The above chart is from the Financial Times article Authers’ Note: Hunting for yields is getting easier.
John Authers also notes the “Dividend Aristocrats” of the S&P 500 — the stocks with the highest and most reliable dividend yields — are finding that they now have competition from 2-year Treasury bonds.
Authers makes a number of interesting points.
- The Beige Book features far more references to inflation than it did when inflation was last persistently above the Fed’s target.
- The intensity of references to inflation on the Google search engine is moving up.
- Net share buybacks have been negligible. It looks like the bulk of last quarter’s repurchases went on stock options.
It’s increasingly easy to stick with my prognosis: Inflation is in the Rear-View Mirror.
The Nearly Unanimous Opinion: Inflation Has Arrived, reinforced today, adds to my conviction.
Mike “Mish” Shedlcok
Who will pay the interest in a supposed new trend of rising rates? How will they do it?
“The mere fact the author thinks rates will continue down when so many pensions are grossly unfunded is laughable.”
That statement is laughable. Pension plans are heavily in equities. They also have 7% or more plan assumptions. 3% or even 5% will not do it. And equities will get smashed. Please think!
The mere fact the author thinks rates will continue down when so many pensions are grossly unfunded is laughable. The Fed did appease the IMF and foreign entities for too long in order to keep foreign balance sheets with too much dollar-based debts from exploding. However, with the pension crisis now on their doorstep, get ready for the sovereign default dominoes to start falling. Rates may knee jerk down temporarily during a crisis, but the multi-decades trend higher in rates has already started. How do rates decline when socialism is collapsing?
Why, do pensions no longer need higher yields, or is it because trust and confidence in govt’s is increasing?
A (somewhat tedious) argument that there is no chance we go back to the pre-1981 rising prices/rising rates trend any time soon: https://monetary-metals.com/the-demand-to-hoard-report-13-may-2018
Did you actually pay any attention to the article above? It’s about yield and inflation, not the cr@p you’ve been blathering on about. A state-driven socialist economy is not about to take the lead, except in someone’s dreams. They have thus far stolen and replicated technology from elsewhere so I wouldn’t hold my breath.
Europe is not challenging the US. It isn’t only a matter of trade, there are also other aspects such as technology transfers. Since the very beginning of human history, technological dominance has always been related to military supremacy and security. China has been the biggest economy of the world before the industrial revolution and now is slowly rising back to challenge the dominance of the West. Now think of what would it mean China, still a state-driven socialist economy. getting the lead in AI, self-driving military vehicles and so on.
Anyone who thinks that interest rates are headed any more than slightly higher from here (before collapsing back to near ZERO) is going to find themselves
sorely mistaken.
In a world completely saturated with $USD denominated debt, it will not take much longer for interest rates, even at current levels, to do an enormous amount of economic/financial damage.