Eric Parnell's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/403065/comments http://seekingalpha.com/article/1507192/comments?source=feed#comment-20128542 20128542
Thanks for your comment and for sharing your perspectives. Thanks also for the link to your TRENDLines site. I look forward to exploring the content on your website in more detail.

Thanks again.]]> Tue, 18 Jun 2013 23:47:15 -0400
Thanks for your comment and for sharing your perspectives. Thanks also for the link to your TRENDLines site. I look forward to exploring the content on your website in more detail.

Thanks again.]]> http://seekingalpha.com/article/1507192/comments?source=feed#comment-20128412 20128412
Thanks for your comment and excellent points as usual. I particularly agree with your point about the dilemma the Fed faces when it comes time to actually sell these securities. This is where the experiment becomes particularly complicated.

Excellent points. Thanks again.]]> Tue, 18 Jun 2013 23:45:25 -0400
Thanks for your comment and excellent points as usual. I particularly agree with your point about the dilemma the Fed faces when it comes time to actually sell these securities. This is where the experiment becomes particularly complicated.

Excellent points. Thanks again.]]> http://seekingalpha.com/article/1507192/comments?source=feed#comment-20128272 20128272 Tue, 18 Jun 2013 23:43:18 -0400 http://seekingalpha.com/article/1507192/comments?source=feed#comment-20128262 20128262
Thanks as always for your comments. And the discussions going on in your Instablog right now are outstanding. I'm just returning here now after having made a few comments over there.

And congratulations - since this afternoon you are now ranked #5 in the instablog rankings. Well deserved, as you've done a great job in driving and moderating the discussion.

Thanks again.]]> Tue, 18 Jun 2013 23:42:57 -0400
Thanks as always for your comments. And the discussions going on in your Instablog right now are outstanding. I'm just returning here now after having made a few comments over there.

And congratulations - since this afternoon you are now ranked #5 in the instablog rankings. Well deserved, as you've done a great job in driving and moderating the discussion.

Thanks again.]]> http://seekingalpha.com/article/1507192/comments?source=feed#comment-20128142 20128142
Thanks for your comment. A hold on any tapering would not surprise me at all tomorrow for the reasons that you've indicated. And I also agree with you on the consequences of these ongoing monetary actions, particularly once Japan joined in on the activity, as the fallout effects are likely to extend well into the future.

Great points. Thanks again.]]> Tue, 18 Jun 2013 23:41:03 -0400
Thanks for your comment. A hold on any tapering would not surprise me at all tomorrow for the reasons that you've indicated. And I also agree with you on the consequences of these ongoing monetary actions, particularly once Japan joined in on the activity, as the fallout effects are likely to extend well into the future.

Great points. Thanks again.]]> http://seekingalpha.com/article/1507192/comments?source=feed#comment-20128082 20128082
Thanks for your comment. I am also slightly down on TLT, as the position was established in early April prior to the overlooked April rally in bonds (everyone in the media talks about the May/June rise in interest rates but always overlooks the comparable March/April fall in interest rates).

As for the outlook on TLT, jhooper does an outstanding job as usual laying out the near-term and long-term risks for the asset class.

Thanks again]]> Tue, 18 Jun 2013 23:38:54 -0400
Thanks for your comment. I am also slightly down on TLT, as the position was established in early April prior to the overlooked April rally in bonds (everyone in the media talks about the May/June rise in interest rates but always overlooks the comparable March/April fall in interest rates).

As for the outlook on TLT, jhooper does an outstanding job as usual laying out the near-term and long-term risks for the asset class.

Thanks again]]> http://seekingalpha.com/instablog/5038891-interesting-times/1959832-interesting-times-for-all-commodities-and-investments-chapter-10?source=feed#comment-20127942 20127942
Here is my take on tomorrow. But instead of crunching the numbers, I'm just going to go with my gut here.

