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HomeHoisington: The Case for Lower Long Term Rates
Posted by Larry Doyle on July 24th, 2013 7:08 AM |
When the herd on Wall Street is moving to one side of the boat, I am inclined to start thinking about moving to the other. Or at the bare minimum, I want to consider getting to the middle.
I make that point as many strategists and Wall Street savants are playing the momentum card and recommending that people overweight equities and underweight bonds because rates are assuredly headed higher.
The vicious sell off in bonds over the last two months on the heels of Fed chair Bernanke’s comments about tapering is clear cut evidence that the savants are right and that rates will continue their move higher, correct? (more…)
What Market Forces Are Driving Long Rates Higher?
Posted by Larry Doyle on June 24th, 2013 8:05 AM |
With global markets currently palpitating in a fashion all too similar to those living on the Bowery and beginning a withdrawal program, I think it is overly simplistic to say that Bernanke’s remarks alone are forcing ‘everybody out of the pool.’
What are the underlying forces at work in causing such a sharp move higher in long term rates the last 7 weeks?
While the rate on the 2 yr Treasury has moved higher by a not insignificant .2% during this time frame, the 10 year rate has moved higher by close to a full percentage point. Let’s navigate . . . but before addressing the forces at work, how about a cautionary comment as a preface. (more…)
The Reflation Bill Is Outstanding and Growing
Posted by Larry Doyle on April 5th, 2010 11:13 AM |
If we are to believe the markets are predicting a rebound in the economy (I do not blindly accept that to be the case), then it is high time we address the next enormous question facing our country. That is? The bill that has been accruing for the ‘so-called’ saving of our economy.
Whether the economy has been saved or not is a relative question. Please be careful as to how to use that phrase in light of the fact that there are 6.5 million people out of work now for at least 27 weeks (long term unemployed) and close to 17% of our labor force is underemployed.
The biggest question facing our country now is how do we pay for cleaning up this mess that was created over the last number of years? (more…)
Why Would China and Japan Stop Buying Our Debt?
Posted by Larry Doyle on February 17th, 2010 12:19 PM |
Our wizards in Washington should not be so naive to think foreign buyers, especially from Asia, will continue to finance our debt at current rates and at current levels. News yesterday that China is no longer the largest holder of our Treasury debt should not be discounted.
What are the ramifications for our nation if China and other foreign buyers decline to purchase our debt or – even worse – actually start selling even more of their current holdings? A quick and violent move higher in our domestic interest rates.
Don’t think it could happen? Think again. (more…)
