Equity Overview with Chuck Gibson: Yields and Volatility of Stocks vs. Bonds – April 18

“Nine-tenths of wisdom is being wise in time.” ~ Teddy Roosevelt

By Catherine Austin Fitts

For decades, the G-7 economies have been the beneficiary of a long-term bull market in bonds. That has made it inexpensive for sovereign governments to borrow and spend, fueling economies throughout Europe, North America and the developed world. As government and corporate bond issuance has risen,  institutional and household savings have poured into the bond and fixed income markets, seeking and finding safety. As interest rates have fallen, bonds prices have held values or risen.

The signs that this bull market in bonds is coming to an end are growing.  As debt levels increase and developed economies slow down, credit quality has suffered.  Regulators are preparing to shrink the financial sector with resolutions that dispense with “too big too fail policies. And the possibility that interest rates could rise are growing. Certainly, it is hard to imagine that they have further to fall.

Will significant investment leave the fixed income market? And where is that investment going to go?

This Thursday, I will be speaking with Chuck Gibson, managing member of Financial Perspectives and my partner at Sea Lane Advisory, LLC, in the San Francisco Bay Area, for our 2nd Quarter Equity Overview. Chuck will walk us through the relative yields and stability in the bond and equities markets. He has prepared outstanding charts to help you see the changes underway. This presentation builds on the “1st Quarter Equity Overview” – if you have not read it, check it out on the transcript on the subscriber resource page.

I will start with Money & Markets. including a review of the events in the precious metals markets over the last week. Do post your questions for Ask Catherine and for Chuck on the blog!

In Let’s Go to the Movies, I will discuss an interview by Charlie Rose of Jeremy Grantham, co-founder and chief investment strategist of Grantham Mayo Van Otterloo. Grantham explains the difficulties facing investors when we do not govern our resources and economy in a fundamentally sound way. His comments give perspective and support to the long-term trends Chuck and I will be discussing in this Equity Overview.

This will be a good one. You don’t want to miss it!

Jeremy Grantham Interview/strong/strong

3 Comments

  1. Hi Catherine, Here is my question… It’s a curiosity, really, maybe not of great import, but:

    Why did the markets dive in the last hour of the market (like from 3:00 – 4:00) when the Boston Marathon bombing happened? My husband noticed it. The stock market dove in the last hour and the commodities also went down. I think they went back up a day later… It was all an icky, tragic event, but I don’t understand why it would affect the stock market.in such an immediate dramatic way. Does it have to do with programmed trading ? Do you have any idea? (If it’s a dumb question, feel free not to answer it .. I’m just curious).

  2. Hi Catherine
    What does chart 13 represent I missed the explanation of it. Being from Canada does this tell the next basket case senario ?
    Enjoy you very much and I hope we meet one day
    Ed Wallace

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