Mortgage Blues Should Buoy Equities
August 8, 2003
The economic climate may not be comfortable for the working prolitareate in these days of uncreasing
employment unstability but their 401Ks may start to cheer them up a bit. The same factors that are currently gagging
the mortgage and job markets should benefit the stock market throughout the rest of the year at least.
The massive influx of treasury notes to finance the budget deficit are driving investors away from the
bond market like Wildebeast from a spastic leopard. Since fund managers and investment advisors don't make commissions
telling clients to put their money into their pillows this money naturally will gravitate back to the equity markets.
As more 'buy' orders come in than 'sell' orders prices will go up even if no one can think of a good reason for them to do
so.
Since bond prices have nowhere to go but down for the forseeable future there is almost no where
for equities to go but up. If you have been sitting on your assets throughout the first four months of this bull
market don't worry: this bubble can't burst - there is nowhere for the money to go from here.
