At some point, we will see the returns come back to bonds to compete with stocks. But it doesn't look like it's September or October of '97 for the moment. It looks like that's still a way's off. |
Everything seems to have turned bad for the stock market just in the last 18 hours. |
Greenspan has done a good job of morphing himself into the nation's chief economic officer and chief investment officer. He's been elevated to the status where we can't cut taxes unless Greenspan says we can cut them. |
I think the lower rates are going to help buoy the stock market in the face of the worries about Asia and all of the earnings misses that we seem to get everyday. |
If we were to see high wage numbers that have filtered through into higher PPI and CPI, the concerns would immediately go up that the Fed isn't going to more once or twice, but much more than that. And that would not be taken well by the markets. |
It was higher than expected and the [bond] market is not reacting well. |
It's about the stock market, not about the economy. |
It's all about the stock market right now. They are in sync with one another in that they're moving in the opposite direction from each other. |
It's just another way to play the stock market. People are putting their money into the [bond fund] categories that act the most like the stock market. |
It's not so much what bonds need to do. The focus is stocks and what that market does. Stocks need to re-introduce the element of risk and fall 10 percent off their highs to make bonds look good. |
No one has a feel for where the bottom is. The bond market is in a holding pattern waiting to see what the stock market does. |
Now that the GM strike is over, we should see a big rebound in industrial production numbers. |
Now that yields are moving up, all these reasons have been shoved aside, and order in the universe has been restored. |
One thing to understand about interest rates is that they're bad in both directions. Having rates at an extreme low is bad. By encouraging them to go further, the Fed only makes it worse. |
So this continues a pattern where the economic community seems to consistently underestimate the strength in the economy. |