My own feeling is that Citi et al will gather all these CDOs and MBSs and whatever else, dump them all into a satellite, and convince NASA to blast them off into space on a secret mission at taxpayer expense where they’ll never be heard from again (yeah, right) Meanwhile, the rest of stock market reminds me of a planeload of passengers who’ve just been informed that the wings fell off. “Whew!” they all sigh in unison, now comfortable that they know what’s going on.
It should remind you of no such thing.
The bond markets are in the doldrums. In contrast, the stock markets are reasonably certain that the Fed is going to inflate assets at the expense of bonds (the perpetual title bout of boxing champions).
For the bond markets, foreign buyers have fled, domestic owners are selling, and the threat of inflation looms large if the Fed keeps cutting interest rates.
For the stock markets, foreign buyers have flocked to it, domestic owners are buying even more, asset prices on industrials are increasing, the Dollar is falling making U.S. exports cheaper while making imports into the U.S. more expensive, productivity is at an all time high, wages are at an all time high, taxes are low, and unemployment is near record low levels.
The article for this thread is about a potential bond bailout.
Bonds and stocks are often thought of as moving against each other (i.e. what's bad for one is good for the other).
Well, if things are bad for bonds, what do you suppose stock investors are thinking?!