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comment by ThurberMingus
ThurberMingus  ·  2769 days ago  ·  link  ·    ·  parent  ·  post: Low Volatility and the Risks of Crowded Trades

Beyond the basics of interest rates, I don't know enough to sort good information from people just finding whichever conclusion they want to.

Interest rates have stayed near zero for 10 years because the economy hasn't "heated up" enough to make the fed raise it. I think they want to wait until inflation gets a little higher before raising more. Inflation is often the result of too-low rates, but inflation has been really low the past 10 years, proving a bunch of warnings wrong.

There are tons of simple explanations that X caused a slow recovery and Y is the sure-fire fix.

The only simple explanation that made much sense to me is that a financial crisis is the worst kind of crisis, because the loss of trust in the system as recovery. That explanation doesn't come with a solution though.

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So we've got divergence of expectation and outcome, and dark omens of volitility in the last few months. It's possible for pressure to bleed of slowly or pop with a bang. Or pressure could keep building for longer than anyone expects. If it pops, rates don't have a lot of room to go down, but quantitative easing is an option too.





blackbootz  ·  2768 days ago  ·  link  ·  

    I don't know enough to sort good information from people just finding whichever conclusion they want to.

You said it.