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It’s a Super Bowl week in the markets, with so much on the line ahead of the Federal Reserve meeting. But between now and then, we’re seeing an interesting battle shaping up for the markets.
On the one hand, you have Apple Inc. (AAPL) claiming it generated strong pre-orders for its new iPhone 6S models. The phones don’t actually ship until Sept. 25. But Apple said it’s on pace to top the 10-million-unit rate of initial weekend sales for its original iPhone 6 and 6 Plus models.
The company rolled the 6S models out last week at a San Francisco event, and many analysts (myself included) seemed underwhelmed. An upgraded camera, “3D touch” screen technology, and a few other features didn’t seem to excite many people beyond the devoted faithful.
It’s worth noting that Apple always uses breathtaking and over-the-top language to describe its product features and market response, and that it didn’t provide any concrete sales figures this time. So we really won’t know how the new phones performed until Apple’s next quarterly report.
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| Will the uncertainty with Chinese stocks move markets this week? Or will one of the multitude of other events be the catalyst? |
Meanwhile, Chinese stocks rolled over again last night after we got ugly economic data there. Growth of so-called “fixed asset” investment in things like real estate sank to its lowest level in 15 years, while production growth missed forecasts. We also saw fresh lows in select Asian currencies and Turkey.
Most importantly: The Bank for International Settlements (BIS) warned that emerging-market turmoil, a huge increase in global debt loads, rising loan defaults, and an end to the multi-year period of artificially suppressed interest rates could trigger a major financial crisis.
The BIS is the “central bank for central banks” so its words carry a significant amount of weight. The organization said China, Brazil and other major emerging markets may soon have banking and bad loan crises to deal with, on top of stock market and currency declines, and sovereign debt downgrades.
All of this suggests we still have significant worries about lousy overseas growth, tighter monetary conditions in the currency and bond markets and tumbling foreign stocks, Fed meeting or no Fed meeting. And we still have a few companies that are trying to buck the trend.
| “We still have significant worries about lousy overseas growth.” |
Will the bearish forces building overseas win this fight? Or will a handful of bullish companies give investors a reason to stick around? I’ve explained why I’m more worried about downside risk than missing some rip-roaring upside rally. But I’m interested in your take. Share it right away at the Money and Markets website because we don’t have much time before the Fed gathers for its fateful meeting.
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This is an incredibly important week from a policy and market perspective, and many of you weighed in ahead of it with your thoughts on major issues I’ve covered recently.
Reader Ted F. had this to say about the possible popping of a new technology stock bubble:
“The threat to the tech market may be having an effect on the California real estate market. Houses are suddenly not moving or are staying on the market a lot longer, and nobody seems to be looking.”
Reader Fred G. shared this view of the impact of possible banker “perp walks”:
“The crooked bankers might finally be going to jail because we have a different Attorney General, and an honest one. I think prosecution and jail may be the only way to save the world from total disaster. When there is corruption at the top, it seeps all the way down through the economy, and that is what was happening in America.”
When it comes to the Fed, Reader Tommr said he doubts Fed Chairman Janet Yellen will pull the trigger. His view: “The Fed will NOT raise interest rates any time soon! As I have said in the past, the Fed follows the market and not the other way around. Rates must first rise ‘on their own’ and then the Fed will adjust its targets. They have been trying to talk rates up for a long time without much success.”
As for trying to protect against stock market losses with hedging strategies, Reader Dr. Donnie S. said: “Every hedge has a cost, so before you decide to use, or if you already do hedging, you must ask yourself if the benefits received from it justify the expense. You’ve got to keep in mind the goal of hedging isn’t to make money, but to protect from losses.”
Thanks for adding your voices to the mix. If you didn’t get a chance to share over the weekend, just head on over to the Money and Markets website and do so now.
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Germany implemented partial border controls over the weekend, a move followed shortly afterward by Austria. The step is a reversal for the country, which previously promised to let thousands of refugees continue to stream into the country without passport checks and other hassles at its borders. It indicates that financial and political pressures are rising, and that Europe’s open border principals may be under serious threat.
