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Dimon, Debt And Impossible Math
Jamie Dimon was in the news on Tuesday for the not-exactly-groundbreaking observation that Fed funds at 7% could be disruptive.
"Going from 0% to 2% was almost no increase. Going from 0% to 5% caught some people off guard, but no one would've taken 5% out of the realm of possibility," he told The Times of India while in Mumbai for a JPMorgan conference. "I'm not sure if the world is prepared for 7%."
With respect, I'm not sure that's newsworthy. Also, there were at least some people who "would
I’m only managing my own very modest resources, and neither my wife or I have children and are in our sixties, so don’t have to worry about leaving a legacy. So I’m a very little fish who is only concerned about our having enough funds to last the next 30 years or so. Until now I’ve been reluctant to buy duration, but today I put 20% of what we have in 5-10 years. I can’t lay claim to “fading the fed” because if interest rates continue significantly higher and stay there for a year I’ll be able to add more 5-10 yrs at that point, and the loss on today’s transactions, while never pleasant, won’t materially affect us going forward. I’m content knowing I’m going to be wrong a lot. I just hope not catastrophically so.
I love the second to last sentence. That’s the sign of superior thinking….