Was the recent YEILD SPASM a MACRO EVENT OR A MARKET EVENT?
Well, Time will tell.
But Bill Gross on NBR last night stuck to his story that ALL YEILDS
ARE NOT CREATED EQUAL.
True, long US bonds may be risky today.
But other income instruments were recommended by Gross.
For example, he thinks the yeild on some Muni bonds are interesting
at 7%+ TAX FREE. Also foreign bonds were mentioned.
And, could junk and corporates also be included?
And, this notion that REITS are bad in a good economy is just
nonsense.
My hunch is that the recent unpleasantness in the income market was
just a MARKET EVENT reflecting a greatly over-bought condition.
And, this idea that Mr G is going to start a series of rate hikes is
just nuts. Mr G loves his asset inflation too much to risk it all
now.
TODAY, REITS, PREFERREDS, MUNIS AND OTHER INCOME ARE IN "BUYING
OPPORTUNITY" MODE.
THE SELL OFF WAS PRE-MATURE. STILL, IF THE JOBS NUMBER WAS REAL--THE
TROUBLES COULD COME BACK QUICKLY.
BUT FRANKLY, I DON'T BELEIVE THE JOBS NUMBERS.
THEY JUST DON'T REFLECT THE REALITIES ON MAIN STREET, AS FAR AS I CAN
TELL.
Even so REMEMBER, as Bill Gross clearly stated, all income is not
created equal. Some yeild instruments are safer than others, even in a "good" economy.