The Fed announces tapering and discusses it in its press conference tomorrow afternoon. But instead of falling, stocks actually rally on the news while bonds remain steady and PMs sell off. This initial reaction will give the sense that the Fed will actually be able to pull off tapering and the market will be OK with it. But after trading higher for a few days after the Fed meeting (perhaps as long as Monday or even through the end of the quarter), stocks suddenly run out of gas and roll over into what will be a more sustained correction while bonds start to rally and PMs catch a bid including gold and silver finally breaking out above their downward sloping 20-day moving averages. Perhaps this will all be wrong come tomorrow, but this is where my gut is heading into the overnight.

Thanks again IT. Great instablog discussion! ]]> Tue, 18 Jun 2013 23:31:53 -0400
Here is my take on tomorrow. But instead of crunching the numbers, I'm just going to go with my gut here.

The Fed announces tapering and discusses it in its press conference tomorrow afternoon. But instead of falling, stocks actually rally on the news while bonds remain steady and PMs sell off. This initial reaction will give the sense that the Fed will actually be able to pull off tapering and the market will be OK with it. But after trading higher for a few days after the Fed meeting (perhaps as long as Monday or even through the end of the quarter), stocks suddenly run out of gas and roll over into what will be a more sustained correction while bonds start to rally and PMs catch a bid including gold and silver finally breaking out above their downward sloping 20-day moving averages. Perhaps this will all be wrong come tomorrow, but this is where my gut is heading into the overnight.

Thanks again IT. Great instablog discussion! ]]> http://seekingalpha.com/instablog/5038891-interesting-times/1959832-interesting-times-for-all-commodities-and-investments-chapter-10?source=feed#comment-20127822 20127822
Thanks for your reply. You make a number of excellent points that you argue very well. And I completely agree that interest rates will be heading higher from current levels at some point in the future. I'm still not sure myself if now is the time that it is going to happen or if it is more likely to come at a later date. At present, I continue to believe that it will come later, but perhaps I will be wrong.

To your points about where interest rates would be today without Fed intervention, here are some of the additional points that I consider. First, 10-year Treasury yields had fallen as far as 2.04% in December 2008, which was before the Fed had launched QE (they had initiated MBS purchases in November but they did not begin to settle until January 2009). This, of course, was an extreme crisis period, but it implied genuine concerns about a deflationary outcome. This leads to the second point, which is if the Fed is truly fighting a deflationary battle, it would imply that U.S. Treasury yields would be far lower than they might otherwise be under conditions of price stability or inflation, and that interest rates could actually be lower than they are now if the Fed had not intervened along the way since deflationary pressures would have been allowed to fully take hold. Lastly, from the late 1800s up until 1966, average long-term interest rates consistently moved in a range between 2% and 5%. It was not until the late 1960s and the inflationary 1970s following the collapse of Bretton Woods and all of the other monetary policy actions during the time that long-term interest rates moved decisively above this range. And it wasn't until 1998 that we first returned to this range and have remained in it for the 15 years since. I'm not saying this is the case, but is it possible that the 22 year period from 1966 to 1998 when long-term interest rates ranged from 5% to 15% was the anomaly and that the cumulative +100 year period otherwise when interest rates ranged between 2% and 5% is actually a return to the long-term normal. Once again, I'm not suggesting this is actually the case, but it is something that I am exploring in the context of the broader interest rate discussion.

Thanks again for your excellent response. You make a number of outstanding points and I look forward to following your blog discussions going forward.]]> Tue, 18 Jun 2013 23:24:08 -0400
Thanks for your reply. You make a number of excellent points that you argue very well. And I completely agree that interest rates will be heading higher from current levels at some point in the future. I'm still not sure myself if now is the time that it is going to happen or if it is more likely to come at a later date. At present, I continue to believe that it will come later, but perhaps I will be wrong.

