Most folks think it’s all about Syria at this point. I disagree; I think it’s all about interest rates. And the continued weakness of bonds, in the face of the completely-untapered $1 trillion per year purchases of bonds by Bernanke, spells disaster ahead for all asset classes.
Take a look at how interest-sensitive items have performed, such as 30 Year Treasury Bond Futures or the iShares S&P National AMT-Free Municipal Bond Index (MUB) a municipal bonds ETF, whose demise was predicted by the bejugged Meredith Whitney.
Cast your eyes as well on the iShares Barclays 20+ Year Treas Bond (TLT), which has been consistently clobbered for months on end. My once-loony target of $100 draws nigh, and I’ve got a feeling that may be simply a realized target and not a reversal point.
Simply started, if interest rates cut above the descending trendline I’ve drawn below, all holy hell is going to break loose. Because if Bernanke can’t beat interest rates down with his bottomless checkbook, then he has finally lost control of the market, and ruin will rain down upon his bald head. Thus speaks the Slope of Hope.
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Forget Syria...It's All About Interest Rates
Published 09/04/2013, 12:17 AM
Updated 07/09/2023, 06:31 AM
Forget Syria...It's All About Interest Rates
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