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Trader: ‘Cash Is Not Nearly As Attractive As Bearish Pundits Make It Sound’
By Kevin Muir of “The Macro Tourist” fame; reposted here with permission
The other day I was
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Fascinating to see PMs taken behind the wood-shed with real rates still negative.
Each successive peak and trough when you look at interest rates has been lower than the one which preceded it.
It’s pretty interesting to me that the FF-Taylor spread barely went positive at the end of the last expansion! Yet, people talk about the fed “murdering” that cycle, and the economy (U.S. and global) is structurally much weaker now. Debt, demographics, and inequality are going to have a stranglehold on monetary velocity until something drastic changes. If there were ever a time for real rates to fail to go positive, this is it. And with Netflix trading at $380, I’d say “the market believes” the rocket ship is still heading higher. Sure, there are bearish voices out there, but to say the consensus is bearish seems a pretty big stretch.
H, any idea if Kevin reads the comments when you post his stuff on your site?