To your points about where interest rates would be today without Fed intervention, here are some of the additional points that I consider. First, 10-year Treasury yields had fallen as far as 2.04% in December 2008, which was before the Fed had launched QE (they had initiated MBS purchases in November but they did not begin to settle until January 2009). This, of course, was an extreme crisis period, but it implied genuine concerns about a deflationary outcome. This leads to the second point, which is if the Fed is truly fighting a deflationary battle, it would imply that U.S. Treasury yields would be far lower than they might otherwise be under conditions of price stability or inflation, and that interest rates could actually be lower than they are now if the Fed had not intervened along the way since deflationary pressures would have been allowed to fully take hold. Lastly, from the late 1800s up until 1966, average long-term interest rates consistently moved in a range between 2% and 5%. It was not until the late 1960s and the inflationary 1970s following the collapse of Bretton Woods and all of the other monetary policy actions during the time that long-term interest rates moved decisively above this range. And it wasn't until 1998 that we first returned to this range and have remained in it for the 15 years since. I'm not saying this is the case, but is it possible that the 22 year period from 1966 to 1998 when long-term interest rates ranged from 5% to 15% was the anomaly and that the cumulative +100 year period otherwise when interest rates ranged between 2% and 5% is actually a return to the long-term normal. Once again, I'm not suggesting this is actually the case, but it is something that I am exploring in the context of the broader interest rate discussion.

Thanks again for your excellent response. You make a number of outstanding points and I look forward to following your blog discussions going forward.]]> http://seekingalpha.com/instablog/5038891-interesting-times/1959832-interesting-times-for-all-commodities-and-investments-chapter-10?source=feed#comment-20096852 20096852
Thanks for sharing this information from TCW. This is excellent material.

I think it's worthwhile to add a few points to the widespread discussion about the end of QE and how it is likely to impact fixed income markets, as I believe a few key points get missed by analysts. First, when the Fed decides to scale back on Treasury purchases, the assumption that is almost always implied in these discussions is that all else will be held equal. Put simply, the Fed is going to stop buying $45 billion in Treasuries each month and no other market forces are going to adjust or react to this change in the marketplace. But this is never the case, as the entire market ecosystem is impacted. And in recent years, this has included institutions exiting risk assets and unwinding long stock positions that they were taking on by leveraging up the proceeds from the Treasury purchases by the Fed. The cash proceeds from this stock unwind has typically found its way back into safe haven Treasuries at an amount that has been vastly greater than the reduction in Fed purchases, leading to lower Treasury rates during QE off periods instead of higher.

Second, a reduction in the net addition of Treasury purchases or the elimination of additional Treasury purchases by the Fed is much different than the actual sale of Treasuries by the Fed. As long as the Fed is sitting on the supply and not actively adding supply to be sold into the market, the impact on interest rates is notably different and likely negligible as a result. This is one of the key differences between today and the comparisons to the 1994 scenario.

Lastly, the association with recently rising interest rates and the potential tapering of QE is misplaced, as the trigger that started interest rates to rise is not correlated at all with the discussions around Fed tapering the way it is for the stock market. Instead, all signs suggest the recent rise in interest rates has far more to do with the increase in implied volatility in the Japanese bond market, particularly since early May when JGB bond rates spiked higher.

I'm not saying with all of these points that we won't eventually arrive at a juncture where interest rates are heading higher due to Fed policy, but a number of signs suggest that this is not what is happening right now. Then again, perhaps I am wrong. It will be interesting to see.

Thanks again for sharing these articles. They were excellent reading.]]> Tue, 18 Jun 2013 10:19:58 -0400
Thanks for sharing this information from TCW. This is excellent material.

I think it's worthwhile to add a few points to the widespread discussion about the end of QE and how it is likely to impact fixed income markets, as I believe a few key points get missed by analysts. First, when the Fed decides to scale back on Treasury purchases, the assumption that is almost always implied in these discussions is that all else will be held equal. Put simply, the Fed is going to stop buying $45 billion in Treasuries each month and no other market forces are going to adjust or react to this change in the marketplace. But this is never the case, as the entire market ecosystem is impacted. And in recent years, this has included institutions exiting risk assets and unwinding long stock positions that they were taking on by leveraging up the proceeds from the Treasury purchases by the Fed. The cash proceeds from this stock unwind has typically found its way back into safe haven Treasuries at an amount that has been vastly greater than the reduction in Fed purchases, leading to lower Treasury rates during QE off periods instead of higher.

