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Equity Markets “Take Off” as Rates Rise

It is always disappointing to me to see the silliness of the marketplace in reaction to potential deals–such as trade deals.

We don’t do politics, at all, on the website, but for once I would like to see both stocks and bonds trade on fundamentals.

We have so-called ‘trade deals’ which move the markets and we have a FED that is being controlled by short term market movements. Then we have algorithms moving the market based on whatever key words are in the news

Early this morning we had a quiet market–both interest rates and stocks were off just a bit–nice and quiet just like we prefer. Then a tweet and a meeting at the Whitehouse on China sends market sharply higher. Stocks up 1% and interest rates up 7 basis points (9 basis points higher from earlier levels) on the day.

Now in the end it doesn’t matter too much to me–holding what I hold there isn’t much movement, but I do worry about movements in markets getting out of control–irrational exuberance–as these things eventually (who knows when) come home to roost with movements in the opposite direction.

Oh well I guess I should get used to it–it certainly seems like the new norm.

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