(USTs lower and flatter on below avg volumes) while WE slept; irrational exuberance.
thebondbeat.substack.com
Good morning … Happy Irrational Exuberance anniversary! … Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?
(USTs lower and flatter on below avg volumes) while WE slept; irrational exuberance.
(USTs lower and flatter on below avg volumes…
(USTs lower and flatter on below avg volumes) while WE slept; irrational exuberance.
Good morning … Happy Irrational Exuberance anniversary! … Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?