rates are more qualified for an opinion.
I just EXPLAINED to you the reasons for lower rates in 2003 and 2009. Are you to dense to grasp this?
Thank you for the EXPLANATION and look back in time. I’m merely siding with Fly saying ZIRP is here forever and follow the trend. Those playing the forecasting game should take a a dose of humility when experts consistently get it wrong . Are you TOO dense to grasp this?
Fly, here’s a link for those who’ve been getting whiplashed lately.
http://www.walgreens.com/store/c/neck-braces/ID=361201-tier3
This week, AHH THIS WEEK, has been simply amazing.
To wake up Monday Morning to “The Brazilian Miracle” to calling this reversal leading to the single best market day of the year, well lets just say me and the missus will be having 5-pounders this weekend. Served with only the finest, most rrrrrobust Cabernet….
I thought you went short… you’re one nimble MF doctor. A podiatrist who’s quick on his feet.
No no no…go back and check. I went 70% long to 40% long at the close yesterday (moved to cash). Today i went back to 70% long at the lows, and rode the reversal back up.
No way would i short an oversold market that i publicly called the reversal on.
I’m not fucking leaving!!!!