While we wait to see IF the Federal Reserve will raise interest rates this week, the other key question is HOW will they do so? It’s not easy anymore because of all the changes to the credit markets over the past several years. This New York Times story shows the hoops the Fed will have to jump through to raise the cost of money if it finally pulls the trigger.
A private equity firm called Vista Equity Partners agreed to buy financial technology firm Solera Holdings (SLH) for $6.5 billion, including cash and assumed debt. That represents a premium of about 13% for the Westlake, Texas-based company.
What do you think about Europe’s move to clamp down on the flood of refugees heading there? How about the latest private equity deal, or the threat of a major emerging markets bank crisis? Let me know over at the website when you have a chance.
Until next time,
Mike Larson
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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Europe has war refugee problems, we have economic refugee problems. Both are very sad.
Is just me or does anyone remember the story of the “Trojan Horse”. Hopefully the Europeans will remember before it’s too late. I still have lots of family in Europe and the things I hear are extremely disturbing, and guess what, we are probably next. Even Ben Carson, hardly a right-wing lunatic, said we have to be very careful that Terrorists are not in with the Refugees.
Indeed! Seems most of those pushing their way into Europe are healthy young men that could be fighting.
If MY city or state or country were under attack by barbarians……I would fight to the death against them…..and I think most AMERICAN men, and indeed many AMERICAN women…would do the same.
ISIS has already stated that Europe/U.S. is their real target. This invasion could be one huge hoax to build a larger 5th column behind the lines prior to the real invasion.
All in all, Gold, Guns, and Ammo aint a bad back up plan.
Amen…!
How have we reached a point that 600,000 men 18 To 22 years of age crossing the border isn’t a cause for serious concern? I’m as humanitarian as the next person, but if this was a genuine refugee crisis it would be mostly women, children, and old folks, wouldn’t it? Jim
A VERY good point, Jim!
You can believe it or not,the child found on the beach,it was impossible, due to the time of death,weather,and tide,what does that leave,heartstrings,THe news hit you (shocking) job done.Propaganda,my friend.How many children under 2 get killed daily on US roads,1,5,10,50.I dont know.Where is the shock now.The muslim faith cannot comprimise,thier aim, change to muslim or be a infedal and be hated for the rest of THEIR lives.Have you seen the videos of refugees throwing food and water onto railways tracks.That must be a sign of a hungry and thirsty refugee,maybe you guys would like to take some,say 1 or 2 million.Now great Germany has closed their doors,shock dismay,now surely Merkel just had to know that would open the flood gates,with promises, for everyone,get real Merkel
Sorry I meant possible
David,
You may have studied the”Trojan Horse”, but you have missed the news of the past 40-50 years! The UK-France-Spain-Netherlands-Germany-US & others have had tremendous immigrant problems that long and more. As for the US, don’t know at all where you have been. Everyone I mean everyone sees this, including liberals (who will never admit to it). So now we have the fruits of “political correctness”. We are BEGINING to see where this is leading. Is it too late? That is the real question of the day. We and Europe have long gone past “be careful”.
If the implication here is correct, many of these “families” may ultimately end up in detention camps! That is normally what is done with the “enemy within”!
tomrr,
Emmm. “Enemy within”. Nuf said.
I think the World is in the midst of paying for its arrogance. China has learned its lesson and is changing for the better, many have been arrested and changes made.
This exodus of bombed People, has given Russia, the publicity, to move into Syria to protect its Mediterranean naval Base in Syria. Just as the Saudis protected the US naval Base in Berain.
I don’t know about that!? China is invading the offices of investment companies and businesses to take records to see who has sold stocks. If YOU have sold a stock….you could be in BIG TROUBLE and could be prison bound. For selling a stock!! Now think of that…would you be likely to ever buy another stock!!?? Not me!!
I think they are (once again) shooting themselves in the proverbial foot by scaring the hell out of all their investors. The Chinese have not learned SQUAT….in my opinion. Krugman worships at their altar but he is (again)….sadly mistaken.
Krugman aint sadly mistaken he’s just plain “stoopid”.
Krugman is an educated idiot…
And like the Chinese, don’t most alert Americans believe it’s about time to invade the offices of our elected representatives to see what the hell they’ve been doing while working on our dime…!
