Stocks & Bonds

Heads Spin: It Must Be a Bull Market


Heads Spin: It Must Be a Bull Market

Photograph by Anthony Arciero/Gallery Stock

“There’s just a positive tone to the market in part because recent lackluster economic trends have reinforced investors’ belief that the Federal Reserve will continue to press on the gas pedal. It’s just further evidence that this rally has been a highly caffeinated rally courtesy of global central banks, and their quantitative easing plans will continue.”
—Chad Morganlander, Stifel Nicolaus & Co., in Matthew Brown and Whitney Kisling: S&P 500 Index Rises to Record While Euro Gains With Italy Bonds, Bloomberg News, April 29, 2013

“At a time when politicians are squeezing budgets to cut borrowing, the bond market is clamoring for more debt, pushing yields on almost $20 trillion of government securities to less than 1 percent. The average yield to maturity for the Bank of America Merrill Lynch Global Broad Market Sovereign Plus Index fell to a record low 1.34 percent last week from 3.28 percent five years ago. Even though the amount of bonds in the index has more than doubled to $23 trillion—bigger than the gross domestic product of the U.S. and China combined —countries from Germany to Rwanda sold debt in the past month at their lowest yields.”
—Matthew Brown and Whitney Kisling, same article

If your head is spinning—and mine is—read and re-read Brown and Kisling’s masterpiece. Imagine, we read this stuff; they have to write it.

August brings the sixth complete year of our global financial crisis. Capitalism is price, price is determined by markets, and the markets have heads spinning with historic cross-currents “from Germany to Rwanda.”

Mr. Morganlander, above, tosses out one opinion to float upon the “highly-caffeinated” current within the Sea of Monetary Policy.

Brown and Kisling provide their own human comedy as always-late, mostly-wrong politicians “squeeze” while markets roar. (Price up; yield down.)

All I can guarantee is I will do three interviews tomorrow with three distinct and different opinions amid three different currents in what passes for the Ocean of Price Discovery.

Heads spin: It must be a bull market. Discuss.

Keene hosts Bloomberg Surveillance 7-10 a.m. ET on 1130 AM in the New York metro area and nationally on SiriusXM 113.

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