Kondratieff cycle

Stocks vs. Bonds in Kondratieff Autumn vs. Winter

Andy Bebut, a/k/a Theroxylandr, has this post at his blog describing an important relationship between stocks and bonds:

Back in 2007 I was writing that during the Kondratieff Spring, Summer and Autumn Treasury bonds and stocks are trading generally in the same direction, with bonds leading. During the Winter they are trading in opposite direction.

Andy's full blog is as always well worth reading, but I wanted to elaborate on the important difference in how stocks and bonds have behaved during the last 10+ years, vs. how they behaved during the great bull market of the 1980s and 1990s.

1946! Interest rates, inflation, and war

I'm not a trader, and I don't put much faith in short term charts the likes of which you typically see in financial porn. Longer term charts, however, are more interesting. It is much easier to separate the signal (or trend) from the noise, and the "trend" is a reflection of the economic psychology of the public. Not just that part of the public that invests, but the public who buys houses and has mortgages, buys cars and retail and pays on credit, or even saves in CDs and money market accounts. In short, just about everybody.