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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (32902)	11/30/2008 5:31:23 PM
From: Spekulatius	1 Recommendation Read Replies (2) of 78764

E_K_S Could the bond market offering such high yields be discounting for a much weaker dollar in the long term? Long term debit with yields much higher than the historical "normal" rate of return is the markets way of pricing in more risk, more potential defaults or perhaps a much weaker $US dollar in the future . The assumption of a US$ weakness would affect other LT debt categories as well, for example LT treasuries. This is apparently not the case - it's the spread of commercial mortgage rates over the treasury yield that is at all time high. This points to a specific problem with commercial RE not a problem with the US$ value.

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