Second, a reduction in the net addition of Treasury purchases or the elimination of additional Treasury purchases by the Fed is much different than the actual sale of Treasuries by the Fed. As long as the Fed is sitting on the supply and not actively adding supply to be sold into the market, the impact on interest rates is notably different and likely negligible as a result. This is one of the key differences between today and the comparisons to the 1994 scenario.

Lastly, the association with recently rising interest rates and the potential tapering of QE is misplaced, as the trigger that started interest rates to rise is not correlated at all with the discussions around Fed tapering the way it is for the stock market. Instead, all signs suggest the recent rise in interest rates has far more to do with the increase in implied volatility in the Japanese bond market, particularly since early May when JGB bond rates spiked higher.

I'm not saying with all of these points that we won't eventually arrive at a juncture where interest rates are heading higher due to Fed policy, but a number of signs suggest that this is not what is happening right now. Then again, perhaps I am wrong. It will be interesting to see.

Thanks again for sharing these articles. They were excellent reading.]]> http://seekingalpha.com/instablog/5038891-interesting-times/1959832-interesting-times-for-all-commodities-and-investments-chapter-10?source=feed#comment-20095152 20095152
Some great recommendations here. In particular, T just had a nice bounce off of its 200-day M.A. and QCOM also just responded well to support at $61 per share. And I agree that both set up well from a recurring revenue and dividend growth standpoint.

Excellent points.]]> Tue, 18 Jun 2013 09:46:37 -0400
Some great recommendations here. In particular, T just had a nice bounce off of its 200-day M.A. and QCOM also just responded well to support at $61 per share. And I agree that both set up well from a recurring revenue and dividend growth standpoint.

Excellent points.]]> http://seekingalpha.com/article/1507192/comments?source=feed#comment-20094882 20094882
Thanks for your comment and for raising this important point. I think you're absolutely on to something here, particularly given the fact that Bernanke is bowing out of Jackson Hole this year. If the intent was to keep QE in place without any signs of tapering through the summer, it would set up better for Bernanke to attend. But with him almost certainly stepping down in January, it sets the stage for his likely replacement (Yellen) to take the baton on the next stage of Fed policy actions. It will be interesting to see, but I think that you are right that the recent news does nudge this probability a bit higher.

Thanks again.]]> Tue, 18 Jun 2013 09:41:16 -0400
Thanks for your comment and for raising this important point. I think you're absolutely on to something here, particularly given the fact that Bernanke is bowing out of Jackson Hole this year. If the intent was to keep QE in place without any signs of tapering through the summer, it would set up better for Bernanke to attend. But with him almost certainly stepping down in January, it sets the stage for his likely replacement (Yellen) to take the baton on the next stage of Fed policy actions. It will be interesting to see, but I think that you are right that the recent news does nudge this probability a bit higher.

Thanks again.]]> http://seekingalpha.com/article/1507192/comments?source=feed#comment-20094782 20094782 Tue, 18 Jun 2013 09:38:32 -0400 http://seekingalpha.com/article/1507192/comments?source=feed#comment-20094752 20094752
Thanks as always for your comment and for your excellent thoughts and perspectives. And I think you are absolutely right, as any stimulus from the PBOC could be an absolute game changer for the markets in general and the more cyclical stocks in particular. To this point, your recent article on Caterpillar was excellent, as this company in particular would likely be a direct beneficiary of such a development. I will be watching this closely in the days and weeks ahead.

http://seekingalpha.co...

Thanks again Norman. I appreciate it.]]> Tue, 18 Jun 2013 09:38:10 -0400
Thanks as always for your comment and for your excellent thoughts and perspectives. And I think you are absolutely right, as any stimulus from the PBOC could be an absolute game changer for the markets in general and the more cyclical stocks in particular. To this point, your recent article on Caterpillar was excellent, as this company in particular would likely be a direct beneficiary of such a development. I will be watching this closely in the days and weeks ahead.

http://seekingalpha.co...

