Saturday, November 09, 2013
Bill Fleckenstein Blasts "The Price Of Everything Is Out Of Whack"
...But he says the Fed is starting to lose control already - meaning that stocks could crack even if the Fed continues to buy $85 billion worth of assets each month.
"Interest rates on the 10-year bonds have risen 100 basis points since last spring, and there's still no tapering," Fleckenstein noted.
"So why have bond rates risen? I think the Fed is no longer able to dictate where the bond market is going to trade. If that's the case - and I say 'if' - then the game is going to change prospectively, because if the Fed loses control of the bond market, it's not going to be able to have unilateral say in where assets trade."
Specifically, Fleckenstein is watching the 3-percent level on the 10-year yield very closely.
Hoosier's note: About 20 years ago, it was said that the Stock Market will only crack if the 10-year yield hits 6.8%!