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Politics : The Donald Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (32064)	8/31/2019 7:16:23 PM
From: RetiredNow	Read Replies (1) \| Respond to of 74636

Agreed, this situation is really unique, but I believe it will end the same. The reason is fragility. We are more fragile than in 2007, because now it's not a mortgage credit bubble. It's an everything credit bubble, including sovereign debt and deficits. These bubbles may not all burst at once, but one of them will crack and burst and that will cause a chain reaction as counter-party risk metastasizes. This is going to be the hellish problem we will face this time around. All risk assets will be in trouble....stocks and bonds, even money market funds will see the "breaking of the buck" as they trade below $1 NAV. So my best advice for cheap insurance is load up on short dated treasuries with 3 months to 1 year or less duration. With the yield curve inversion, it's a damned good deal. You'll get a decent yield, while waiting for the madness to sort itself out. In addition, these are highly liquid, even in the worst of times, so you can use it as a cash equivalent and as dry powder to deploy to buy back into stocks or your favorite risk asset when they are trading cheaply in the future.