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Great Bond Massacre Of 2013 - Part 2

Wednesday, July 10, 2013 - 6:20 PM
From MarketWatch.com:

The Great Bond Massacre of 2013, Part 2 - MarketWatch

Never thought that I see this day for bond (i.e., relatively risk-free fixed income investment vehicle). 

"The Fed has dug itself into a deep hole over the past four years, from which there is no easy way out, and that has now led to The Great Bond Massacre of 2013. As the old saying goes, when you're digging a hole that's getting too deep, the first step to getting out is putting down the shovel.

Ben Bernanke is putting down the shovel this week, and we're about to see if he can climb out of the hole without the walls collapsing in on top of him. It's going to be a tricky maneuver, and Wall Street Sector Selector remains in "yellow flag" status as the "Great Bond Massacre: Part 2" unfolds over the days and weeks ahead."

Sorry for the bad news; but don't kill the messenger:-)  For some reason, I have about $10K FINPX in my retirement portfolio, which is supposed to be the safest of all, now goes down every day.
6
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
1. Wednesday, July 10, 2013 - 7:22 PM
Bernanke began retracing his "tapering" mishap today. Bonds prices should recover somewhat as he has assured the markets that the easy money will continue for the "forseeable future." See Ken's post @

http://www.depositaccounts.com/fo...imulus.htm

Equity traders certainly liked Bernanke's message based on the futures markets.
6
ShorebreakShorebreak2,700 posts since
Apr 6, 2010
Rep Points: 14,636
2. Thursday, July 11, 2013 - 12:05 PM
"In one short and sweet statement, Federal Reserve chairman Bernanke has flicked a switch on the markets," said strategist Evan Lucas of Australia's IG Markets in a report.

Bernanke stimulus promise drives markets higher - Yahoo! News

“Printing money by the trillions of dollars has had the predictable effect of raising the prices of stocks and bonds and thus reducing the cost of servicing government debt. It also has produced second-order effects, such as inflating the prices of commodities, art and other high-end assets purchased by financiers and investors. But it is like an addictive drug, and we have a hard time imagining the slowing or stopping of QE without large adverse impacts on the prices of stocks and bonds and the performance of the economy. If the economy does not shift into sustainable high-growth mode as a result of QE, then the exit from QE is somewhere on the continuum between problematic and impossible.”

- Elliott's Singer On Bernanke Destroying "The Value Of Money" And "Uprooting The Basic Stability Of Society" 05/03/2013

6
ShorebreakShorebreak2,700 posts since
Apr 6, 2010
Rep Points: 14,636
3. Thursday, July 11, 2013 - 12:49 PM
I just do not have a good feeling about these artificial QEs and sweet-talking the market up stuff... it just does not sound rational.

Well, I will take/enjoy the rally and not bet against the Fed.
3
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
4. Thursday, July 11, 2013 - 2:57 PM
Re: 51hh @ 3. Thursday, July 11, 2013 - 12:49 PM

'It's almost as if the markets need to hear this over and over again.' said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

Since Bernanke now promises Wall Street that he will continue his easy money policy for near eternity then "the trend is your friend",  regarding the behavior of Mr. Market.
4
ShorebreakShorebreak2,700 posts since
Apr 6, 2010
Rep Points: 14,636
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