Quote:
Originally Posted by Saratoga_Mike
A) Whether you respect the Fed or not*, you should respect the power of monetary policy.
B) If you believe Fed Funds have actually increased by 500 bps since the summer of 2014 (using a QE-adjusted Fed Funds rate), it doesn't seem illogical really. Was it illogical when the market was rallying? Maybe you thought it was - some did (I was in that camp over the past year or so).
C) It depends on how actively you manage your money. If you're active, t-bills yielding almost 2% aren't a bad thing.
*Much of the high levels of debt in financial system is due to an overly accommodative Fed (post the early 80s). If that's your point, we agree.
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company's borrowed money for close to nothing and bought back stock with the money. now they have to service the debt at higher rates and payback what they owe. that fact alone could bring plenty of selling pressure on shares if the revenues haven't gone up enough. what we do know is that salaries and bonuses have gone crazy. and to top it all off the money that they have repatriated isn't coming back that cheap. should the dollar lose some value, we might not see that much of a decline. there is some strong s+p support sitting right beneath where this market closed today. should that crack, we could easily see another 2000 point decline on a technical basis.
