tag:blogger.com,1999:blog-12333088.post437209293567627351..comments2023-11-10T05:07:19.026-05:00Comments on Carl Futia: The bond marketCarl Futiahttp://www.blogger.com/profile/01624989905417650273noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-12333088.post-70070868933198295472009-05-28T16:16:53.383-04:002009-05-28T16:16:53.383-04:00Hi Carl,
An excellent presentation, thanks for sh...Hi Carl,<br /><br />An excellent presentation, thanks for sharing your insights. I hope you're right about the outcome of our economy.<br /><br />Well, every time the market gets close to my model's sell signal, the market rallies. Until then, the model is long and pointing higher. If we can clear the immediate overhead resistance, then we should have smooth sailing to much higher levels. On the other hand, if we get a sell signal before we clear the overhead resistance, then we're still looking at a dead cat bounce. This overhead hurdle is the 200 DMA for the major indices.<br /><br />I'm also long China, Russia, and India, these three markets are all stronger than the SP's. I'm also heavily long the gold and lightly long the crude oil. I believe a healthy recovery will keep these markets moving higher along with stocks.<br /><br />Thanks.<br /><br />Kindest regards,<br /><br />PMPMhttps://www.blogger.com/profile/00075052726630126469noreply@blogger.comtag:blogger.com,1999:blog-12333088.post-83414427004587934142009-05-28T15:28:01.279-04:002009-05-28T15:28:01.279-04:00Inflation will destroy savers. Without (true) savi...Inflation will destroy savers. Without (true) savings there can't be genuine credit nor genuine investment. Without (true) investment there canĀ“t be real growth.<br /><br />Savings can not be printed.<br /><br />The interest rates go up because there are not savers that can finance deficits.<br /><br />(I apologize for my horrid english)Unknownhttps://www.blogger.com/profile/00540179936858930055noreply@blogger.comtag:blogger.com,1999:blog-12333088.post-92107065138954058962009-05-28T14:39:06.123-04:002009-05-28T14:39:06.123-04:00Completely and 100% correct.Completely and 100% correct.Henry Beehttps://www.blogger.com/profile/12176365362835822750noreply@blogger.comtag:blogger.com,1999:blog-12333088.post-53913586907631496132009-05-28T13:09:27.964-04:002009-05-28T13:09:27.964-04:00Outstanding post on Bonds. You're best ever!!Outstanding post on Bonds. You're best ever!!Kenhttps://www.blogger.com/profile/11752355250564623497noreply@blogger.comtag:blogger.com,1999:blog-12333088.post-26105798620252430552009-05-28T12:41:22.575-04:002009-05-28T12:41:22.575-04:00The overwhelming macroeconomic event of the last 2...The overwhelming macroeconomic event of the last 20 years is the American consumer's affinity for debt-financed expenditures.<br /><br />Rising yields = higher debt servicing costs for individuals. If we entered this phase with healthy personal savings rates and balance sheets, I would agree that rising yields portend risk appetite and optimism.<br /><br />Is it possible that rising yields are actual evidence of risk AVERSION by debt purchasers--that they are now factoring in a here-to-fore unthought of risk of U.S. dollar dilution risk?<br /><br />Throw this on top of an American consumer that is still trying to service last decade's debt, and I don't smile when I think of a steepening yield curve.<br /><br />But that's why there's a market! Thank you for this excellent weblog.Steve Fosterhttps://www.blogger.com/profile/16254349775381836977noreply@blogger.comtag:blogger.com,1999:blog-12333088.post-67559208365721394512009-05-28T12:09:59.090-04:002009-05-28T12:09:59.090-04:00Carl-
thank you as always for your terrific blog a...Carl-<br />thank you as always for your terrific blog and creative thought process. I have a question on your last paragraph: wouldn't rising yields ultimately bring certain asset prices down? As people demand higher rates of return, they will pay less for those very assets. Granted as you say that inflation brings with it economic growth and higher asset prices but could this be offset by a demand for higher yields?<br /><br />thanksAnonymoushttps://www.blogger.com/profile/12925302559802410320noreply@blogger.comtag:blogger.com,1999:blog-12333088.post-53343123545558483012009-05-28T11:50:18.997-04:002009-05-28T11:50:18.997-04:00The worry is the timing of rising yields/mortgage ...The worry is the timing of rising yields/mortgage rates, and the relationship between mortgage defaults and foreclosures and the not-yet-unwound mortgage-tied derivatives bubble. The default rate is not expected to peak until late in 2009, and the reset on variable rate mortgages is not expected to peak until sometime in 2010. With higher mortgage rates those estimated peaks get pushed forward.<br /><br />The banks don't become "profitable" until the real estate market has bottomed because they are still holding trillions of $s of mortgage backed securities that become increasingly toxic as defaults and foreclosures increase.<br /><br />These issues are being addressed by the "bad bank" solution, but I have not read anywhere that this is a sure path to the rosy recovery that your interpretation of rising yields spells.<br /><br />Many respected economists believe that the bad bank solution is a bad solution. <br /><br />And it's hard to imagine that RE has bottomed in the context of rising defaults and rising mortgage rates.pursuitisthttps://www.blogger.com/profile/12295890175859740828noreply@blogger.comtag:blogger.com,1999:blog-12333088.post-82934105650306250872009-05-28T11:50:09.640-04:002009-05-28T11:50:09.640-04:00Well Carl,
Point is each medication has side effe...Well Carl,<br /><br />Point is each medication has side effects.<br /><br />If i had trillions of dollars in debt and a growing deficit, i wouldn't be so happy to see rising yields.<br /><br />Nice for the banks, i agree.<br /><br /><br />But what about the people. Rising rates will rise mortgage rates, inflation will hit hard...<br /><br />printing money has never been a sustainable way to get out of problems...long term it will put even more presure on bonds, and yields will be out of control...<br /><br />And there no easy way back once you go that way...<br /><br />Love you optimism thoughBalsamohttps://www.blogger.com/profile/18410662590230195856noreply@blogger.comtag:blogger.com,1999:blog-12333088.post-84718031438153784552009-05-28T11:49:34.427-04:002009-05-28T11:49:34.427-04:00Great post, Carl. With all the doom and gloom tha...Great post, Carl. With all the doom and gloom that's out there, it's refreshing to read this kind of outlook!pimaCanyonhttps://www.blogger.com/profile/09477196225992507658noreply@blogger.com