Comments on: HAVING SOME FUN WITH FLOWS http://pragcap.com/having-some-fun-with-flows Fri, 25 May 2012 10:48:32 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: tradeking13 http://pragcap.com/having-some-fun-with-flows/comment-page-1#comment-6273 tradeking13 Tue, 22 Sep 2009 19:40:45 +0000 http://pragcap.com/?p=9392#comment-6273 "many of our clients are very happy to be sitting on bond portfolios and cash reserves." such as baby boomers with short time horizons to retirement. “many of our clients are very happy to be sitting on bond portfolios and cash reserves.”

such as baby boomers with short time horizons to retirement.

]]> By: CF http://pragcap.com/having-some-fun-with-flows/comment-page-1#comment-6270 CF Tue, 22 Sep 2009 18:37:11 +0000 http://pragcap.com/?p=9392#comment-6270 I agree with TPC that inflation is highly unlikely in the near future as both supply of and demand for credit will be down for some time. This is exactly what happened in Japan while the private sector delevered. Interestingly, as demand for bonds increase and yields decrease we could also see savings rates increase well more than would normally be expected due to the low and decreasing yields. This, in turn, hurts the economy and we are stuck in a terrible vortex down which is the counter to the 'lower savings rates because equities and real estate will make me rich' mentality we have seen the last decade. In a nutshell, this is George Soros's 'Theory of Reflexivity' in action. I agree with TPC that inflation is highly unlikely in the near future as both supply of and demand for credit will be down for some time. This is exactly what happened in Japan while the private sector delevered. Interestingly, as demand for bonds increase and yields decrease we could also see savings rates increase well more than would normally be expected due to the low and decreasing yields. This, in turn, hurts the economy and we are stuck in a terrible vortex down which is the counter to the ‘lower savings rates because equities and real estate will make me rich’ mentality we have seen the last decade. In a nutshell, this is George Soros’s ‘Theory of Reflexivity’ in action.

]]> By: Exertia http://pragcap.com/having-some-fun-with-flows/comment-page-1#comment-6269 Exertia Tue, 22 Sep 2009 18:07:30 +0000 http://pragcap.com/?p=9392#comment-6269 Link to NYT article: http://www.nytimes.com/2009/09/19/your-money/19wealth.html Link to NYT article:
http://www.nytimes.com/2009/09/19/your-money/19wealth.html

]]> By: Eric http://pragcap.com/having-some-fun-with-flows/comment-page-1#comment-6268 Eric Tue, 22 Sep 2009 17:23:51 +0000 http://pragcap.com/?p=9392#comment-6268 Must mean inflation is about to kick and and wipe out those bond funds. Must mean inflation is about to kick and and wipe out those bond funds.

]]> By: TPC http://pragcap.com/having-some-fun-with-flows/comment-page-1#comment-6267 TPC Tue, 22 Sep 2009 17:23:23 +0000 http://pragcap.com/?p=9392#comment-6267 Well, the biggest risk to bonds is rampant inflation. Thus far deflation remains the bigger risk which means bonds should continue to perform well. I'd keep an eye on the money multiplier. A big spike in consumer borrowing and the velocity of money and inflation could destroy paper assets. Personally, I don't see that happening, but I also never underestimate the stupidity of the Fed. Check this out if you're interested in laddering some bonds: http://pragcap.com/whats-a-conservative-investor-to-do Well, the biggest risk to bonds is rampant inflation. Thus far deflation remains the bigger risk which means bonds should continue to perform well. I’d keep an eye on the money multiplier. A big spike in consumer borrowing and the velocity of money and inflation could destroy paper assets. Personally, I don’t see that happening, but I also never underestimate the stupidity of the Fed.

Check this out if you’re interested in laddering some bonds:

http://pragcap.com/whats-a-conservative-investor-to-do

]]> By: Naa http://pragcap.com/having-some-fun-with-flows/comment-page-1#comment-6266 Naa Tue, 22 Sep 2009 17:16:32 +0000 http://pragcap.com/?p=9392#comment-6266 The article quotes a high net worth financial advisor who said “many of our clients are very happy to be sitting on bond portfolios and cash reserves.” TPC - What can go wrong with "bond portfolios and cash reserves (MMF)" as I have been hearing this a lot too - I hope wall street is not looking at this to screw people for their next bubble (profit making)? The article quotes a high net worth financial advisor who said “many of our clients are very happy to be sitting on bond portfolios and cash reserves.”

TPC –
What can go wrong with “bond portfolios and cash reserves (MMF)” as I have been hearing this a lot too – I hope wall street is not looking at this to screw people for their next bubble (profit making)?

]]>