Why Stocks And Bonds Could Lose Another $20 Trillion
"[It's] rare to see both bonds and equities losing so much at the same time," SocGen's Andrew Lapthorne wrote, in a Monday note.
It was an understatement. Multi-asset portfolios aren't a monolith, but generally speaking, 2022 is shaping up to be one of the worst years in modern history for simple stock-bond strategies. If Lapthorne wanted to resort to hyperbole, no one would blame him.
"In 2021, investors (and the Fed) failed to see that stock and bond prices, sitting on opposite sides of the
Lately stocks and UST bonds are moving in opposite directions again. That is comforting to me at least. We shall see.
It is, indeed, a most ugly time. I don’t believe we have seen sufficiently broad capitulation. I don’t think the real money is dramatically hurting yet. And we still have ongoing, outstanding variables that can impose on market health and well-being. I’m worried about Covid lockdowns in China impacting the supply chain, and the ongoing impacts of oil supply interruption due to the war. Biden has done a great job of reconnecting the US with NATO and asserted our common purposes with the allies in support of Ukraine. But I’m not entirely confident about his ability to get his arms and his mind around economic issues. I reckon he sees it as a big mess that he was never able to figure out. I voted for Joe and I like what he wants to do. But I don’t like his execution. He needs a proper economic advisor.
Janet Yellen as Secretary of the Treasury is the only reason to have any confidence and hope imho…
I agree, John. Thank you for the thought.
Interestingly, Yellen was the chair in the council of economic advisors under Bill Clinton. Robert Rubin, who was Treasury Secretary, and Larry Summers later on, were highly visible scapegoats if the economy went south. But the economy did well in the 90s. I wonder to what extent Biden is prompting Yellen to speak up about policy on behalf of the administration.
Yellen’s knowledge and role are resources. She has a very capable and experienced voice in monetary policy. Someone does not know what they’re doing here.
Maybe we need to remember that a pandemic and now war are constraining the labor and commodities supplies.
Inflation and investor pain now are the result of the avoidance of a depression in 2020.
How could the executive branch tackle inflation besides attempting to put breaks in the economy by convincing the legislative branch to tax more and foster competition?
I think Putin and his band of troublemakers will be going flat out to get the Republicans and trump back in charge.
Imagine poor Ukraine if Trump and his band of misfits were in charge now
Horrible scenario…one thing is for sure Ukraine would be receiving minimal military aid if any at all.
Guaranteed a barrage of cyber attacks and other destabilizing activities is facing the US from Putin