That's a very myopic perspective of things. The "bust out" of the various bubbles has an affect on every aspect of our lives, not just what we, as traders, are going to do to benefit from tailing the Fed's moves.
That may be so, but do we have an control over when that "bust out" occurs? The only thing we can control is what is available to exploit right now. Right now, dear Bubble Ben is jacking up the markets. So let's exploit that for as long as we can. The right time to go short is very likely when Bubble Ben starts raising rates. You may want to wait for a couple of rate increases.
No way.....if the market even "smells" there's an upcoming rate raise, LOOK OUT BELOW FOR EQUITIES. This market is hypersensitive to rates now. I watch TBT ETFs every day for a proxy for the 10 Year Bond rate. It appears the bottom is in re: rates.
Oh, no doubt! There will be a reaction, but then they'll go back up again. By 2014/2015, I think rates will be back above 2%. The breaking point is at about 2.5%. That's when I see a BIG sell off. Just a guess, I must admit.
A history of Japanese rates once it approached the "zero rate boundary". http://www.economagic.com/em-cgi/data.exe/bjap/ehdis01
Yes, but Japan had a more significant issue with deflation at that time. Very soon, you will see greatly increased inflation in the US as confidence increases and all of that cash sitting around starts to get moving again.
2014 to raise rates??? Its funny if you go back just 2 or 3 years ago they were suggesting raising rates in 2011, 2011 came and they pushed it off to 2012, 2012 came and now they are pushing it off until 2014, Im sure when 2014 comes he will push any rate hikes forward into 2016, and if he does raise them in 2014 it will be only a .25 or .50 hike, I think rates will stay under 1% until at least 2020, once China starts to slow down that will be the next excuse to keep rates at historical lows because once China slows down the entire world slows!
Thats going to be the same chart for the fed funds rate going forward, the economy is to used to what it has now that it can never push any further with rates any higher. This is a lost decade for the US...
2014 for the first rate increase??? Ah, I don't buy that for a second. That's what they told us a couple of weeks ago. I think rates will be peaking in 2014/2015, close to 2%. The big difference between now and 2011 is the improving employment situation.
I'm in agreement. The Bernank won't raise rates significantly. Perhaps a token rate hike, some jawboning by other members of the board...a bit of a hawkish tone, but no chance they raise rates anywhere near where they were in 2007.