tag:blogger.com,1999:blog-6616959642391988608.post267833805741572442..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: A bond bubble?Scott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-6616959642391988608.post-89532923177554120752010-08-27T16:08:44.083-07:002010-08-27T16:08:44.083-07:00Victor:
I calculate it is really at 7 percent to ...Victor:<br /><br />I calculate it is really at 7 percent to 8 percent.<br /><br />You gotta add in "Homeland Security" and "Civilian Defense" and VA spending. Even parts of the Department of Energy budget are defense-related.<br /><br />It is over 8 percent if you count in debt payments from war-spending. <br /><br />Moreover, if we faced a armed-to-the-teeth Soviet Union, Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-79906901412942350462010-08-27T13:37:29.541-07:002010-08-27T13:37:29.541-07:00http://www.sageadvisory.com/
then go to research ...http://www.sageadvisory.com/<br /><br />then go to research and education<br /><br />then go to guest presentations<br /><br />It's there. My link doesn't post correctly in this comments section.M Millerhttps://www.blogger.com/profile/05762326550608359675noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-87677179375671262922010-08-27T13:24:56.049-07:002010-08-27T13:24:56.049-07:00M Miller, the Hokenson link is deadM Miller, the Hokenson link is deadvghttps://www.blogger.com/profile/12084946645104339851noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-9508329941495086072010-08-27T10:50:28.180-07:002010-08-27T10:50:28.180-07:00As to demographics [and the investment implication...As to demographics [and the investment implications], the most important lecture of the past several years for me is Richard Hokenson, formerly with DLJ. You can listen to it at:<br /><br />http://www.sageadvisory.com/research/guestpresentations<br /><br />I highly recommend it. Also the Stratfor presentation is outstanding. <br /><br />I cannot emphasize this lecture enough. It was very very M Millerhttps://www.blogger.com/profile/05762326550608359675noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-27721331569290584932010-08-27T10:43:33.513-07:002010-08-27T10:43:33.513-07:00Frozen: It's difficult if not impossible to ar...Frozen: It's difficult if not impossible to argue one way or another the question of how much demographics is impacting asset values. I'm skeptical that the impact is significant, but I can't prove it. I note that demographic changes move at a relatively glacial pace, yet asset values have changed rather quickly in recent years. Also, while our society ages, others, such as China, areScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-26498535092613538452010-08-27T10:27:36.430-07:002010-08-27T10:27:36.430-07:00Benjamin, pardon my lack of exact precision, but D...Benjamin, pardon my lack of exact precision, but Defense spending accounts for about 5% of our spending if I'm not mistaken. I don't think that's too much. There are many other pieces of low hanging fruit in Guvmint spending.vghttps://www.blogger.com/profile/12084946645104339851noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-78103032575160906632010-08-27T08:23:46.163-07:002010-08-27T08:23:46.163-07:00Smaller government (and I want it) will lead to hi...Smaller government (and I want it) will lead to higher interest rates?<br />Guys. we have a glut of capital now. Even less borrowing?<br />I understand in prosperous times there will be more private-sector borrowing. But there will also be lots more private capital available. <br /><br />We have low interest rates now due to abundant capital, a dead inflation outlook, and very tight money Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-43408698678539431662010-08-27T08:04:53.913-07:002010-08-27T08:04:53.913-07:00Miller: what you're describing is the convexit...Miller: what you're describing is the convexity trade. If demand for 10-yr Treasuries drives yields down enough, then the negative convexity of mortgages (which changes them from bonds to cash as rates fall) causes increased demand for Treasuries as a hedge. Note that the process gets started with heavy demand for Treasuries. It then gains steam from hedging activity. Once demand for Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-60887876951984787032010-08-27T07:54:55.365-07:002010-08-27T07:54:55.365-07:00Speak: I do indeed think that a big change in the ...Speak: I do indeed think that a big change in the outlook for fiscal policy (i.e., smaller government) would result in a big rise in bond yields. If fiscal policy gets back on a more reasonable course, 10-yr yields could get back to levels more consistent with healthy economic growth, say 4-5%. I don't think this would pose a problem to the economy, since the rise in yields would be the Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-8944183810633463802010-08-27T06:59:59.548-07:002010-08-27T06:59:59.548-07:00As interest rates begin to eventually rise (and th...As interest rates begin to eventually rise (and they will), bond yields will take a concomitant dive. My advice is to avoid bonds until the interest rates reach 10-12%, and then buy in aggressively using laddered and international diversifications as required. Take great care with acquiring bonds at current rates and turn to equities instead.McKibbinUSAhttps://www.blogger.com/profile/10545798495680527622noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-30460925797877737792010-08-27T06:53:43.759-07:002010-08-27T06:53:43.759-07:00Are you saying that the removal of our statist nig...Are you saying that the removal of our statist nightmare will release cash caught in the bond market? You're talking about a big rise in rates over the next 12 months if the Republicans take over Congress. Do you have targets for US bond yields and the equity market in that case?SpeakToMehttps://www.blogger.com/profile/04512373918759007718noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-55883144737160524942010-08-27T06:46:11.891-07:002010-08-27T06:46:11.891-07:00One aspect you seem to ignore from your excellent ...One aspect you seem to ignore from your excellent analysis is the impact of demographics.<br /><br />My Dad, who turned 74 last week told me how his excellent broker made him change his investment portfolio. When he turned 65, his broker told him, get out of tech stock go for more conservative stocks. The impact was that he literally sold his tech exposure in 2000. <br /><br />When my dad Frozen in the Northhttps://www.blogger.com/profile/04901959687094626879noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-72444732863393755112010-08-27T05:43:01.793-07:002010-08-27T05:43:01.793-07:00My view, beyond the fear trade and the massive inf...My view, beyond the fear trade and the massive inflows into bond funds from retail investors:<br /><br />Insurance companies and banks with huge mortgage businesses (and mortgage servicing rights) are doing unprecendent amounts of hedging. If the 10 year and 30 year decline much further, it has huge destructive value on their insurance liabilities (minimum guarantees to annuity and life M Millerhttps://www.blogger.com/profile/05762326550608359675noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-52065791712027597302010-08-26T19:52:30.189-07:002010-08-26T19:52:30.189-07:00Add to the regulatory burden a military-foreign po...Add to the regulatory burden a military-foreign policy-VA complex that now sucks $1 trillion a year out of the jobs- and wealth-creating private sector, and relentlessly gets bigger and more expensive every year--even the collapse of the one adversay of weight, the Soviet Union, only slowed its growth for a while. Military outlays (in real terms) have doubled in the last 10 years. <br /><br />NowBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-47319772628637242362010-08-26T19:50:08.805-07:002010-08-26T19:50:08.805-07:00This comment has been removed by the author.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-18784384854237802422010-08-26T19:32:09.380-07:002010-08-26T19:32:09.380-07:00Scott,
To me your conclusion is rational. Busines...Scott,<br /><br />To me your conclusion is rational. Businesses are feeling cowed by a hostile and intimidating government that threatens them with more regulations and compliance issues while attempting to increase their taxes in the near future...then having the audacity to browbeat them for not adding more workers. Small businesses are hunkering down and maybe taking on a temp or contracting Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.com