us banks smashed, page-7

Just been doing some history studies which was quite iluminating...

As we all know, the USD has fallen 20% + against all major currencies and in the past six weeks the 30 year bond yield has increased by nearly 30% (from 4.2% to 5.4%) and, despite these movements, the stock market has continued to rally / maintained its strength.

So I started to look for any time in history that had similar characteristics to today - when the USD was falling against all major currencies and when the 30 year bond yield increased to see how the stock market reacted. I found such a time and it may be quite illuminating....

In 1987 (yes 1987!!) the USD was declining by a similar amount as today and interest rates increased by 40% (from 7% to nearly 10%) over about a four month period - initially, despite these events, the markets continued to rally from 2,000 to 2,700 - that was in February to August 1987!!

As we all know, the markets suddenly woke up to the realities and impacts of these movements and started to wane from August culminating in a spectacular sell-off in October 1987.

I am not saying that this will happen now, but just found it interesting that the closest parallel I could find to today was 1987.

Regards,

Jaysee