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A Doomed Cavalry Charge? Rates Rage On Wild Central Bank Easing Speculation

Now these are some "great expectations".

Now these are some "great expectations".
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7 comments on “A Doomed Cavalry Charge? Rates Rage On Wild Central Bank Easing Speculation

  1. Anymouse

    Keeping with the pseudo-Western theme, I think the Fed (and other central banks) have led us like cattle into a blind canyon with their artificial interest rates. Where would the Dow be if interest rates were at those of the past several hundred years (about 2.5-3% + inflation)? I wouldn’t loan the government money at 1.1% when their inflation target is 2%. We keep borrowing our walking around money even in what advertised as “the best economy ever”. I have low confidence in the current administrations ability to handle either crisis.

    Covefefe-45 looks at Covid-19 as a “marketing problem”. Hammer/Nail, I guess… I’m a believer in the stock market, I’ve been 100% stocks forever, but my own mortality is shaking my confidence. I hope I’m wrong on everything, but after 1987, 1999, 2008, I don’t want to get clipped again. I just hope we don’t start another world war to get out of it.

    Right now the S&P 500 is about where it was October of 2019. It’s still not that bad a time to sell if you’re unsure. At my age I may not live long enough to recover a 30-40% drop. The market’s had a great run and no one ever sells at the top or buys at the bottom. So you give back 10% on paper. The virus is still spreading and layoffs haven’t even started. I think this could be like a worldwide rolling 9/11. About 10% of world GDP is directly or indirectly related to travel and tourism. Clip a lot of that off world output and all I see is cascading layoffs. Plus the lockup of the Chinese supply chain? The election is the least of our problems.

    2-year, now .73%, Good Christ

    • 100 percent.

    • Exactly, I think a whole bunch of people looking to retire in the next few years are looking really hard at the gains since 2008 and the loss from the peak and thinking… yeah I may as well lock this up if I want to retire on my current schedule. The first ones out the door will get to do just that.

      • Anymouse

        OK, so Devil’s Advocate-ing here, what do the 10,000 people turning 65 daily do for yield? Spend the principal down, but save just enough for a bullet? Or just keep working as long as they can (or will be allowed to)?

        • The dollar and bonds have been rallying for the entirety of 2020. Anyone close to retirement age should have been able to offset a significant portion of their equity losses with gain in their fixed investments.

          As far as going forward, for the time being capital preservation is a great deal more important than chasing yield.

  2. All is for the best in this best of all possible worlds. Or is this just an exhilarating but doomed cavalry charge into a dead end?”

    References to Voltaire and “Charge of the light Brigade” in one quote. I’ve found bears tend to be well rounded literate people.

    Alas the bulls remind me of Ogre from “Revenge of the Nerds”, always shouting for “MORE BEER!”

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