Jim Cramer announced on CNBC that the 30-year Treasury yield is driving stocks. The yield hit 5.3%. This counts as analysis now.
Bonds and stocks move in relation to each other. They have done this since the invention of bonds. Cramer has worked in finance for four decades. He just noticed.
Somewhere a retail trader is now googling "what is a Treasury yield" and immediately buying calls on TLT because a man on television said words near the phrase "key force." That trader will lose money. The bond market will not send a card.
The 30-year yield climbs when investors demand higher returns for lending the government money for three decades. This affects discount rates. Discount rates affect stock valuations. None of this is new information. None of this required a television segment.
Cramer could have said "rates up, stocks react" and gone to commercial. Instead he identified this as *the* key force, as if yields existed in a vacuum, as if the Fed wasn't hiking, as if inflation wasn't a thing, as if global macro conditions were just a minor footnote to his personal bond market revelation.
The 30-year has been climbing for months. Charts show this. Anyone with internet access knew this before Cramer's broadcast. The key force driving stocks right now is the same key force that has driven stocks for the entire history of capital markets: the collective delusion that someone on TV knows what happens next.
Cramer gets paid to fill airtime between commercials for erectile dysfunction pills and leveraged ETFs. He filled it by reading bond yields off a screen and calling it a key force. Tomorrow he'll read a different number and call that a key force too, and retail traders will lose money on both.
Photo by Charles Causse on Unsplash
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