You don’t suppose there has been continued insider trading do you…? Oh, of course not…
“don’t most alert Americans believe it’s about time to invade the offices of our elected representatives to see what the hell they’ve been doing while working on our dime…!”h/t Dr. Donnie.
You got it Dr. Don.
This is clearly logical. There are going to be a lot of people who will never buy stocks again. There are people like that here in the US after being badly burned TWICE in less than six years!!
What a disaster, Mike. The war in Syria is pretty old. The conditions are terrible. No place to raise a child, right? The irresponsibility of these refugees won’t end there. They will keep on reproducing and we will keep on feeding them and they will continue to refuse assimilation until our countries will be changed forever, no longer safe havens for our citizens. Rich
Muslims are now fleeing to the hated Land of Infidels and free stuff.. Once there they will no doubt try to change the Land of Infidels to the Land of Allah. Much trouble ahead IMV. Maybe this is the Black Swan moment. no one anticipated. How long will free movement among the Euro countries hold up? Will this ultimately collapse the euro?
joan, you have a good point. Muslims seem to be largely better believers in their Book than Christians are in theirs. Muslims haven’t had as long to compare it with reality as
Christians have. They may have better luck at converting European doubters than missionaries have in the Islamic lands.
Good point. There really is an element of irony in Muslims fleeing into the arms of The Great Satan. The more I think about it the less sense it makes. Jim
The refugee problem that Europe has is the tip of the iceberg, unless some one can stop the ISIS it will only get worse, the West had better wake up soon and work out ways to stop the never ending supply of ammunition, and seemingly endless supply of Toyota trucks that the terrorists like to run around in, where does this equipment and heavy armour all come from, The West seems to burying it’s head in the sand, and pretending it is not their problem, maybe the refugee crisis will spur them on into doing a positive reaction to the crisis. Did we learn nothing from the second world war, about the supreme ideology of a few can infect a whole generation. As the late great Bill Hicks said We can put a bomb through a hole the size of a letter box, why cant we do that with food for the refugees.
Mike,
While everyone it seems are focused on the FED, are they that important? Particularly in light of a couple other ongoing situations. First, PRE- ipo’s, long the darlings of large investment banks, are showing up for offer quit a bit. Second, why are they and large US corporations sitting on bil-no trillions of dollars? What are they focused on. The FED?
Interest rates are not moving unless they go down…
The Fed has been talking up hiking hoping to spur purchasing before a rate hike…
It ain’t working Janet… So shut up, you are only spooking investors and corporations that want to hire but are afraid to…!
The only thing the Fed is moving are their lips, because any hike is gonna spell disaster for the market and the economy…!
Allowing individuals, refugees or not, who historically choose not to assimilate into the society they are crashing is an invitation to disaster.
exactly
Germans, Irish, Slavs, Italians and others had trouble assimilating into American society, but they made the effort and eventually did, and became accepted. it is a question whether most Muslims would be willing to make the effort. Shiites, possibly. Sunnis, I wonder.
There’s not a Muslim alive that is willing to assimilate into the American culture…
Their religious beliefs are counter to the Christian culture which is, despite gays and atheists, the accepted and normal culture for Americans.
It’s also a matter of determining right from wrong. The West believes the majority knows what’s right while the Muslims believe only God defines right and wrong. They will never accept the most basic premise of Western Culture. We already see demands for the imposition of Sharia Law wherever they have settled. Jim
Very true, Jim. And liberal Westerners want to give them the benefit of the doubt. It is time to set standards and if they can’t meet them, tell them KEEP OUT!
No matter what the Fed does this week, we are toast. This goes far behond the writing on the wall. It’s as though the horse is five lengths ahead at the race track when the rider shoots the horse, then tries to finish the race. We are sitting on a very dead horse. Anyone with a working brain is preparing at every level. The world is about to change, forever, for no other reason than our many welfare states are insupportable. We will find out, in a mad sad way, how stupid it was to not teach the people to fish.
J. Clark… You are so very perceptive about the precarious situation in the world…
I know when the consequences come home to American, there going to be great changes in the way we are governed… Count on it…!
WE are supposed to be the government, but we have let a bunch of career politicians take control. It is time to kick them out before one or a clique becomes dictator.
