by Rick Ackerman
The tedious price action that ended Wall Street’s week paradoxically left denizens of the Rick’s Picks chat room as keyed up as I’ve seen them in a long while. Opinion seemed evenly divided on the question of whether stocks are about to blast off into hyperspace, or tumble into a deflationary abyss as deep and destructive as the 1930s Depression. I cast my vote resolutely with the latter, although I would have to concede that a blowoff spike sending the Dow Industrials above 20,000 is at least theoretically possible. For where else is an investor, or a dot-com company with a mountain of idle capital, to turn with yields on 40-year bonds heading toward 2% or lower, and returns on shorter-term paper at zero and sinking? This poses quite a problem for the leviathans of the investment world — pension funds and insurance companies in particular, since they are on the hook to pay out sums in the future that will overwhelm today’s meager returns.