Posted on 04/15/2024 5:40:50 PM PDT by SeekAndFind
The current scenario of rapidly-increasing valuations without a corresponding increase in profits is unsustainable. Now add in a series of reports that inflation isn't going away as planned, and the market has a problem.
Yields have responded in kind, rallying to more than 4.5% last week as demand for bonds cools and budget deficit-driven Treasury supply continues unabated. In late summer last year, the 10-year yield suddenly rose to 5% after Fitch downgraded the U.S. government's credit. At the time, I compared the effects of rising interest rates to a freight train approaching the U.S. and global economy. This story quieted down this winter with the idea of a Fed pause and likely pivot starting in late October. Now it's back, the Fed can't cut rates with stubborn inflation, and long-term yields are threatening to hit new cycle highs. This has profound implications for housing, autos, banks, tech, and the stock market/economy at large.
(Excerpt) Read more at seekingalpha.com ...
These buddies of yours... They are all millionaires, right?
Because if they're so smart...
Regards,
You really, really need to head over to Shadowstats Inflation Charts.
Real inflation rates were running in the 8% to 10% range a few months ago and are now higher.
Putting 2/3 of your money into 10 year T-bills at 6% just guarantees that you will lose to inflation.
If folks followed your advice the irony is that the interest rate paid by federal debt would just get higher and higher—at some point greed would overwhelm even the hardest of hard core libertarians and they would be standing in line to buy government debt.
;-)
P.S. The reason for this is that markets are ultimately cold equations of risk vs reward. If the reward gets way above the risk level investors will want in....
On the front end, watch for retail inventory movement back-log, as a consequence of consumers shutting down. (Essentials only)
As retail traffic stagnates, inventory orders cease, and items go either unordered or stay on the shelves unpurchased.
Symptoms, hourly essential employees with big chain retail having their hours cut back to bare minimum.
How BlackRock Conquered the World (Sep 19, 2023)
https://www.corbettreport.com/blackrock/
Nobody admits knowing this was coming. Imagine, a investment group running the NY Fed?
Larry Fink? Look at his track record. He started with a huge collapse and has replayed it several times.
Too big to fail?
Global is just TOO BIG!
Yeah, a slight bump in interest rates is FAR from a Black Swan event.
“Look at the institutions that have abandoned their core values just to defeat Trump; journalism, legal, education, and possibly banking. It’s astonishing, really.”
Dittos.
Instead of Making America Great Again, they’d rather burn it all down.
In the meantime, forcing a higher interest rate on government debt would increase the pressure on it to cut "spending" (really, just stealing and redistributing) and get its house in order. I really don't see an upside for non-leftists when it comes to avoiding government debt. Worst case it forces the government into default - in that case we can laugh at all the leftists who are the bagholders.
It is like the old joke.
A man offers a woman one million dollars to have sex with him.
She agrees.
Then he says: “Now that we have established what kind of women you are it is time to negotiate on the price.”
Virtue signaling is silly whether it is leftists or conservatives or libertarians.
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