The refugees are coming from countries, where population growth exceeded the resources and the ability of their governments to handle it. The results are civil wars, religious wars, genocide and mass exodus. The Germans are going to regret opening the flood gates. For small countries like Hungary, Austria, Slovakia, this is an existential threat, based on their experience few centuries ago, as well as recent experience with immigrants in France and UK.
Mike are you that far out of touch with reality… The countries they are coming from are wealthy and can take care of the refugees…!
Those same countries, with their wealth and resources can kill-off the likes of ISIS if they want to…
They don’t…! They want to spread the hate of Islam far and wide with terrorists masquerading as refugees…!
Doc is right about the resources. You think we have a problem with our one per centers, theirs are completely out of control. The Saudis have $700 billion in the bank and no money for refugees? Please! Jim
None of the refugees come from Saudi Arabia, and they have no obligation to help out Syrians any more than we’re obliged to pay for people who want to leave Russia. (Let me know if you have trouble understanding the analogy.)
None of the refugees are from Europe either, but they are obligated? You are right, I don’t get it. Jim
It was the introduction of WESTERN medicine that let those countries overpopulate. It was WESTERN money that created the Saudi and other oil sheiks, and let them spread their radical Islam. Now we are seeing the result. It ain’t pretty.
Looks like one heck of a sweet con game for the banks, This from The New York Times article;
“One result is a banking system almost comically awash in money. In June 2008, banks had about $10.1 billion in their Fed accounts. The total is now $2.6 trillion. Picture all of the money in June 2008 as a single brick; the Fed has added 256 bricks of the same size. On top of that first brick, there is now a stack five stories tall.
Bank of America, for example, had $388 million in its Fed account at the end of June 2008. Seven years later, at the end of June 2015, it had $107 billion. The bank could double in size and double again and still have more reserves than it needs.”
I don’t pretend to be smart enough to connect all the dots but it looks to me like all that money that the banks are “comically awash in” wound up charged to the American taxpayer in an account called the 18 trillion dollar National Debt. I think “one hell of a train wreck” is still coming, I just don’t know when. But “sooner rather than later”.
The Fed, after all, is the creature of the bankers, and does what they tell it to do. If the bankers decide they want more interest on the money the Fed has “loaned” them, the Fed will raise rates.
Mule… You’ve done your homework and you are correct… I’ll give you an A+
It’s all about the transfer of wealth… And what are all these multi-trillionaires going to do with it…?
Alex Jones has said for years that the events of 2007-2008 were the biggest theft committed by the most brazen gangsters in the history of the world. At the time I dismissed him as just another conspiracy kook, but when you step back and see the situation Mule describes, he may have been right. Jim
How can the financial markets continue to be inflated by the Fed (Plunge Protection Team) .? It appears the whole financial world is upside down. When will the depression end? If ever. Larry is betting his whole career on Europe going bonkers, and at the minute it looks as though it will. My suggestion to all. GETOUT OF ALL FINANCIAL ASSETS SOON. PL
What is happening in Germany is a forerunner to what could happen here. America – safe haven for world money is also a safe haven for life. We are likely to see a major increase in “wealthy” families rushing into the US rather than the poor. We need to build and maintain strong control over passports and money flows as well as improve controls and be vigilant against cyber-attacks.
Twenty years ago there was a sudden jump in wealthy – millionaire immigrants to Australia. Those funds disappeared after the family had mortgaged financed very expensive homes and cars then filed for bankruptcy. Then the next family immigrated doing the same thing with the prior money sent out of Australia.
Send The Don to negotiate with Syria armed with sanctions authority and a battery of European advisors.
I think I’ll tag along for backup just incase his wishbone is where his backbone ought to be…!
I think that the days “news” should be ignored as well as the “Crisis Du Jour”! This stuff has nothing to do with successful investing!
You really think not… Probably be a good idea for your to hide and watch Tommr, because it has everything to do with what I do with my money…
Hey, good for you. It’s YOUR money after all and good luck, too!
Remember, Dr. Don, YOUR money is still at the mercy of the politicians. They can pick your pocket at will – or just make your money worthless with inflation.
