Certain the train will continue rolling along as long as there is $1 trillion every 90 days or so to throw into the boiler...but hey how long can that last?
True enough. That is why I tend to think more steepening. The supply is tough math. The banks have their issues, the Fed is on a diet, China is pissed, and there is only so much willingness to take duration risk.
The dark side says historical risky asset returns (stocks and credit) are there to look at for comps across history for UST ceilings. It becomes an asset allocation decision for the many trillions of retirement funds for example.
At some point nominal returns expected on UST and high quality fixed income will be "loud talking distance" away from long term equity returns (under 10%). It is not impossible since it has happened before. That is a tad alarmist this soon, but demand has a price. The question is where on the curve? The debt spiral freaks make the leap straight to Dante on Acid. Wild times.
Of course, a recession is available from the doctors.
Certain the train will continue rolling along as long as there is $1 trillion every 90 days or so to throw into the boiler...but hey how long can that last?
True enough. That is why I tend to think more steepening. The supply is tough math. The banks have their issues, the Fed is on a diet, China is pissed, and there is only so much willingness to take duration risk.
The dark side says historical risky asset returns (stocks and credit) are there to look at for comps across history for UST ceilings. It becomes an asset allocation decision for the many trillions of retirement funds for example.
At some point nominal returns expected on UST and high quality fixed income will be "loud talking distance" away from long term equity returns (under 10%). It is not impossible since it has happened before. That is a tad alarmist this soon, but demand has a price. The question is where on the curve? The debt spiral freaks make the leap straight to Dante on Acid. Wild times.
Of course, a recession is available from the doctors.