how can you be so confident it was just a "scare"? at some point, do you ever question your militant optimism?
I suspect even lower yields are in the future---too much capital looking for a home, not enough places to invest. And while very low yields seem odd now, until the 1970s low yields were the norm. The Fed may in fact be following a too-tight monetary policy, which paradoxically causes low interest rates. Why? No threat of inflation, yet no great equity opportunities in a sluggish economy.
It seems like on the margin, things are heading in a negative direction.Housing is rolling over.US equities sold off and are flat for the year.Gold is hitting fresh highs.Unemployment is stuck in a holding pattern. While declining rates of job losses were good, elevated unemployment overtime is bad. Eurzone CDS and 10YR spread to bunds are much wider on the year.The inventory stimulus is waning.The clunkers and other clunker-like programs are waning.The Chinese equity index is in bear market territory.US Local and State economies are about to hit the wall.Taxes are going up, not down.
Let' not forget the TED spread!http://www.bloomberg.com/apps/quote?ticker=.tedsp:indI think right now is the best investment environment. - Equity are relatively cheap- there are no excesses to collapse because the world has already collapsed- the monetary policies are the wind on investors' back- the world is in a positive feedback loop. I know this is going sound a bit over the top, my bet is really a simple bet that humanity will ultimately triumphs over great adversity. Yes, there is volatility but I am patient.
BTW-Cover WSJ today, China eclipses USA to become world's largest manufacturer. And is pulling away....Thus, if you want to talk about commodities, you have to include China in the conversation, and more and more every year. If you think higher commodities prices necessarily reflect Fed action, you might be reading false signals....
Benj,By pegging their currency to the US dollar China has largely adopted our monetary policy. Thus a loose fed is stimulative to China. I agree China must be considered when evaluating commodity prices. As you point out China is a major consumer.
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