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re: 10 yr yield going to 5%
Posted on 9/21/23 at 10:28 pm to Art Blakey
Posted on 9/21/23 at 10:28 pm to Art Blakey
quote:
Equities probably collapse (who’s gambling on AI with risk free 10% available?).
Baw. Think for a second. Forget gambling on AI. shite, forget fundamentals, forget aapl, msft, brk, whatever. If rates went to 10% overnight, equities would not “collapse.” There would be a whole arse bank run on equities. Every person, pension fund, hedge fund, endowment, venture fund, you name it. Everybody liquidating at that point. The whole game is about taking on risk on the hope and prayer that you might match or possibly beat the historical 7% return of the market. Overnight rate increase to 10% would totally break the system.
1
Posted on 9/22/23 at 8:40 am to Sir Saint
quote:
Baw. Think for a second. Forget gambling on AI. shite, forget fundamentals, forget aapl, msft, brk, whatever. If rates went to 10% overnight, equities would not “collapse.” There would be a whole arse bank run on equities. Every person, pension fund, hedge fund, endowment, venture fund, you name it. Everybody liquidating at that point. The whole game is about taking on risk on the hope and prayer that you might match or possibly beat the historical 7% return of the market. Overnight rate increase to 10% would totally break the system.
I think 5% will likely induce a bank run on equities in the near future but it's impossible to say much of anything with any confidence due to the shear novelty of our current situation. We haven't been through a global sovereign debt crisis since the world wars. No one alive has ever seen this before.
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