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RIP Bank of America
why BAC?
http://finance.yahoo.com/q/bc?s=DB&t=6m&l=on&z=l&q=l&c=bac
Wall Streeters keep telling me Bank of America is going to 25 this year?
While inflation surges haha the fed has really fixed things good!
the stock and bond market rose together for 30 years, why does it seem so strange to you that it would do the same now?
Good point.
It's only because of the bond market super head fake in 2008. Where the bond market of an cratering economy rallied instead of selling off. Now people think that bonds rally when economies go to shit. Since when ?
Did Asia's bond markets rally in 1997 ? Nope
Did Russia's in 1998 ? Nope
Did Mexicos in the 80's ? Nope
Greece 2010 ? Nope
Argentina ? Nope
Any of those reserve currencies?
Japan, US in the great depression.
bonds become a substitute for cash, particularly for institutions. when economic growth is zero, anything close to 1% is king.
it also helps that the fed owns the bond market and ain't sellin
Yeah. And every time the Fed buys bonds, it emits liabilities (cash )
In central banking, cash is on the liability side of their balance sheet.
Umm the Pound Sterling was reserve currency. What happened there ?
And the Ruble had the mighty Soviet army behind it. How did that work...
Japan's internal credit bubble burst in the 80's. That didn't prevent it from continuing to be an export powerhouse. Which is no comparison to the us of a
Just like when wages tracked home prices for 50 years. It's only 50 years.
Insanity, the new steady state
Just like the splitting between the rich and poor.
Just when you think things can't get any more manipulated.
To allow any recoupling now means the death of the dollar and/or the Fed.
Hedge accordingly.
Because Someone is going to be dealt the short straw.
If Yellen says stocks are not in a bubble and Bullard says home prices are not in a bubble, you can bet anything that both are in a bubble.
That changed fast. All it took was a freudian FED slip of the tongue.
I'm not sure why people continue to be "baffled" by this trend. One of two markets is bullshitting. Equities vs Debt. You decide. One is incredibly deep and liquid (for the most part) and the other is orchestrated by bots. Couple of buyers - Fed and those investors who think S is about THTF and want safety of principle. CNBS and a host of others, including a lot of posters here, scratching their heads wondering why the TNX isn't at 3 and change. Fed buyer + surreptitious hedging = low yields = great opp to short debt.
The more bonds the fed buys, the more cash it is emitting to Wall Street. One market is equally as big of a sham as the other. This is why, at this stage, the US equity markets are beating emerging markets
Short debt. Hmm. My pseudonym is on the fence about that for four years now.
7y Auction could be interesting today