The Big Bang (as in Bust) Theory of Markets

The Big Bang (as in Bust) Theory of Markets



Here is an outstanding article at Global Economic Intersection about how stocks and bonds have moved upward together as well as downward during the past several years.  The article has an excellent bond price chart which shows how bonds have followed stocks.  The beginning of the chart shows the decline of bonds just like stocks at the start of 2009.  August of 2011 on the chart shows that bonds went down along with stocks during the great Congress lock-down over raising the country's debt ceiling.  Then, after that, stocks and bonds have marched upward with no significant declines during the past three and a half years.  In the next bear market, however, cash may be king instead of bonds since they are bound to go down like stocks at some point in the future.