All the selling, the asset destruction, the bone-chillling worry about our “credit rating” is percieved to be over, done, finished with a raucous sell the rumor/buy the fact, one hour rally.
The FED’s helicopter came out and guaranteed that interest rates will “Go Japanese”. Few believed that interest rates would or could much lower, especially because of S&P, but now it is clear that we should all be ready for a 2.5% mortgage, if you qualify.
We have made back a perfect .68% of yesterday’s historic drop and the average stock ramped between 5-15%. It was wild day, traversing almost 1000 Dow points counting all the intra-day swings.
Even though prices are much lower than where we were two weeks ago, the fear of going to zero has come off the table. The Wall Street Complex wins again!
Just remember, equities reflect the true measure of a companies worth on a day to day basis! NOT
If you enjoy the content at iBankCoin, please follow us on Twitter
so we test 200d or are we off to the races?
question… with stocks much higher than the 2009 bottom, and bond yields now nearing ’09 bottom, isn’t that a significant divergence of sorts? And either bond yields are too low or stocks are too high?
Or does that just mean the additional liquidity that has been created has allowed the markets to support this kind of excess credit and leverage?
everything you ever read, lol, about yields being set to surge uncontrollably was founded in logic based on a total lack of understanding of modern monetary systems.
All we need for hte yield on US bonds to be 1% is for the fed to say they will buy until 1%. Thats it, and thats all. It doesn’t add money to the system (reduces the amount of dollars printed, actually, as interest payments create more dollars, and sending rates to zip will create less, not more, dollars. higher deficits will also create lower, not higher, rates. the bond market isn’t as retarded as the average stock blogger about economics and such).
the “chuck bennet” bottom is sensible. Who would buy a treasury for 2% when you could buy AT&T or VZ for a MULTIPLE OF THAT. For a week you may be right, in ten years… prolly not.
but gun to my head we are now in a bear market. I never quite understood the reason for the selloff, but bleier and reflection led me to agree its disgust with political leaders. Buy sensible political action (which is using their infinite fiat currency capabilities to stabilize and stimulate)…
We can end this in a day, or we can have a depression. Its all politics at this point, all politics. Set interest rates in europe and for the US States, done. Happy days.
Think about it. The US can print money, it has debt, deficits, no realistic chance of every reducing debt/gdp… rates are 2.1%. Any country that can’t make its own money, screwed.
Last time the US’s debt/GDP was this high, guess what? ITS INTEREST RATES WERE REALLY LOW. Everybody but the MMT guys has no idea how monetary systems and economies actually work.
Don’t think of it as an argument for bigger gov’t, think of it as an argument for lower taxes.