Bear’s Crosshairs Are Trained On Boomers

by Rick Ackerman

In the latest update to the Rick’s Picks home page, I’ve revised an interest rate forecast for the 30-year bond to — better sit down for this — 0.73%. This is an implied recession/depression away from the current 1.60%, so you may want to jot the new number down. I got a wake-up call on this from my friend Doug Behnfield, whose name will be familiar to anyone who has followed Rick’s Picks for a while. Doug, a Boulder-based financial advisor at Morgan Stanley, is not only the smartest investor I know, he is one of the smartest guys. He’s been loaded to the gills with muni bonds, among other investables, and is having the kind of year with them that even Soros or Buffett would envy. Doug called this afternoon to ask about the 1.58% interest rate target I’d proffered a while ago for the 30-Year T-Bond. I had thought this number would correspond to a still unachieved 186^04 target in the futures contract, but I was way off. This discrepancy aside, how confident am I that long-term rates will fall to 0.73%? Very.

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