Foreign Correspondence

[Ace Hanlon]

Max:

I agree 100% that the idea that bond yields will remain low as far as the eye can see is the fundamantal underpinning of all extant bubbles and that anything that disturbs this almost religious consensus will devastate stocks.

But until then downside risk in stocks is limited to perhaps 10-15% IMHO. When and if bond yields star to rise sharply (or traders start to anticipate such a hike) the stock market easily drop 30% or more.