Happily wearing my fish hat.......clowns.
Oops...I meant clown hat fishes.
Happily wearing my fish hat.......clowns.
Oops...I meant clown hat fishes.
In addition to the Fed causing capital into the US stock market for a few years, optimism over the election and tax bill, this piece on the influence of the Bond market and rising rates:
Before the Bell
Why the bond market is freaking out Wall Street
by Matt Egan and Danielle Wiener-Bronner @CNNMoneyInvestFebruary 11, 2018: 9:28 AM ET
1. Blame the bonds: The normally boring bond market is causing serious drama on Wall Street.
An avalanche of selling sent the Dow and S&P 500 careening 5% lower last week, one of the stock market's worst weeks since the 2008 financial crisis.
The culprit: Rapidly rising bond yields are alarming investors who got hooked on a decade of low interest rates.
So what's going on here? And why the focus on the bond market?
Modern financial markets function on the belief that U.S. government debt is the safest investment on the planet.
Knowing how much they can earn from "risk-free" Treasury bonds allows investors to determine the cost of stocks and other riskier assets. Treasuries serve as the benchmark for all other forms of credit, from junk bonds to mortgages.
"The 10-year Treasury sets the price for every asset in the world," said Brent Schutte, chief investment strategist at Northwestern Mutual.
That means the surge in the 10-year yield — from 2.4% earlier this year to about 2.8% now -- has increased the cost of money generally.
https://teakdoor.com/images/imported/2018/02/783.jpgPowered by SmartAsset.com
SMARTASSET.COM
Investors fear that if rates continue to spike, the stock market won't look like such a bargain anymore. When interest rates are low, investors are willing to pay up for stocks -- and vice versa.
"Bonds and stocks are absolutely connected at the hip,"
http://money.cnn.com/2018/02/11/inve...index.htmlsaid Schutte.
Wall Street's attention is now turning to tonight's (our time) all-important inflation numbers.
Fears of rising inflation and the potential for faster interest rate rises sparked the recent market turbulence.
At a ceremonial swearing-in ceremony, new Federal Reserve chairman Jerome Powell reinforced the central bank's
intention to "gradually" raise interest rates.
"We are in the process of gradually normalising both interest rate policy and our balance sheet," he said.
"We will remain alert to any developing risks to financial stability."Meanwhile, Cleveland Fed president Loretta Mester played down concerns over the volatility in remarks overnight.
"While a deeper and more persistent drop in equity markets could dash confidence and lead to a pullback in risk-taking and
spending, the movements we have seen are far away from this scenario," she said.
Here
So, if inflation comes in above expectations which imply more rate rises and the market will continue to fall.
So, if inflation comes in below expectations which imply (maybe) less rate rises and the market will continue to rally.
Spot on on the Inflation number ... flip a coin.
^ Inflation "ooh-awe" is higher than "expected."
I lllooovve these "expectations......"
Consumer prices jump much more than forecast, sparking inflation fears
- The Consumer Price Index, a key indicator of inflation trends, jumped 0.5 percent in January, well above market expectations.
- Markets reacted sharply to the news, with stocks sliding and government bond yields rising.
- The Fed is watching inflation closely, so the report could add fuel to interest rate hikes.
Jeff Cox | @JeffCoxCNBCcom
Published 2 Hours Ago Updated 35 Mins Ago
https://www.cnbc.com/2018/02/14/us-c...-jan-2018.html
Rising Debt + Rising Rates
https://northmantrader.com/2018/02/1...-rising-rates/Quote:
Indeed rising interest payments will represent the fastest growth line item in the US budget:
“Interest On The Debt Will Be The Fastest Growing Part Of The Federal Budget…By Far. Forget Medicare, Social Security and the Pentagon: $1 trillion-plus deficits means massive increases in the national debt and that debt will have to be borrowed at higher interest rates (see #1). Add the need for the Treasury to roll-over existing debt at higher and higher rates and you get an immediate increase in the amount the U.S. will need to spend on interest each year.”
