SPX earnings yield is currently a bit over 5%. That's a decent pickup over 30-year Treasuries at 3.1%. You don't like the yield, that's too bad because that's what's on offer, and 5% in stocks is better than a couple of percent at most in cash. From where I sit the market is betting mostly right: rates will only go up another percent or so before inflation subdues, and it's more or less back to business as usual. We'll see what comes down the road.
This is correct, they want everyone to ignore asset inflation like house prices and stock prices. They control what goods go in the inflation basket. There is no inflation until they say so. Even though the stuff you really want to own stuff like stocks and real estate are inflating like crazy. Your buying power for the stuff you really want to own, again stuff like stocks and real estate, has been falling massively the last 13 years.
Topic is Inflation who's lowering prices. As in things that people buy - food, energy and rent, not pieces of paper i.e. MSFT/AMZN/SBUX/etc.
%% LOL\exactly. Plenty of food prices going lower, but it helps if you have a farm or chop\ shop chop carefully. Bid \ask spread on autos was always transitory\LOL AND amazing enough\ stuff like AMZN books like 'WHAT The IRS Does Not Want You to Know\by CPA M Kaplin+Mrs Naomi Weiss ''= super transitory downtrend$ but good downtrend$. Expect more polar bears down\stomping AK crude + downstomping Evil Empire [russian]crude. Pardon my concrete crude comments\ not predictions. The good news on bonds is the AUM magazine expects more inverse bond funds....................................................................................................................
Short memories. Weve already been through this in the 1970s. And yes, the Fed had to crash us into a very bad recession. But inflation remained all through the 1970s. Into the early 1980s. The emerging market countries were in turmoil and oil producing nations were loath to reduce oil prices once they had been up so high. It takes a full completed cycle. Hiking rates very high (which takes a long time). Then, allowing high rates to take effect (recession). Then, finally, slowly easing until lower rates allow for a rebirth of growth. The people that think this all happens in a few months are diluted. SunTraders article doesn't mention that the inflation led recession started in 1973. The fed tried to start hiking in 1973 but Nixon pressured them to quash this idea (almost exactly as Trump in his first term). It went into stagflation as Carter arrived. We started rebirth of real growth without inflation in 1983.
Difficult to make a comparison of the 1970s to now. Very different debt loads at all levels of the economy. You could never get rates anywhere close to where Volcker got them.