5 comments on “Bond Market Bubble

  1. > The world is just a less risky place these days.

    That sure isn’t what it looks like to me. (Even pre-covid.) Is that just me?

  2. Bruce, you’re presumably paying attention to different things than the typical professional investor.

    Recessions have been less frequent recently. Australia has gone 29(?) years without one, and China’s growth has been about as steady as that. It seems likely that that’s in part due to better monetary policy, and that US monetary policy has had milder improvements of the same nature.

    Wars have become less frequent.

    Virtually all diseases that investors think of as preventable were kept from causing much harm, presumably by competent experts: Ebola, SARS, the 1976 swine flu outbreak, various bird flus all seem to have been stopped from spreading in the US. The 2009 swine flu pandemic didn’t cause enough harm to have an obvious effect on the market. I forget what happened with the MRSA super bugs that we’re occasionally warned about.

    Diabetes, heart disease, and Alzheimer’s don’t get counted because few investors notice that there are societies that are virtually free of those epidemics, and they’re not changing enough to cause stock market volatility.

    I think that covers most of the problems that have caused stock market declines over the past century or so. That obviously doesn’t produce a perfect model, but it usually works well.

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