Thanks again Norman. I appreciate it.]]> http://seekingalpha.com/article/1507192/comments?source=feed#comment-20094602 20094602
Thanks for your comment and for raising a good question. I'm not necessarily making the case that gold will go up if the Fed announces its intent to taper asset purchases in the coming months. Instead, my point here is to demonstrate that unlike stocks that risen with QE and fallen without QE ever since the outbreak of the financial crisis several years ago, gold and silver are not so exclusively dependent on QE, as they have both risen and fallen with QE and without QE. In short, the performance of gold and silver going forward is less about QE and more about the sentiment of fear including the perception among investors that something may be going wrong or about to come apart, whether it is inflation, deflation, too much money printing, currency instability, stock/bond market collapse, etc. It is in this regard that it continues to be viewed as a safe haven store of value despite its absolutely lousy performance over the last two years.

Thanks again for raising an excellent point.]]> Tue, 18 Jun 2013 09:35:20 -0400
Thanks for your comment and for raising a good question. I'm not necessarily making the case that gold will go up if the Fed announces its intent to taper asset purchases in the coming months. Instead, my point here is to demonstrate that unlike stocks that risen with QE and fallen without QE ever since the outbreak of the financial crisis several years ago, gold and silver are not so exclusively dependent on QE, as they have both risen and fallen with QE and without QE. In short, the performance of gold and silver going forward is less about QE and more about the sentiment of fear including the perception among investors that something may be going wrong or about to come apart, whether it is inflation, deflation, too much money printing, currency instability, stock/bond market collapse, etc. It is in this regard that it continues to be viewed as a safe haven store of value despite its absolutely lousy performance over the last two years.

Thanks again for raising an excellent point.]]> http://seekingalpha.com/article/1503172/comments?source=feed#comment-20005692 20005692 Fri, 14 Jun 2013 23:03:04 -0400 http://seekingalpha.com/article/1503172/comments?source=feed#comment-20005642 20005642
Thanks as always for your excellent and well thought out commentary. You provide a variety of outstanding points as usual. And thanks for sharing the link to Krasting's article on ZH. I think he raises some very good points about risks that must be watched very carefully in the days and weeks ahead. Lately, I've been including in my article the caveat about the potential for the Fed to lose control of the bond market, and it is potential scenarios like these lurking under the surface that I'm thinking of when adding this statement. And while I think the likelihood for such an outcome in the U.S. is low, I do worry quite a bit about things spiraling out of control in Japan, as the spillover effects could spread globally very quickly.

Great points as always Gerry. Thanks again.]]> Fri, 14 Jun 2013 23:01:27 -0400
Thanks as always for your excellent and well thought out commentary. You provide a variety of outstanding points as usual. And thanks for sharing the link to Krasting's article on ZH. I think he raises some very good points about risks that must be watched very carefully in the days and weeks ahead. Lately, I've been including in my article the caveat about the potential for the Fed to lose control of the bond market, and it is potential scenarios like these lurking under the surface that I'm thinking of when adding this statement. And while I think the likelihood for such an outcome in the U.S. is low, I do worry quite a bit about things spiraling out of control in Japan, as the spillover effects could spread globally very quickly.

Great points as always Gerry. Thanks again.]]> http://seekingalpha.com/article/1503172/comments?source=feed#comment-20005462 20005462
Thanks as always for your comment and your insights. Related to a point you've raised, it is interesting to note the performance of the defense stocks in recent weeks, as the leading names such as General Dynamics (GD), Lockheed Martin (LMT), Raytheon (RTN) and Northrop Grumman (NOC) are all performing exceedingly well despite the broader market pressure.

I also noted the revised IMF forecast today, which if nothing else should bode well for interest rate sensitive assets regardless of what the Fed opts to do next week.

Thanks again.]]> Fri, 14 Jun 2013 22:55:10 -0400
Thanks as always for your comment and your insights. Related to a point you've raised, it is interesting to note the performance of the defense stocks in recent weeks, as the leading names such as General Dynamics (GD), Lockheed Martin (LMT), Raytheon (RTN) and Northrop Grumman (NOC) are all performing exceedingly well despite the broader market pressure.

