A possible fly in the ointment
#1
Posted 20 April 2007 - 10:41 AM
Possibly.
Long term interest rates are in a very suspect spot. If they break out upwards out of this triangle, the whole new bull market in yield may have begun.
Mountains of debt will start coming home to roost.
#2
Posted 20 April 2007 - 11:01 AM
#3
Posted 20 April 2007 - 11:18 AM
Speak of the devil:The problem of "Mountains of debt" will be solved by The FED and US Treasury building bigger mountains of debt. This is not even a discussion any more. That is the fact of finance. Buy every pull back in stocks.
Denleo
Operation Date: 04/20/2007
Operation Type: Outright Coupon Purchase
Release Time: 10:34 AM
Close Time: 11:00 AM
Settlement Date: 04/23/2007
Maturity/Call Date Range: 05/31/2008 - 01/15/2009
Total Par Amt Accepted (mlns) : $1,879
Total Par Amt Submitted (mlns) : $12,873
#4
Posted 20 April 2007 - 11:53 AM
The problem of "Mountains of debt" will be solved by The FED and US Treasury building bigger mountains of debt. This is not even a discussion any more. That is the fact of finance. Buy every pull back in stocks.
Denleo
Here is the problem with that.
The mountains of debt are being bought by foreigners, who are in a precarious position, holding this low yeilding paper denominated in detiriorating currency. the US dollar.
As China and Asia get economicaly stronger, the standing of the US dollar will keep declining toghether with its value. The potential buyers of the new mountain of debt may start demanding higher interest for their efforts to offset the risk or erroding dollar. I wouldn't be surprized if the combination of falling dollar and new debt issuance will be the base of the new bull market in yields.
Now as for stocks, its hard to say how they will react to rising interest rates. Though historicaly rising interest rates weren't a good environment for stocks.
Edited by ogm, 20 April 2007 - 11:57 AM.
#5
Posted 20 April 2007 - 12:01 PM
The problem of "Mountains of debt" will be solved by The FED and US Treasury building bigger mountains of debt. This is not even a discussion any more. That is the fact of finance. Buy every pull back in stocks.
Denleo
Here is the problem with that.
The mountains of debt are being bought by foreigners, who are in a precarious position, holding this low yeilding paper denominated in detiriorating currency. the US dollar.
As China and Asia get economicaly stronger, the standing of the US dollar will keep declining toghether with its value. The potential buyers of the new mountain of debt may start demanding higher interest for their efforts to offset the risk or erroding dollar. I wouldn't be surprized if the combination of falling dollar and new debt issuance will be the base of the new bull market in yields.
Now as for stocks, its hard to say how they will react to rising interest rates. Though historicaly rising interest rates weren't a good environment for stocks.
Here's the deal...the entire world is on a FIAT currency system. If the dollar, the currency which most goods and resources are traded in, depreciates----it gives those nations (China, Russia, Japan, S Korea, India, etc) holding the dollar a license to print more of their own currency as their economy will grow without excessive inflaitonary pressures. The more dollars/weaker the dollar the more potential for runaway world growth.
There's plenty of money out there. Buy the weekly charts of stuff that's supportive of world growth. They are flat out working.
#6
Posted 20 April 2007 - 12:11 PM
weak USD pro-con
http://www.chicagofe...weak_dollar.cfm
CRB trading below trendline support.
http://stockcharts.com/c-sc/sc?s=$CRB&p=D&yr=0&mn=11&dy=0&i=p38583385896&a=90444715&r=324.png
Edited by Trend-Signals, 20 April 2007 - 12:11 PM.
#7
Posted 20 April 2007 - 12:17 PM
#8
Posted 20 April 2007 - 12:57 PM