In this environment, what are people doing?
I think that most institutions here that are required to have little risk with their cash are simply doing what everyone else is doing, which is accepting the total lack of yield as a given. They know that only through creating some real growth can they generate returns and they aren't going to get returns on their money without taking on some real risk.
I think that most institutions there regard their fixed-income instruments as very risky and are keeping the pressure on the yields of our risk-free assets by continuing to buy our bonds.
Yesterday someone asked me if there was anything really compelling in the equity market. I said I can understand why people would feel the answer is no. But when you consider the stories of the two bond markets, you have to admit that a U.S. company with real growth or with a real yield is a total bargain vs. all of this fixed-income nonsense and when you have one with both, then you have the holy grail of the moment. In fact, it's amazing that there are any at all and yet there are still hundreds of good growth stocks with good yields to be found.
That's why it is so darned hard for this market to go down and stay down. It remains, when you look at the fixed income world, a saner more investable place. Not safer, because these are riskier assets, but certainly saner when you think about it.Editor's Note: This article was originally published at 6:04 a.m. EDT on Real Money on Sept. 4.