Posted on 05/21/2018 4:25:37 AM PDT by cba123
Full title:
The market is doing something most investors have never seen in their lifetime — and could be foreshadowing the next crash
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Since 1981, Treasury yields have pretty much gone in just one direction: down.
The result has been one of the most awe-inspiring bull markets in the modern era — one spanning more than three decades.
But the party may be over for Treasury bulls, who profit from lower yields because of the inverse relationship they have with bond prices. This can be seen in the 10-year Treasury yield, which bounced off a record low in 2016 and has recently shown signs of a sustained move higher.
(please see link, for full article)
(Excerpt) Read more at msn.com ...
Just seems interesting, anyway.
Use your own judgement.
Go long. Go short. Buy bitcoins. Sell .
Or do nothing. :D
“The market” wasn’t really doing anything over the last 10-15 years. Treasury yields were so low because the U.S. government kept them artificially low. Any change you see now is just the start of “the market” returning — not returning to a norm — but returning to existence.
I agree entirely.
Tend to agree. The market is dithering now, uncertain where to turn. It has hardly been in bull territory for three decades though. That is just a silly remark by the writer.
Writers write, talkers talk. Whatever it takes to get attention and sell news.
The bull market was in Treasuries, not equities for the last 35 years. Yes, long dormant interest rate risk is a concern for bond holders. Yields of the last handful of years were so low that relatively small increase of interest rates for those bonds could hurt the bond holder badly. Remember that the Fed only sets short term rates. The market sets the interest rates for debt of a year or longer maturities.
IMHO this will have almost no bad effects on the equities markets. 3% or 3.5% on a 10 year Treasury isn’t going to entice anyone away from stocks and the interest rate risk will likely push them toward stocks. Any nonsense you hear about an inverted yield curve foreshadowing a recession in 2018 or 2019 is ridiculous.
I agree. Like an addict going through withdrawal, there may be symptoms.
Of course, we can count on the drug dealers (Leftists) to insist we begin taking heroin again (return to all-government-all-the-time) and all will be good, which is certainly what they are going to do.
While I agree with the feedback here, I also do see the author’s side as well.
Rates have been falling, continuously, since 1985. Continuously. Falling. Falling again. Falling. Now for a generation and a half.
During that same time America has likewise, been shedding industry after industry, to low-wage countries, more every single year.
I for one, am of the opinion that Trump is (much) more likely to demand that these trends end, and America needs (badly, in fact) to start building up our own manufacturing base once again.
I know, I am not in the majority in this view. But I was thinking that Trump was exactly what America needed, way back when.
I tend to think he might just be quite aggressive with China. He is being a gentleman now, but China really needs to stop their massive cheating, and they really, really need to start cooperating.
I have not seen that, during the last generation and a half. I have just seen everyone, in both political parties selling out America.
It is time to build up America once again.
That seems to also be Trump’s position.
That buildup, will not continue the current economic situation.
It will likely dramatically change them.
How exactly, I don’t know. But I have an idea.
I would not bet against things changing.
Maybe soon.
For most/all of O’bastard’s term of office the market just laid there like a dead fish. Now Trump has brought it back to life.
The market has largely been in a bull market since 1981. Since January 1981, the market with dividends reinvested has returned over 5,000%.
Interest rates were down so much during Odumbass’s term that there was even talk of NEGATIVE interest rates at one point.
Am I the only one who remembers that?
Low interest rates are good- but there is such a think as too low- which is what you do in an unhealthy economy.
All should read the Vampire Economy. It very much explains a stock market under socialist government. The issue is, are we moving away from a socialist government?
And yes, we have a socialist government....................
THE Berlin Stock Exchange still exists—as a building, as an institution with large offices, with brokers and bankers, with a huge organization for daily announcement of stock and bond quotations. But it is only a pale imitation of its former self and of what a stock exchange is supposed to be. For the Stock Exchange cannot function if and when the State regulates the flow of capital and destroys the confidence of investors in the sanctity of their property rights.
Compounded annually? Without those terms the figure is nearly meaningless.
11.5% CAGR since Jan 1981 with dividends re-invested. That is a huge bull market and well above the long term average of ~9%, which includes the ~40 years at the higher CAGR in the average.
Yes, it is true for such a long period and justifies the position of being an investor which I continue to be. There have been ten year periods though that have just not been very fruitful yet the market returns to the mean repeatedly and as it is now which is why I have not had concerns about the dow reaching current levels or higher and not surprised when it corrects. I still hold to 8% ish for long term hopes but lower for plans.
Correlation isn’t causation with rates and manufacturing. I believe lower taxes and less regulation relates the environment where our economy can grow. MAGA!
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