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Treasury yields fall along with stocks

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Comments (5)
  • bbro
    , contributor
    Comments (10526) | Send Message
     
    The 3.00% level has now been pushed out to March 2018...
    10 Apr 2014, 11:34 AM Reply Like
  • Grant Dossetto
    , contributor
    Comments (202) | Send Message
     
    Too many people were short at the end of the year. Provided kindling for a reversal in trend. That kindling could turn to jet fuel if it attracts so momentum traders and a hedge fund or two blow up.
    10 Apr 2014, 11:49 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11779) | Send Message
     
    It's weird looking at treasury yields and realizing that those yields turn into huge losses for overseas investors as the dollar continues to weaken despite the taper. A rising treasury and a weakening economy due to the higher rate tends to signal rising inflation in an economic downturn.

     

    Why is this bad? If the Federal Reserve lowers rates it further ignites inflationary pressure and if it raises rates it exacerbates the economic downturn. It is looking like the next economic cycle crest may be quite large and explains why the Federal reserve and government are so desperate to prevent it. the problem is, the longer they hold it off using extraordinary means the worse it will be and the less ammunition they will have to fight it. They already pretty much have no ammunition already.
    10 Apr 2014, 01:25 PM Reply Like
  • tstreet
    , contributor
    Comments (963) | Send Message
     
    We have already been here in the last few years, and it has not ignited inflation as the "bond vigilantes" predicted. Yes, we know that the FED has no ammunition left. And so do they. But what are they supposed to do with a congress that refuses to engage in any spending that would stimulate the economy. It is the economy that is coming back to bite us, not the FED. They have done the best they can given a bad hand. The FED does what they are supposed to do but people need to realize that monetary policy cannot solve all our problems.

     

    You blame the weakening economy on the FED and ignore all other factors. This is the result of our total reliance on the FED to bail us out. The FED can't force people to spend money they don't have.
    11 Apr 2014, 09:46 AM Reply Like
  • Barry North
    , contributor
    Comments (286) | Send Message
     
    Moon, great comment as usual. I agree that the Fed are in an invidious position. Pretty much from here, with the Fed having exhausted their main weapon, interest rate reduction, the "situation" will unravel in front of their eyes. They know it as well, which explains all the smooth talking going on.

     

    I fully agree with Marc Faber's comments on CNBC, a few days ago.

     

    "I believe that the market is slowly waking up to the fact that the Federal Reserve is a clueless organization. They have no idea what they're doing. And so the confidence level of investors is diminishing, in my view. This year, for sure - maybe from a higher diving board - the S&P will drop 20 per cent," Dr Faber said, before correcting himself. I think, rather, 30 per cent. Who knows? But all I'm saying is that it's not a very good time, right now, to buy stocks."
    11 Apr 2014, 05:11 AM Reply Like
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