Zeev's Turnips Patch-No Politics (ZEEV)

[Joe Stocks]

The 94/95 market was a very different market than the one we have today. The discount rate was at 5.25%. We had a very new and life changing technology taking place. Demographics were much stronger as the largest segment of our population, those born between 1950 and 1957, were entering their peak productive and spending years. We were also entering the peak years for home building as most build or buy their most expensive home at ages 43-45 years old. The meat of the baby boomers hit that cycle between 1993 and 2002. Much of Europe was showing the same demographic trends.

All of this is different this time. The Fed doesn't have the bullets to reduce rates here. We could actually see an inverse yield curve. That almost always 'says' recession. Equities are not happy during a recession. the years of "don't fight the fed" are over. It did not work in 2000, and will not work here. The Fed is behind the ball now being reactive than proactive.

A 3% 10 treasury doesn't compute to "happy equities".