Suncor Energy Inc. T.SU

Is the sky really falling?

[Obscure1]

5 year fixed mortgages at TD are currently 2.85%

5 year variable closed mortgages are currently at 1.55%.  With a variable closed mortgage, the payments get fixed at a dollar value based upon prevailing rates, but if rates go up, higher interest costs accumulated over the life of the loan get added to the principle.  Sorry if I'm wasting your time with this paragraph.

Currently, the Fed rate is 0.25%.  Ten year US treasuries currently yield 1.77%

Let's assume rates go up 1% in 2022 as Powell "clamps down on inflation".  

How woud a Fed rate of 1.25% stack up against history?  The Fed rate has averaged 5.47% over the last 50 years (1971 to 2021) and yet somehow, we managed to survive. 

I know, the rules are different now as the world has plunged into a black hole of debt. 

But, would you stop investing in Suncor or Enbridge or the banks to put your money into 10 years treasuries, even if the yield increased up to 3%?  Perhaps, but only if you thought the market was going to crash. 

So the real question, is do the politicos want the stock markets to crash and stay down through a prolonged depression?  If that happens, "all new politicos". 

I don't need SU (or ENB, TD, BCE etc) to grow like TSLA or SHOP.  I just need the world to survive and keep on keeping on.  Sure, there are going to be trying days in the markets just like there are in any household or relationship, but I don't think the sky is falling....yet :)

[Experienced]

I won't go into a discussion of whether the sky is or will fall in as anyone who has read my posts knows my opinion on the subject. That said, I will offer my opinion on a couple of your points. 1....In the valuation of the overall market of there is a relationship between the 10 year treasury rate and the overall market P/E ratio.  As interest rates go up, the market P/E ratio declines

[Chad123]

The sky is not falling unless the FED has made a policy mistake. We will not know until we know. We will know more as time goes on but for now the sky is still BLUE!!!

[Experienced]

It is often useful to look to the horizon to see what's coming.

[Abruzz0]

Well said, Experienced. Today, the horizon looks promising! 

[Chad123]

Absolutely. Just sayin what the markets are sayin....for today. Oh yeah, almost forgot. Another 52 week high today. WTI over $80, WCS over $68, very very interesting. Cheers!

[mrbb]

the market is an emotional hotpot and react to what Powell says, i rather watches what he DOES.

[LiLy2021]

Obscure, TD is offering bank prime -1.34 for 5 year variable closed mortgage. I know because I just renew for one of my rental properties. Nobody should be paying 1.55% for a mortgage these days. That's highway robbery. :-D. The biggest mistake I made in personal finance was to deleverage too early.  The sky is not falling and it will remain blue and clear for as long as the rate of

[Experienced]

I agree that negative real interest rates are stimulative and that combined with outsized deficit financing by Governments make for record stock market prices.  This is basic economics. Where I disagree with you is the statement that I highlighted.  In your post you said you heard about the high interest rates in the early 1980s.  Well I actually lived through that period as a home

[alvarez2]

Good post and I agree with your assessment of where things are at today. Timing is difficult however as it's better to be in the market early than late the same holds true for planning the exit.

[mrbb]

here is a famous quote "More money has been lost by investors preparing for Corrections or trying to anticipate Corrections, than has been lost in Corrections themselves":  Peter Lynch. here is another one but i forgot who said that Economists have correctly predicted 21 of the last three recessions. ;)

[jx7000]

"Knowing when the sheet will hit the fan"  is the scary part, vis-a-vis Black Monday (1987). Nobody could get through to their brokers. With today's supercomputers in existence, the Indices could fall maybe twice as fast as back then before you know it. Fortunately, I being a procrastinator, managed to watch from the sidelines back then.

[NPCexe]

Hahah, well it still needs that Viagra because it's not playing catchup, it is just moving along with the market. Should be going higher than its peers on a good day if we are to see any effects of a catching up. But you are right, we will get there one way or another