At
JTH's suggestion, here is a
repost of something I put in my account thread this morning:
So far this morning, my favorite reading has been a rather lengthy article on Safe Haven entitled, "Words for the (Investment) Wise for the Week that Was." Here are a couple of quotes from the article that I especially noted. If you have the time, I highly recommend the entire article. It's long and takes some absorbing, but has some great nuggets of information.
"...Two important trend reversals deserve mention, namely US 10-year Treasury Notes having breached their key 200-day moving average, and likewise the US dollar. Treasuries fell out of favor as a result of a poorly received $14 billion auction of 30-year bonds on Thursday, with 10-year Notes and 30-year Bonds rising to 3.29% (+17 bps) and 4.27% (+23 bps) respectively on the week. As massive issuance overhangs the sovereign bond market, investors speculated about the Fed's pain threshold for long-term rates. According to
Reuters, PIMCO's Bill Gross said: "In order to maintain a 4% agency mortgage rate, the Fed will likely have to step up its daily purchases of Treasuries and focus on the longer end of the curve."
Source:
StockCharts.com
As far as the greenback is concerned, Richard Russell (
Dow Theory Letters) said: "I don't think most people understand the importance of the whole dollar, bond, interest rate syndrome. First, the US is creating and spending fiat dollars in the trillions. This wild creation of dollars is putting pressure on the dollar - after all, too much of anything will dilute its value. Dollar down = bonds down."...."
"...Jeremy Grantham's (
GMO) take on the stock market outlook is summarized in his recent quarterly
newsletter, in which he says: "The current stimulus is so extensive globally that surely it will kick up the economies of at least some of the larger countries, including the US and China, by late this year or early next year. (This seems about 80% probable to me, anyway.) Anticipating this, we should expect a stock market recovery - which normally leads economic recovery by six months, plus or minus two - sometime between two months ago and, say, August, which the astute reader will realize implies that this rally may already be it."..."
http://safehaven.com/article-13306.htm
Lady
