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Subject:  Re: REIT Preferred Pricing Anomalies Date:  2/23/2020  10:47 AM
Author:  Kingran Number:  85579 of 86821

Do I get an "yes-you-told-us-so" from any old timers on this board?...
See post 80497 (2016) for example

So I have read your posts in that thread..

On post 80452

If the Fed would cut rates and promise to keep them down, then the market would expect a vigorous economic expansion and revival of inflation and revival of demand for capital, with the result that long term bond prices would fall (long rates would rise) and preferreds would follow long bonds (prices would drop, yields would rise).

Your thesis if Fed cut rates and keep it down, long-term yield will raise didn't happen, actually opposite had happened, we are having the absolute low yield on the long-term treasuries. WRONG.

I predicted Quantitative Easing starting would have little effect and stopping would have little effect and I was right.

Again, totally wrong. Fed QE started the bull market. When they started shrinking the balance sheet the market went nowhere. Again, in the name of intervention in REPO market, fed pumped $500 B and on cue market started having this great bull run. BTW, it is not just for bull market, you can see the same is true for long-term bonds' too. The bond prices rose and the yield went down along with Fed action.


The long bond market is too massively huge, too liquid, too global and too enmeshed in the closely related markets for all kinds of long-dated assets for Fed action to directly move it just through adding or subtracting its incremental demand for long securities.

In short, your argument is bond market is too big Fed's incremental actions cannot influence. In fact, the taper tantrum of 2013 should have demonstrated your statement is wrong. Recently, when Fed was shrinking its balance sheet and raising rates, the UST rates also went up and along with the cut and repo liquidity injection, you are having all time low in long-term interest rates or high in bond prices.

Again your statements are not supported by the facts and market reality. WRONG.

Your predictions and how economic forces are going to work are completely wrong. Your let us lock-in the rates now, ended up being correct. Your process, and the reason are wrong just the conclusion you drawn ended up correct, is just a happenstance, not a product of your process.

I mean at the end who cares about being right and wrong, as long as you got what you desired. So congratulations you were able to lock-in those 5% yields.
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