I also noted the revised IMF forecast today, which if nothing else should bode well for interest rate sensitive assets regardless of what the Fed opts to do next week.

Thanks again.]]> http://seekingalpha.com/article/1503172/comments?source=feed#comment-20005322 20005322
Thanks for your comment. I do agree that the potential exists for the Fed to continue providing stimulus well after inflationary pressures become firmly entrenched. Although it will be interesting to see if the Fed is forced to change its course due to forces beyond its control. In a sense, the recent developments from Japan have such a look and feel to them given all of the global volatility the BOJ actions have generated.

Thanks again. ]]> Fri, 14 Jun 2013 22:46:32 -0400
Thanks for your comment. I do agree that the potential exists for the Fed to continue providing stimulus well after inflationary pressures become firmly entrenched. Although it will be interesting to see if the Fed is forced to change its course due to forces beyond its control. In a sense, the recent developments from Japan have such a look and feel to them given all of the global volatility the BOJ actions have generated.

Thanks again. ]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19929732 19929732
Thanks as always for your comment and for sharing your wisdom. I hope everything is going well with you.

Excellent point about highlighting Elliott Wave Theory here. I also would be interested to explore the EWT perspective on Treasuries right now from those that have expertise in the area.

Outstanding point as always. Thanks again!]]> Thu, 13 Jun 2013 10:14:37 -0400
Thanks as always for your comment and for sharing your wisdom. I hope everything is going well with you.

Excellent point about highlighting Elliott Wave Theory here. I also would be interested to explore the EWT perspective on Treasuries right now from those that have expertise in the area.

Outstanding point as always. Thanks again!]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19929522 19929522
Thanks for your comment and for sharing your strategy on LQD. I am already allocated to this area of the market, but would be watching it for potential entry points were I not. The segment that I am currently watching for a potential reentry point is TIPS, as the carnage in this particular category has been extraordinary and are now deeply oversold with real yields now positive for the first time in a while. I suspect this is likely due in part to the unwind of sizable positions in TIPS held by many hedge funds that were anticipating inflation resulting from the Fed's latest QE3 stimulus program. Watching for signs of a bottom at this point.

Thanks again. ]]> Thu, 13 Jun 2013 10:11:22 -0400
Thanks for your comment and for sharing your strategy on LQD. I am already allocated to this area of the market, but would be watching it for potential entry points were I not. The segment that I am currently watching for a potential reentry point is TIPS, as the carnage in this particular category has been extraordinary and are now deeply oversold with real yields now positive for the first time in a while. I suspect this is likely due in part to the unwind of sizable positions in TIPS held by many hedge funds that were anticipating inflation resulting from the Fed's latest QE3 stimulus program. Watching for signs of a bottom at this point.

Thanks again. ]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19928982 19928982
Thanks so much for your comment. I appreciate it! And I agree with you completely on Hoisington, as I always enjoy the opportunity to follow Van Hoisington and Lacy Hunt's commetary and analysis.

Thanks again!]]> Thu, 13 Jun 2013 10:03:49 -0400
Thanks so much for your comment. I appreciate it! And I agree with you completely on Hoisington, as I always enjoy the opportunity to follow Van Hoisington and Lacy Hunt's commetary and analysis.

Thanks again!]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19928362 19928362
Brilliant comment as always. You make a ton of excellent points and this your comment here is precisely why I am a follower of your commentary. Thanks for sharing your thoughts and perspectives on this article.]]> Thu, 13 Jun 2013 09:54:20 -0400
Brilliant comment as always. You make a ton of excellent points and this your comment here is precisely why I am a follower of your commentary. Thanks for sharing your thoughts and perspectives on this article.]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19928182 19928182
Thanks for your comment and for including Bob Farrell's 10 Rules here on this article. I have spent a great deal of time revisiting these rules over the last few months, as they are always important to keep in mind during periods of market stress in either direction. I've included a link here complements of Stockcharts.com for those that are interested in taking a look.