To comment a bit more on the exchange value of the US Dollar: I mentioned the a strong Dollar causes deflation. I was refering to domestic deflation. One may recall that in the 1970’s the Dollar was quite weak, particularly against the West German Deutsche Mark! This caused a LOT of inflation in the US. Anyone remember that time? I certainly do since I made a lot of money shorting the Dollar against the DM in those years!
With respect to the Syrian refuges, Germany and Austria need to do what the United States should also be doing on its borders as a matter of their national security
The real estate crisis that plagued the market in 2008 is still with us in a very real way. Thousands of homeowners are underwater and have been waiting patiently for real estate prices to rebound . Home prices have bounced back in several key markets but townhouse and condos have lagged behind and many of those people who have waited for six to eight years are now ready to take their losses and walk away from their properties . Better employment opportunities have become available and staying with a loser is no longer an option . I personally know of several individuals who have or shortly will make the move and dump their property .
I don’t pretend to know the full extent of this problem, but one friend unloaded a condo in a “very nice ” area on the north side of Chicago for 35% less than the 2005 market value , which is considerably better than the price they could have gotten in 2008 through 2013. Another close friend is prepared to walk away from a townhouse in Palatine , Illinois that cost $250K in 2006 and is now worth $160K to $175K , about the balance on the conventional mortgage. A third acquaintance has a condo in Lombard similarly depressed and is prepared to give a deed in lieu of further payment .
I’m just saying . ………
The Fed is all about maintaining control – at any cost. If the Fed can print money “out of thin air” and buy bonds, why can’t they do the same thing with equities?
They can! And they probably are!
Few remember Monday, Oct 19 1987 when the US market took just over a 20% “dip” LOL. We will all keep breathing no matter what happens in the stock market in the next year, well, most of us. Tragedy is only when you think it is.
In motorcycle racing, when we leave our friends, we usually say, “Keep the shiny side up.”
Love, Ray
Good point, Ray! The market goes up something like 86% of the time and down markets a short lived. There is ALWAYS something to freak out over. It doesn’t ever matter in the larger sense! Warren Buffet says to put ALL your money in an index fund and NEVER look at it!!
Has anyone besides me noticed the “pennant” shaped formation developing since the big drop on Aug. 24 in the charts of both the DJIA and the SPX??
Not sure at this point what it means, if anything, but it’s showing a progression of lower highs and higher lows……
At other times, with other charts, this formation has been significant.
Comment to tommr & Bill;
tommr; My mother-in-law had life insurance money from my father-in-law passing on. She took all of it and gave it to a guy on the West Coast that put it into a money mkt. unit that paid 22% for the next 6 yrs. When I heard of it, I was going to fly out there and harm that guy because “everyone knew that the money markets were going to 30%”. Before I got a ticket, they had sunk to 19% and over the weekend they were down to 16%, and never came up to those numbers again. Ray
Bill; We have taken over 11 million refugees from Mexico….. Ray
I’m sorry, Ray I’m not quite understanding this.
The Fed’s actions over the pass six/seven years have been designed to restrain the economy, sort of like putting the World into an induced coma, to keep it from running wildly ahead of itself as it heals from the trauma of the housing bust. That’s why growth has been restrained. These actions include holding the stock markets back with continuous talk about raising interest rates, or not raising rates. The markets hate uncertainty. Stock prices are mostly lower (much lower in most cases) this year. It’s been a stealth, slow motion decline. I think the pricing model has become a tightly coiled spring. It is set to EXPLODE higher at any time!! This is why I have said, don’t listen to the noise but look at what is actually happening!
The Fed will raise the rate by .25 basis points and the world will yawn. This is the most anticipated “surprise” in world history. The markets may go way up as the uncertainty has been eliminated.
Yes, Richwood7 this is exactly what I am expecting, too!
Good for Germany. This is NOT an European problem. It is a Middle East, particularly an Islamic problem. It has to be settled there, not in Europe.
Hi Rich,I think its now a euro problem as well,with Merkel sounding off
Addition to my real estate comment. More houses are coming on the market, but they are not moving and asking prices are coming down by as much as ten percent. There may be a worry about the possible Fed interest hike, it raises the interest rate on mortgages which raises monthly payments and many people are looking more at the monthly payment than the house price. And the last housing bubble was helped along by adjustable rate mortgages or higher payments over time that depended on wages increasing but the wages remained flat, didn’t increase to match the higher payments..
