Bond Market is King

[makar]

A 30 year mortgage, that just sounds insane to me.

They 40 and under crowd consider it normal they think in how much a week.

[ajl]

U.S. banks are looking sickly . . . . Goldman Sachs now down more than 20% from its July high.

U.S. stock indexes up today on bad jobs news. Ideas, Fed now won’t hike rates in October as a result of failing job market. Wahoo!

President stated that inflation will take care of the U.S. debt. Problem is; the middle class would be wiped out and the U.S. dollar may rival the Argentine Peso. A gong-show.

Meanwhile, the 30-year crossed 6% today. Mortgage costs surging. This would be a great script for the next Big Short 2 movie release . . . .

Whoa. The 30 yr rate I look at was 5.63%. Definitely higher but not 6. Given that many nations that are going bankrupt right now are selling treasuries at a rapid pace (China and Japan to name a couple) I would argue that the US administration has been coping well. Here in canuckistan, $cdn has lost 5% relative to the $USD since April with high oil prices. Up here the inflation is just accepted and the bank of canada is printing to prop up the regime. What is frustrating is the price of grains are lagging inflation and the decline in the $cdn. What is interesting is that in Houston TX, gas prices are cheaper there now than when we were there in early April. 3.40 vs 3.69. Diesel in also falling in the US cooling inflation down south at the moment so sky not falling stateside. The president read the riot act to the goofs in europe who were driving diesel higher by sitting on their stockpiles and facilitating the bombing of Russian refineries at the same time with the primary goal of electing demoncraps in November.

[biglentil]

So the stock market is overvalued, bonds cratering in value as yields rise and cpi rips. Whats the safen haven Erroll?

[Old Cowzilla]

We live in a world where people finance a truck for 8 years (that loses 30%value in 1 ) so a 30 yr. note for a house looks like a steal of a deal and more space to sleep in. Yet you drive past any bigger city in western Canada and most are built out to the city limits or past with a huge house and a new truck parked in front of a 2 or 3 car garage.

[blackpowder]

A 30 year mortgage, that just sounds insane to me.

Agree. But if I had taken a 20 or 30 year mtg out on all I could handle 20 years ago, I'd be in much better shape now.
I guess it depends on rates and asset class/appreciation.

[errolanderson]

A lot of good comments on this post . . . . Don’t know how markets will shake out after the midterms. It appears obvious of a Democrat win, but does it stop there? What does the U.S. administration do now, accept the majority vote or something else?

The U.S. is in a very sad state as the world is regrouping to cut them out economically. Trust has been lost. And business is built on trust.

Where is the safehaven for money now? There isn’t one. Having cash in the bank is still my leaning, if the wheels fall off. If the stock market breaks, inflation may be a distant memory. Money printing will fail.

My opinion (and feel free to throw it out with the wash), there may be a post election political upheaval. Smaller U.S. banks are starting to go under. This bank and mortgage and insurance company fallout may gain more traction into 2027. We’ll know soon.

Fed money printing and the AI bubble is holding stock indexes near record highs despite slowing job market and majority of stocks under water in 2026. The concentration by a few holding equity together is quite worrisome. It’s a clock ticking (IMO).

Now the imploding bond market . . . . Why haven’t stock indexes crashed? Is this purely political now? Is the stage set for a crash once the midterms are over and passing of the torch? A lot of questions and few answers.

Really good comments on this thread. The bizarre has gone far beyond my expectations . . . .

PS: To get away from this political uncertainty, grain markets may show some impressive price spark in 2027. Food can take on its own dimension outside manipulative politics . . . .

[shtferbrains]

Saw a theory today that Carney is just going to wait it out till the Democrats advance in the mid-terms.
Then they can take Trump to court on much of the tariff issues.
So, what are we looking at for a timeline on how long till things like steel autos, wood products, etc, start shipping product once the lawyers get involved?
Yrs for sure?
Slam dunk for Canadians who work in those industries?

[sumdumguy]

If we can believe pollsters, Trump will lose at midterms, so IMHO I suspect the US dollar to tank when democrats start flexing their muscles and maybe the Cdn dollar will hop on an updraft. But I suspect that Trump will use all his power to throw out some carrots before the midterms, just like the Liberals have done here. Interesting times we are witnessing.

[biglentil]

Hard assets are the safe haven, massive inflation is on the horizon.

[Old Cowzilla]

The hard assets around this operation need petro products to run , maintain or generate income so nice to have but still no cake walk. Strange times indeed I got work done at 2 businesses yesterday both still short of labor while the country faces layoffs from tariffs. Country in verge of collapse yet help wanted signs everywhere.