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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (109964)	3/26/2010 2:10:48 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 116555

Doubt that pattern holds when stocks breaks When stocks break, would we not see a retreat into the USD and bonds, which are traditional "safe-havens"? Sell equities and buy debt.. Since both markets vy for investor dollars, selling in one generally creates buying in the other, right? This is where I find Fitzpatrick's analysis to be interesting. If we we're to see the 10 year cave into a reverse H&S formation, then yields can be expected to go much higher and money will flow out of bonds into equities. Yet, if the USD follows to the upside, that's normally bad for equities since exporters and commodities are now at a further disadvantage to foreign imports. So where do people run to? Some say gold.. Some say Commodities.. Others, like Prechtor, say just hold cash (and maybe UUP).. So, as you state, what will be at issue is when the USD decouples from rising yields on the 10 year. One other thing is that this is likely to crush the mortgage markets. Rising rates will make it even more difficult to find qualified borrowers who can pay a higher mortgage payment every month. Hawk

To: mishedlo who wrote (109964)	3/26/2010 2:51:41 PM
From: Broken_Clock	Respond to of 116555

Bill Gross: Bonds Will Only Get Uglier From Now on ... Can I Introduce You to My New Stock Funds? Posted Mar 26, 2010 11:59am EDT by Vincent Fernando, CFA From The Business Insider, March 26,2010: The Bond King is getting bearish on bonds, to the dismay of individual investors who poured nearly $90 billion into them last year. From here on out, the asset class will be in for a tough slog that will only get uglier and uglier: Bloomberg: Pacific Investment Management Co.’s Gross, manager of the world’s biggest bond fund, said yesterday in an interview with Tom Keene on Bloomberg Radio that “bonds have seen their best days.” Pimco, which announced in December that it would offer stock funds, is advising investors to buy the debt of countries such as Germany and Canada that have low deficits and higher- yielding corporate securities. The prospect of a strengthening U.S. economy and rising interest rates makes an “argument to not own as many” bonds, Gross said in the interview. His company Pimco, the top dog of bond investing, has even started to offer stock funds. That should say it all.