TE 3
What is the situation: bull market in everything
bull market in everything
Why is it a source of anxiety
How: be cautious
Benjamin's "margin of safety" theory is worth heeding in troubled world
Bond market, creditors require little insurance
Property prices tower so high
Stock market, S&P 500 higher, even than during the two bubbles
Craze for exotica, e.g. cryptocurrencies
The price paid for a stock or a bond should allow for human error, bad luck or, indeed, many things going wrong at once.
booms are in the backdrop of loose monetary policy which government wants to unwind now
fund managers are becoming increasingly incautious
raise interest rates
see bondholdings
willingness to buy Eurobonds
Why is the price rising
low long-term interest rates
improving economy
policies of the Fed
rise in supply of saving and fall in demand of it
A better option: gradualism
A even more important option
A option: central banks raise rates more enthusiastically and less predictably