Tuesday, June 23, 2015
THE BOND MARKET IS LOADING UP ON CASH AND PIDDLING THEIR FRILLY PINK PANTIES - here's what you need to know
BI - the bond market is piddling their frilly little pink panties.
That Intro Macro lesson on the market for loanable funds says that the market clearing interest rate is determined by the balance of supply and demand. So if you're shorting the bond market, or even staying out of the bond market, that must mean you think investment spending is going to really take off, driving up funds demand and thus the interest rate.
Either that or you're a coke-headed fruitcake who doesn't understand that bond investing is all about preserving capital and clipping coupon, in which case you should get the hell out of the bond market anyway. Buy gold and MREs, dumbass.