Is anyone else watching the 30-year treasury? It's about to cross below 6%. That would be extraordinarily low, given the possibility, even the likelihood, of deliberate inflation to forestall a deflationary recession or at least to prevent a depression. There must be a continuing use of the bond as a safe refuge; if there are enough capital gains there could even be a short-lived admixture of hope as well as fear, pulling money out of stocks.
I think that maybe as soon as the stock market puts together four straight weeks of decline, mutual funds will start raising cash and those who didn't jump out already will shift towards cash. But the real cataract might not come along until as much as a year, after repeated failed rallies. Or so it has happened in the past. John Train thought the cycle from top to bottom to top was four or five years; with 10, 15, or even 23 years feeding this bull it could be much more protracted.
Maybe the bulls should read A. E. Housman:
Therefore, since the world has still
Much good, but much less good than ill,
And while the sun and moon endure
Luck's a chance, but trouble's sure . . . |
