It is Interesting to Note

日期:2013/06/24

It is interesting to note that there have been 92 days over the last 15 years, that's six a year, that bonds and stocks have both been down 1/2 on a daily basis. But three of them have occurred in the last month. The red colors on our DailySpec graph illustrate this in part. Looking at the concurrent of down 1% and 2% days, we've had 3 years without such events but 3 of them in last month. We are entering a different world where the old regularities much be reconsidered.

A Query or Two

Isn't one of the main reasons that the economy has not been as vibrant as hoped because of the QE? The Fed has an opportunity cost for the assets it has bought. That opportunity cost around the world must be 400 billion. It was taken from the common man, either through direct payments not given or futures increases in service rates and interest costs, and given to the banks. The Fed itself must have a loss of 200 billion on those assets purchased. How has this provided an artificial and frictional stimulus which in the reasonable future will leave us worse off? Regardless, they can't let stocks go down too much, or else everyone will complain and it will be bad for the flexion in November, 2014.