Buy and Sell Signals, and Other Market Perspectives Message Board

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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

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To: GROUND ZERO™ who wrote (53779)	8/19/2013 10:47:47 PM
From: robert b furman	2 Recommendations Recommended By GoodGord GROUND ZERO™ Read Replies (2) of 222153

QE taper is a good thing. The easing of QE will intentionally occur when the economy is showing signs of stability. It has been a long time for rates to be artificially low. An increase will cause a knee jerk reaction that with time will viewed as a positive event. QE sounds like a lot of money but on a total sale of the US governments bonds sales it does not amount to a percent of two. Tapering equals equilibrium. Higher rates will result only as growth accelerates. We are starting the rise just below 3% not 4% and certainly not 5%. QE taper more than likely started and will be acknowledged before Bernanke leaves office is my bet. It could be long very prosperous run up in rates if it rises slowly. A long period of historically low rates = prosperity. Real estate is turning nicely - slow and steady increases in valuations and no apparent inflation = good times. Note that financials have the highest correlation to the increase in rates as their loan margin expands as rates rise faster than their costs do. Watch financials and we'll see if rates rising result in the financials becoming leaders - note too tech has a high correlation. There is a lot of negative talk as the world slowly recovers. Bob

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