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-- There was look at the yield on the ten year treasury why do we care of -- -- as well the whole worry it's up just a little -- it was at a fourteen month high yesterday.
Worries about win the Federal Reserve here in the US will let money get more expensive.
Cindy assets around the world into a tailspin.
That does bonds but stocks currencies you name that.
Yesterday it was hard -- and somewhere to hide.
Where's Bob I'll order -- nowhere.
He's the vanguard and he's right here he runs fixing -- at vanguard he oversees 735.
Billion dollars in money market and bond assets.
Good to see you -- -- Ingraham Waldman at Bob.
Was there anywhere there was safe yesterday and is this is this what we're going to be seeing for months if not years the com.
And -- wasn't any place safe yesterday and normally when you have a lot of volatility in the in the markets where.
Equities and corporate spreads wide equities trade off you have a safe haven bid for treasuries and for.
German and French bonds he did not have that yesterday who was student body right everybody was just trying to get -- Regardless of what they -- yesterday.
At least in the in the morning created a tremendous amount of volatility there was not a buyer of last resort early on.
And is it all related to what the Federal Reserve will do with this bond buying program and how high the Federal Reserve will let longer term interest rates get.
I think that's related to that because the -- pay -- -- assumes that the Federal Reserve is going to keep policy the same.
I think the market -- really gotten ahead of itself in terms of when the Fed is gonna start to reduce or tape murder quantitative easing.
Because at this point we still have fairly mediocre labor market growth and they have.
They have stated time and time again that is -- going to be the proud owner that they are going to look at and the absence of inflation and we don't have inflation.
G-20 think the baucus.
The market would have to acknowledge what you think about the Fed in order for the volatility -- the eighties what happened maybe during the summer.
I I think the market will will gradually settle down but everybody's on night age right now be coups investor flows in mutual funds in the small retail investor.
This scared right now.
And when you stay in that era -- where were so we're tough we're seeing outflows and we noted our competitors are seeing them.
And in that situation Wall Street says won't go I wanna position the bonds and -- one so they back their bids off which creates more more volatility -- Are you seeing out across all types of your bond funds are you seeing.
And flow of money out of them is it going in the stocks where's it going.
A lot of is actually gone back and or money market funds in -- -- the incredibly low yields right now.
That -- Bob that's absolutely incredible -- him.
At what what bit -- say do you think what is the money they're going debate.
On Wall Street to provide liquidity at all in the market and might as -- managing this much money did you how are you got him.
Basically get your arms around that.
Well he used structured portfolios in a way did you have a fair amount old.
What you hope is more liquid assets in a normal market.
You know at the end of -- -- If people aren't but nobody's buying anything -- -- markets just lock up and freeze like kid you had yesterday.
-- -- fall 2008 but I don't think we're anywhere.
Close -- and ask you do you think it where.
-- it the beginning or it didn't you we could see some sort of crisis related to significantly higher interest rates.
And it's it's something that we're gonna have to watch pretty close would be coups of the Wall Street its size and its ability position bonds' role to the -- -- market has steadily declined over.
The last five years so.
Who -- is going to be that buyer of last resort now we do get a a movement upward in rates where you Macy's like insurance companies I was gonna ask you about the life assurance cause normally they're they're they're not buyers right now are now they've been stepping back -- the same time.
-- order to fund a lot of products that they sell.
Higher interest rates is something that they really need -- -- and really suffering with this low interest rate environment.
Now questions how long you gonna wait there's bulls bears and -- so you have to be careful what you -- bit.
Really quickly what do you like right now is there anything that you feel supremely confident about owning.
Supremely confident that's that's a tough one IE I still -- -- -- -- -- -- yeah hi guys -- -- I still like.
Investment very corporate bonds and Munis -- -- up firm around and when you look at them -- an after tax basis there one more attractive items out there right.
It was great to see -- person -- -- come back more often you're just too bright young -- in Pennsylvania spent.
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