Buy and Sell Signals, and Other Market Perspectives Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

SPY 681.92

-0.7%

Dec 31 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: GROUND ZERO™ who wrote (112264)	10/11/2018 12:10:29 AM
From: robert b furman	1 Recommendation Recommended By GROUND ZERO™ Read Replies (1) of 220947

That's good. A big systemic bond problem is BIG. Who has counterparty risk? locks up banks transfers. Liquidity grinds to a stop. That's a bigger problem. Bonds spiking up because the Fed raises rates is a short term spike that settles back down -i.e. my recall of the last two 1/4 point raises did spike up rates. But there is so much money chasing yield that they clamor to lock in the new rate and a month later the rise is evaporated. So today is WWW and the MM want a discounted inventory - so I look at this drop with a jaundiced eye. Rates spiking with bond and equity losses are the claims to the drop. WE SEEE !! That is a highly uncorrelated event. My gut tells me bonds dropping with the rate increases is the real reason. Now if you can't sell your bonds (no bids) and you are scared - you sell what you ca is much bigger than the equity marketn and that's equities. Hi GZ, Since it seems bonds blew up first - I'm inclined to think that is the culprit. We have high valuations but every bond holder has been told that the 32 year bull market in bonds is rolling over. The bond market to me, spilling over into equities is not to be a surprise - but in the long run, if you own bonds - they're not safe. Investors who want safety, panic when losses occur and sell whatever has a bid. For the first half of today, the market was down an T was up 35 cents, - a harbinger for dividend investors and safety. By the end of the day it was down 65 cents. So bond selling was rotating into dividend aristocrats till the equity drop was over 400 points and fear groped both sectors. If systemic and things are kept quiet, trying to keep a lid on whatever the meltdown is - it will be much more serious. If it is the bonds causing fear - and inflation is tame - then with a lag equities will benefit. If you own bonds , make sure you are able to hold till maturity. To the degree they are maturing - there will be a huge flow of money to equities that have solid balance sheets and pay a good dividend. How equity prices behave going into the 19th will be most instructive. How gold trades will also be instructive. I'm just not a gold bug. Bob

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next