Re Europe and the refuges problem: never has such a lack of strong European leaders and an uncontrolled influx of refugees shown so clearly the lack of unity in the EU nations and the total confusion in handling this problem is a replay of the Greek financial crisis.
Re China; I recommend the comment of Martin Jacques in the UK Guardian of 14/9/15
“It’s not the Chinese economy that’s on life support”
jrfees
Did you forget about Neville Chamberlain who served as British prime minister from 1937 to 1940?
He is best known for his policy of “appeasement” toward Adolf Hitler’s Germany…!
While Churchill (a Wealthy Aristocrat and Conservative Politician who served combat duty with the British Army in the Boar War) was right, let us not forget that there were a number of American Conservatives that were only to happy to supply the Nazis with the war making tools they needed at a profit to themselves….. Preston Bush comes to mind with his Turbo Charged Ford Diesel Engines sold through a Belgium subsidiary that his bank owned…. No one knew of them until our troops began to find them in destroyed Panzer Tanks in Normandy….
That’s Prescott Bush. You have to remember that prior to WWII, many Americans supported Hitler, and the way he had transformed Germany into relative prosperity. Many people did business with him, both liberals and conservatives. Even Communist sympathizers supported him until he attacked the USSR. I’m not excusing him, just putting a little perspective on the matter of what Brown Brothers Harriman, and Union Banking Corp did. UBC was owned by the German company, Thyssen, and I question his staying as a Director after Dec.7. It seems stupid at least.
It’s not just Europe that lacks strong leaders, This country has no one who looks beyond the next vote or under the table C-note. The current crop of would-bes would be laughable – except they mark the end of America’s greatness.
Looking at the recent price action on the S&P I see a strong downward impulse followed by a correction up. I anticipate the next move to be another strong downward impulse. Probably from the Fed announcement, WHATEVER it is.
real technical analysis is about the math ratios that evdidence the big money algorithms that the goldman morgan etc funds use to move the markets in an orderly manner to profit. most from waves within trends. more fluctuation more profits by mega hedgies.
Maybe the Fed could raise interest one month and then lower it the next just to keep everyone and the market on their financial toes…
IT’S HARD TO READ THE MINDS IN ONES HEAD WHEN THE MIND IS DISFUNCTIONAL
Why isn’t anyone looking more at why people are fleeing their homes. Our leaders are about to fund even more terrorism in the region,and around the world by releasing funds to and making a deal with the devil on weapons of mass destruction? GOD HELP US ALL
Interesting item: a chart showing that over the last 3 years, the dollar has increased in value about 18%, while commodities have fallen about 47%. The dollar buys about 2 to 3 times the commodities it did 3 years ago. At some point this will turn around, go the other way. In commodity terms, things will shoot up in price. Value, of course, is always relative. A gallon of gas is far more valuable powering an ambulance that takes you or a loved one to the hospital after an accident, than it is taking you to a movie. You would gladly pay lot more for it. Relative to commodities, the dollar is definitely in a bubble. Bubble burst sooner or later.
The Dollar has been going up because America is the ONLY stable County in the world right now…. Despite what the Conservatives are saying, Americans are doing considerably better than they were in 2009 when the Conservatives were thrown out of office for doing what they do best, screwing the majority of Americans!… :(
Want more of 2007-2009? Re-elect those tied to the coat tails of the Ultra Wealthy Conservatives and try to not be too surprised… : It really isn’t rocket science…. Look at who the Conservatives support and you have your answer… :(
America has ALWAYS done better when led by Progressive Liberals like Lincoln, Both Roosevelt’s, Kennedy and Obama….. :)
Lincoln was a conservative Republican. He would do anything needed to preserve the Union. If the Southern states hadn’t started seceding right after his election, he was ready, by his own words, to give in on the slavery issue. He only freed slaves (and only in areas conquered by the Union troops) to weaken the South and win the war. He was a lawyer/politician, and put the federal government first, over the states and the people.