http://bit.ly/140wr1F

Thanks again for your comment. I appreciate it. ]]> Thu, 13 Jun 2013 09:51:01 -0400
Thanks for your comment and for including Bob Farrell's 10 Rules here on this article. I have spent a great deal of time revisiting these rules over the last few months, as they are always important to keep in mind during periods of market stress in either direction. I've included a link here complements of Stockcharts.com for those that are interested in taking a look.

http://bit.ly/140wr1F

Thanks again for your comment. I appreciate it. ]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19927752 19927752 Thu, 13 Jun 2013 09:45:45 -0400 http://seekingalpha.com/article/1498752/comments?source=feed#comment-19927712 19927712 Thu, 13 Jun 2013 09:45:24 -0400 http://seekingalpha.com/article/1498752/comments?source=feed#comment-19927672 19927672
Thanks for your comment. This is an interesting point that I am going to revisit based on your question. Typically, a strengthening yen has been fairly positively correlated with strength in U.S. bonds, but this is clearly not the case at the moment, which I believe is due to the forces that are driving liquidation right now. Very good question and one that I will explore further.

Thanks again.]]> Thu, 13 Jun 2013 09:44:47 -0400
Thanks for your comment. This is an interesting point that I am going to revisit based on your question. Typically, a strengthening yen has been fairly positively correlated with strength in U.S. bonds, but this is clearly not the case at the moment, which I believe is due to the forces that are driving liquidation right now. Very good question and one that I will explore further.

Thanks again.]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19927392 19927392
Thanks for your comment and for raising an outstanding point about PFF. Going all the way back to prior to the financial crisis in 2007/2008, I have long monitored weakness in Preferred Stocks and High Yield Bonds as important leading and coincident indicators of real stress in the financial system and a potentially sharp stock market decline. As a result, the recently sharp decline in PFF is a deeply troubling signal for the stock market in the days and weeks ahead. To this point, the last time we saw comparable weakness was summer of 2011, and the stock market quickly dropped by -15% in a matter of days.

Outstanding point and thanks for raising it.]]> Thu, 13 Jun 2013 09:38:50 -0400
Thanks for your comment and for raising an outstanding point about PFF. Going all the way back to prior to the financial crisis in 2007/2008, I have long monitored weakness in Preferred Stocks and High Yield Bonds as important leading and coincident indicators of real stress in the financial system and a potentially sharp stock market decline. As a result, the recently sharp decline in PFF is a deeply troubling signal for the stock market in the days and weeks ahead. To this point, the last time we saw comparable weakness was summer of 2011, and the stock market quickly dropped by -15% in a matter of days.

Outstanding point and thanks for raising it.]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19927172 19927172
Thanks for your comment and for your excellent points as always. I completely agree - if interest rates continue on the rise, particularly if it appears that the Fed has lost control over the bond market, the pain in the long-term bond market will be particularly acute. Excellent point.

Thanks again.]]> Thu, 13 Jun 2013 09:33:54 -0400
Thanks for your comment and for your excellent points as always. I completely agree - if interest rates continue on the rise, particularly if it appears that the Fed has lost control over the bond market, the pain in the long-term bond market will be particularly acute. Excellent point.

Thanks again.]]> http://seekingalpha.com/article/1498752/comments?source=feed#comment-19927112 19927112 Thu, 13 Jun 2013 09:32:26 -0400 http://seekingalpha.com/article/1498752/comments?source=feed#comment-19927092 19927092
Thanks as always for your comment and for sharing your insights. The decision to exit bonds a few months back has clearly served you well in avoiding the recent pullback. And MLPs have certainly held up well relative to many of its interest rate sensitive counterparts to this point. Hopefully they will be able to sustain this relative strength and avoid the volatility.

Thanks again for your comment. I appreciate it.]]> Thu, 13 Jun 2013 09:32:08 -0400
Thanks as always for your comment and for sharing your insights. The decision to exit bonds a few months back has clearly served you well in avoiding the recent pullback. And MLPs have certainly held up well relative to many of its interest rate sensitive counterparts to this point. Hopefully they will be able to sustain this relative strength and avoid the volatility.

Thanks again for your comment. I appreciate it.]]>