A few days ago the REIT RIOT was all on the upside.
Today, REITS can't be sold fast enough!
Clearly, everyone feels that the days of ultra-low rates are over.
Income instruments are dropping like a stone.
Munis! REITS! Preferred! Junk! All are plunging today.
SHADES OF JULY, REVISITED!
But, in July there was a miraculous recovery. Will we be so lucky
this time. Maybe not. But Consider:
GREENSPAN IS UNDER ENORMOUS PRESSURE TO "NORMALIZE" RATES.
Additionally, gas is at an historic high. And, China is creating
a "giant sucking sound" in the commodities markets.
But the banks are up to their eyeballs in "carry trade" bets. And,
Fanny and Freddie are looking like star-crossed lovers these days. I
fear for the banks if the wheels come off the bond market.
OK, that's the yada yada, but what to do?
IF YOU BAIL? THE MARKET WILL STABILIZED IN A FEW DAYS AND REBOUND
NICELY. RIGHT?
AND, IF YOU DON'T BAIL? THE ENTIRE BOND MARKET WILL GO DOWN THE
TIOLET LIKE A GIANT TURD! WITH MR G WORKING THE PLUNGER!
Right now, "the system" can't really handle a BOND MARKET CRASH.
So, my hunch is that once some of the suckers have panicked again,
things will settle down. They always do.
Remember, the entire banking system is riding on this bond market,
not just your 401k.
So, those "nefarious forces" will likely be at work to "save the
banks" again
INDEED, EVEN THE CENTRAL BANKS MAY NEED SAVING!
THE BOJ MUST BE ABOUT FRANTIC NOW.
Presently, the daytraders are dumping income and buying the NAZZ
hotties. But, I'm not going down that rat hole again.
IF THE BOND KEEPS CRASHING,.....I'LL STAY COOL......AND BUY MORE
BONDS WHEN THE PRICE AND YIELD IS RIGHT!
CONSIDER:
"WHAT WOULD BOJ DO?"
Ahhhh yes,.....THE ZEN OF INVESTING!
