Jim Grant – Honey I Shrunk the Yield Curve
Grant is always interesting to listen to and some of his observations include:
- He compares the bond bulls of today with the bond bears of the early 80s (when rates were extremely high). He thinks that at both points in time people were conditioned to believe that bonds could only move in one direction.
- In the early 80s bond yields had been rising since 1946. Today we have 30 years of shrinking yields.
- In the early 80s investors thought inflation was always enemy no. 1. Today we have no inflation concerns.
- Imagine having equity-like returns through guaranteed interest rates through bonds. In the early 80s investors had this but did not care because interest rates had always gone higher (in their experience).