There’s some talk of the idea that maybe we should discount the current low interest rates on US government debt because, hey, speculative bubbles happen. I don’t really know how you could prove that one way or another, but I asked Ryan to take a look at the comparative volatility of long-term interest rates and the stock market and the result was a chart too wide to display in this blog so you’d better click the link.
Long story short, historically interest rates have swung around less than the S&P 500, but during the crisis period that hasn’t been the case. I don’t really have a suggested interpretation of that, but I thought I might as well throw it out there.
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