^Got that link from this:
What Changed On September 8, 2017? - Craig Hemke
https://www.sprottmoney.com/Blog/wha...-13-22018.html
Good luck with that...Quote:
And so: what happened on September 8?
We've asked this question repeatedly, and now we know we've had the answer all along. Our first inclination was that the Oval Office meeting between Trump, Pelosi and Schumer had changed the prevailing dynamic. As it turns out, we were right. Here's a list of links if you need a refresher:
- http://www.businessinsider.com/trump-debt-ceiling-...
- https://www.washingtonpost.com/opinions/schumer-an...
- https://www.nbcnews.com/politics/white-house/insid...
It was this September 7 meeting that changed everything, and the action in the US bond market since then confirms it. There will be no more charade of "fiscal discipline": the US will cut taxes and raise spending, the future be damned.
We see confirmation in a collection of this week's headlines. The imaginary debt ceiling is being done away with. Trump has already signed a massive tax cut and is about to unveil $1.7T in new infrastructure spending.
- https://www.zerohedge.com/news/2018-02-11/trumps-b...
- https://www.zerohedge.com/news/2018-02-12/us-launc...
- https://www.bloomberg.com/news/articles/2018-02-12...
In short, the US debt and deficit is about to balloon, likely exceeding $1T in this fiscal year and soaring past $1T in 2019 ... and these levels will only be this "small" IF the US avoids falling into recession.
SKKin artice snippet:
Quote:
Indeed rising interest payments will represent the fastest growth line item in the US budget:
“Interest On The Debt Will Be The Fastest Growing Part Of The Federal Budget…By Far
Indeed.
And they cannot kick the can down the road forever.
The politicians and public have their heads up their asses.
Nothing new.
^ and no surprise. Raycarey redded me for this comment.
Ray, I assume you disagree?
Time to buy DUK and or Southern Co. Both off 10% and Duke pays over 3usd div per share. If you had about 10000 shares you'd make in div what an average high school professor makes in LOS and you'd have the whole year off.
Just imagine that for a second. Who wouldn't like that? Sure other higher div payers but nothing beats the relative safety of a solid utility.3.56 per share actually .
A big outcry from various groups now that the tax rate is way lower so expect rate payers to get a slight break. But you can bet your ass the stockholders will get a good jolt.It's the big players on the board and all the politicians that hold huge, yes that's Trump talk, HUGE steaks in theses companies.
That's just my two cents worth, wouldn't want you to miss the boat. These guys love to pat each other on the back and raise the divs and say it's all good year after year sighting record profits and expanding customer bases.
Just saying it like it is...........a fish is a fish no matter how you slice it.
Or just get some Nipple or other alt coin. Many folk lining up for those moon shots. If you think about it the whole thing, stocks and coins have all been a well orchestrated pump-and-dump as of late with those in the know making out like bandits.
Bit Connect!!!!!!
How many of you would root Delilah?
https://www.youtube.com/watch?v=rWxVwTVU15Q
Why? Why? Why?
She seems even-keeled and is doing what she wants to do in life.Quote:
Originally Posted by YourDaddy
She's young. She can do that. Well, do it more easily than an older person.
Not sure why this is in this thread, though. But anyway, I'm glad I watched it.
Side note: I used to live off of La Brea Ave., in Hollywood.
At 76 US$/share 3.65 a year divi is approx 5%/year does that cover the loss due to:Quote:
Originally Posted by fishlocker
1. Inflation (-10%)
2. US$ depreciation (10%) DXY 100.95 > 89.1
3. Capital loss (-3.5%) DUC 78.36 > 76.70
4. US taxes
https://www.fool.com/taxes/2017/12/2...s-in-2018.aspx
Finally a pro on a list of marriage cons. Keep it under 38k and no fed taxed. If in a Roth no taxes on qualified distributions.
If inflation is your fear just buy gold, and hide it somewhere safe and pray no one sees you. Or get some bitcoin and HODL.
The point is could you live well today on 35k usd today in smileland. My thought would be yes if you live very frugally.
