This is hilarious. Lets add billions more to the growing national debt, spike oil to derail the economic recovery all the while weakening Assad and strengthening the bigger threat- Al Qaeda. Anyone that thinks there is a difference between Republicans and Democrats is an absolute fool. This fraudulent two party system needs to be burned to the ground.
The treasury is currently liquidating trust funds, that support certain on going programs, to pay the current bills.
And they are going to borrow (raise the debt ceiling) another 4 trillion, not counting special appropriations for Syria (Surgical strike my butt, it's going to lead to something bigger, we all know this).
This, as retail has it's weakest quarter in many moons, the housing recovery is stalling, and money supply is shrinking, not expanding, in spite of QE.
Shiller PE at levels that historically precede crashes.
The banks have gone from unrealized gains to unrealized losses in the past month for some reason. This also does not bode well, as we're probably going to get a shocking bankruptcy filing in the near future from at least one of them.
Demand for credit....next to nil other than the govt.
How about a massive outflow from bonds to stocks - wait - here me out. I absolutely agree about the debt ceiling (Boehner and Cantor are trying to save themselves from their own Party- they can't control the Tea Party and in October it is default). Where the bond rotation comes in is - ready - expanded QE. No way the market can absorb the kind of dilution that the debt ceiling would cause. The Fed will have to absorb it and interest rates are going to soar if they don't keep up. They'll use all kinds of fancy tricks like swaps etc but they also remember what happened in Japan. The market absolutely soared with Abenomics massive stimulus and the new inflation numbers from Japan are tantalizing to say the least if you're a central banker.
Increasing QE BECAUSE OF SYRIA will hammer the dollar, and increase inflation of course while stabilizing emerging markets.
Interest rates will stabilize. Look at IBM and INTC as an example. 2.1 and 4.1 yields respectively. Do a 50/50 split and you still have an average yield of 3.05% = higher than the 10 year. Also, as the dollar falls, corporate profits rise for most of the big names. Housing gets a boost too.
They have already #$%$ all over gold so there is a very sour taste there right now. GOLD WILL HAVE ITS DAY BUT NOT RIGHT NOW - 2015? Trading will work better than buy and hold for now..
Where does all the rotation come from? The pensions. They're screwed and they know it. They will chase yield like crazy - watch SEC, FASB and Congress get together to change the rules on eligibility etc.
The consumer is going to get screwed as always. Inflation will chip away at any gains unless you can beat it and the only game in town for that will be stocks. The dumping you guys keep referring to is still a long way off.
We can't even fix pot holes in our roads. That money goes to the NSA so they can spy on you. We haven't fixed anything in 60 years, all we do is let what we have rot. Our cities crumble, roads and bridges fall apart but they sure did raise the tolls plenty. We can spend trillions to fight wars but we have no money to invest in our own country. We are rotting from within, the whole country is falling apart.