Biotech Values

[zipjet]

I’m calling it a bond bubble because investors who own bond funds or individual long-maturity bonds could end up losing a lot of money if interest rates return to historically normal levels.

That is one big IF IMO.

You do have the talking-heads on your side. But they have been wrong for a long time.

Keep in mind that the T-yield curve is historically very steep judged by 2->10, 2->30, or even 10->30. So not all history is on your side.

The history that is on your side is the general level of the curve as contrasted with the slope.

So why MIGHT it be different this time?

jbog rightly points to supply demand. Historically industry and consumers were capital constrained. That is no longer true. Money is abundant and cheap - despite that, demand is not effective in putting the money to work.

I argue that the YC is first order a function of economic activity. Until economic vitality returns we should expect flat to sinking (more likely IMO) rates.

ij




PS - This is an example where jbog resonates.