Zeev's Turnips Patch-No Politics (ZEEV)

[duper_man]

Zeev, "fear of missing it" is very strong right now precisely because investors minds have been conditioned over many decades that markets always go up. So definitely the fear of not being on board when the train leaves the station resonates more than anything at the moment.

The puzzle though is the interest rate thingie. As you said back in the early 80's rates were at 15-16% which takes money away from stocks. Today a whole different picture. I don't know how to explain the recent vertical jump in rates and I have had some discussions with others here on this. The bullish view says that rates are going up simply because the economy is responding to the stimulus and is beginning to heat up which increases the demand for capital. The bearish view is thatthe large and increasing government deficit makes the US a higher risk to investors who then demand a higher interest rate. If rates stabilize here it's good for stocks but if they continue their vertical ascent it'not good. What's your take in this?