Artis Real Estate Investment Pref Shs Series E T.AX.PR.E

4.5% to 5% 10 year?

[garyreins]

I don't think so.  That's just as bad tightening as the overnight rate given lots of financing is fixed.  The traders are doing the back and forth whips which overshoot in both directions.  

Economy and inflation was just fine under trump.  It's not going to become mad max when he gets in.  Plus it'll take years to enact some tariffs etc.

[DZtrader]

.............this coming from someone who changes positions by the end of their sentence. If you get a red sweep, there will be little doubt the ten year revisits 5+. Trump can blow all he wants he will not be able to prevent the bond market from doing it's thing, yeilds WILL rise and you would be quite foolish to position otherwise. 

[garyreins]

Ok.  Why didn't this happen 2016 to 2019?

[Torontojay]

If Nominal gdp is =~ 5.6% then why couldn't the 10 year reach 5%+ ?  2% inflation and 3% real gdp or,  2.5% inflation and 2.5% real gdp gives us a 10 year priced at around 5%. That's not at all far fetched.  This is one of the reasons why I preferred t-bills because the long term is so uncertain given the large fiscal deficits.   

[garyreins]

Why couldnt the 10 year reach 5%? Because of the 35 trillion in debt, because it was mean higher mortgage rates, because it would collapse emerging markets. Just look at the post GFC yields and now think the we'll be 5% for a decade...debt to GDP.  Theres no going back.  Sure it can get to 5% on a "trade" but then it went from 5% to 3.80% in under 3 months..

[Torontojay]

Your argument is not sound. When you have a lot of debt, the way you pay for it is with higher inflation. Debt is fixed remember that. The government collects more in taxes and old debt gets paid off. It's a vicious cycle that allows you to service existing debt through higher inflation. At some point the system cracks which is what we used to call in the old days, the boom and bust cycle

[jmkOttawa]

Quite true unfortunately.  The other thing that is significant is that inflation will eventually lead to higher asset prices and investment grade real estate will be a natural benefactor of this. Including REITs.