MEQuote:
Originally Posted by YourDaddy
Then point her north
Snubs my have a spot in Seattle. :cmn:
Offering a helping hand maybe more useful.Quote:
Originally Posted by YourDaddy
Analysis
1/3
Why market volatility will return
So, what was all that about?
Chaotic selling, panicked investors and a shrill media blaring out an ever rising tally of trillions as global markets tanked.
And then, after a quick dust-off, it was as if nothing had happened.
Wall Street last week managed to pile on about 4 per cent, leaving its total losses from the meltdown — which briefly
placed it in correction mode — at about 7 per cent.
If you find that perplexing, consider this. The catalyst for the sudden rush to the exits a fortnight ago was a sudden
spike in American wages growth.
That sparked fears US inflation may be not just gathering steam, but rising at a much quicker pace than previously
expected which, in turn, would lead interest rate hikes at a much faster clip.
Not everyone was convinced. Some argued the wages data had been skewed by the unseasonably cold winter and
cautioned that the full picture would not be clear until the inflation numbers were released.
That clearer picture was unveiled midway through last week.
And guess what? The story those numbers told confirmed investors' worst fears.
After years of tepid growth, American inflation was well underway, coming in stronger on every measure than anticipated.
Rather than hit sell buttons, however, the collective euphoria that has driven US stock prices into the stratosphere in recent
years suddenly kicked back into gear. :eek13:
Even more confusing, the US dollar defied logic and went into reverse.
This article is over 3 posts for readability
Analysis
2/3
Is it over? Not by the hair on my chinny chin chin.
So, is that the end of the rout? :dunno:
... Not by a long way.
For the first time in a generation, global markets are about to experience a prolonged bout of rising rather than falling inflation.
Almost no-one on the trading floors of major investment banks has ever experienced this.
And as interest rates rise to more "normal" levels, stock markets — artificially buoyed by a decade of emergency monetary
policy — will be forced to readjust.
Wall Street has risen an incredible 300 per cent from its financial crisis nadir.
It leapt 88 per cent from its pre-crisis peak.
The instability and volatility we witnessed a fortnight ago is likely to become a more regular feature.
Markets tend to grind higher over a long period.
The readjustments tend to be sudden and severe.
Analysis
3/3
The 'bondcano' resumes
Those inflation numbers (above), however, weren't completely ignored.
Bond traders pushed market interest rates to their highest level in four years last Thursday to a whisker under 3 per cent.
In fact, for the first time in 18 years, US market interest rates now are higher than Australia's.
In terms of media coverage, bond markets tend to fly very much under the radar.
But in many respects, they are a much better forward indicator for the economy.
And what they are saying right now is that US interest rates, in the short term at least, are due to go substantially higher.
That's not surprising. For 37 years, interest rates have been grinding lower.
In 1981, the US 10-year bond rate stood at an eye-watering 15.3 per cent on global markets.
By July 2016, investors were prepared to accept just 1.5 per cent.
For almost four decades, bond traders have been on a one way ride as yields dropped.
China helped quell global inflation by flooding the world with cheap manufactured goods.
Central banks, meanwhile, flooded the world with cheap cash as they attempted to heal the
wounds from the ever increasing cycle of financial crises.
Here
https://teakdoor.com/attachment.php?a...tid=8795&stc=1
From Friday's trade
Wow...
Meet the one guy who’s happy about the wild swings in the stock market
https://www.washingtonpost.com/busin...=.80b629241d8d
https://teakdoor.com/images/imported/...eeiikdcuiefjnq
How about that "investors?"Quote:
Q: Do you own stock?
A: I have never owned a share of stock in my life. I do not eat my own cooking. Funny thing about money. If I started to worry about my own profit and loss, I would be less concentrated on my customers’ well-being.
And I also have two children in college, so I don’t have any money to buy stocks.
Stock market joke...
"Famous celebrity is hanging out with his stock broker, strolling around a New York harbor. His broker is showing off all the yachts of brokers like himself. Celebrity says, "Yes, I see. But where are all the customer's yachts?""
Is the danger of a extended market decline over?
A 'double bottom' followed by higher lows and higher highs
https://teakdoor.com/attachment.php?a...id=14681&stc=1