Friday, March 13, 2009

The Debts of the Spenders: The Bottoming Process

The US authorities can trigger a super bull rally in equities!

All they need to do is invite the bond vigilantes back in and chase the treasury bulls into equities.

This can be easily accomplished by increasing the size of the stimulus programs 10x. China can help out by dumping their treasuries.

Hmm. Oh wait. That scenario has several problems associated with it....

I'm curious to know how the Fed intends to keep interest rates low AND trigger an equity rally. After all, how can they tie benchmark interest rates like Libor and TED to rising yields?

Housing isn't going to recover anytime soon - not when ppl are being laid off left and right.


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