Chuck,
You missed that part of history…. In Lincoln’s day the Republicans were the progressive Liberals…… The Southern Slave Holder”s were the Conservative’s and were called “Democrats”… Lincoln went to war because slavery violated the Constitution…. The whole reason we rebelled from England was so that we could be free…. Again the Conservatives then were more than ready to promote slavery much like today…
I think the Fed has been doing a lot recently to keep the markets guessing. This is designed to limit risk appetite. From a lot of your comments here, it seems to be working!
Oh geez… Mike will you stop the fricking liberal/progressive vs. conservative crap…
Anyone with a smidgen of common sense can see progressive Republicans and Democrats are sending America into a tailspin of financial bankruptcy.
Look, we may still have a chance of pulling out of it (but I doubt it) because Trump knows (unlike you) that he does not know everything about everything, and he’s not an “Obama-like False messianic Figure,” and he will surround himself with the most professional, intelligent, capable businessmen and women and individuals (like me) to run and operate America.
The Fed is sitting on $4.5 TRILLION worth of bonds, most of which they purchased when interest rates were basically zero.
What do you believe will happen if the Fed raises rates Mike…?
By raising interest rates, the Federal Reserve will be creating its own insolvency because they only have less than 1.5% of assets which will sink any financial ship when $4.5T worth of bonds become worthless…!
The ship of state is on the financial rocks created by progressives and progressive practices…! You better start bailing of jump ship for a Muslim country.
Fed bonds won’t be worthless, but will lose value if sold before maturity. Also, if rates are raised once, it kind of promises they will be raised again… and again. It means private bonds will also be issued at higher rates, and current bonds will similarly lose current value. Loan rates will also be forced up, including credit card, etc. It will hurt any slight recovery we have had.
Granted Chuck, the Fed’s bonds won’t be entirely worthless, unless worthless is defined by: “if you can’t sell something it is worthless.â€
The Federal Reserve created about $3.5 trillion worth of liabilities, which were offset by the $3.5 trillion worth of bonds they purchased… Oh, by the way I do not see that increasing the Fed’s assets… In fact, that’s what is going to sink their boat.
So, it’s a fact when interest rates go up, bond prices go down which if interest rates only go up slightly, that will completely wipe out the very modest assets the Fed has which is by my calculations only about 1.3% of their balance sheet.
Well we agree to disagree… To bad you did not study history more……. If you really think Trump has the answers, you are no “Dr”… :( I’m not worried about the Fed raising Rates… Hell, I went to Cash on the 31st of August….. How about you? If you are still invested, you are giving your Investment Intelligence far more credit than it deserves…… Conservatives have NEVER done crap for this country, whether you think you can see the light or not!… :(
Well Mike we are more alike in that I believe right now cash is king…!
Actually, I believe if the Fed goes “tango uniform” it will be the best thing that can happen to America.
Anything that depends of credit is a bad bet… Banks…?
If the Fed goes TU then we’ll be making more money in Inverse funds than cash, much of which is held in FDIC insured bank accounts… Got more than $250,000 there? If Doc’s prognosis comes to action you will be screwed, big time… Bond Funds? Think again…. Fed isn’t gong anywhere, despite what the right wing screamers are saying…. Those that believed their bilge missed the rally from Obama until the Conservatives taking the majority in Congress in November 2014…..
Don’t believe me? Look back since 1929 at the returns under Conservative Dominated Administrations (35 years) compared to Liberal Progressive Administrations (40 Years)…. $10,000 invested in Conservatives is underwater (negative return)… Same amount under Liberal Progressives, around $275,000… I rest my piece…
Mike S.,
Are your arguments based on Washington figures or a Ouija board? Either way you
qualify as a current day “reporter & future leader” Congratulations Mike S.
I totally pleased that you are at peace Mike…!
The Truth will set you free…. Do the research and you will see the truth of the above statement….
I am.. Back Again the Fed will not raise rates until October 28th 2015 . Only 1/4 of a point.. This will be the day or will never hear from me again.. .. I have mentioned this date since January 2015. Oh October oh this will be the most valuable month of the this “Whirlwind Year of 2015. When this happens I will reveal why I know this is the month when the Federal Reserve moves its rate.!! Then I will mention two major events that will take place before the end of the year of 2015.. Get ready Get ready… Prosper and be in health… Yes the truth will set you free mentally , spiritually , financially !!!