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Bloody Wednesday.
That’s my short-hand way of describing one of the most serious threats to your wealth. And this morning, Chairman Janet Yellen all but confirmed that it’s coming soon … very soon.
First, some background: Short-term interest rates have been pegged essentially at zero since late 2008. The Federal Reserve hasn’t raised them once … not once … since 2006.
Neither has virtually any central bank elsewhere on the planet. Most have been cutting rates, flooding their economies with newly printed money, and otherwise catering to the easy money crowd. In fact, the Bank of Canada just lowered rates by 25 basis points to 0.5% this morning.
But two years ago, I started warning that the Fed was nearing the end of its rope with Quantitative Easting (QE) and that bonds were in trouble. I forecast that the Fed would start dialing QE down – long before Wall Street expected at the time – and sure enough, that’s what the Fed did starting in December 2013.
More recently, I forecast that the Fed was laying the groundwork for actual interest-rate hikes. Since Fed meetings conclude on Wednesday now, I said we were getting closer and closer to a “Bloody Wednesday” – a day where the Fed would shake the financial markets to their core by finally changing the cost of money.
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| Janet Yellen: A rate hike ‘appropriate’ this year. |
It has taken a bit longer than expected. But today, Yellen went before the House Financial Services Committee in Washington and said you better batten down the hatches – because the first rate hike is right around the corner. Yes, it was couched in her traditional “Fed-speak” manner, but the message from the following statement should be clear …
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal-funds rate target, thereby beginning to normalize the stance of monetary policy.”
This year. As in 2015. A year that only has five or so months left. Yellen is far from alone, either. A large majority of Fed policymakers – 15 out of 17 – said at last month’s meeting that they thought it would be time to hike before year-end.
What’s more, the bond market isn’t even waiting for the actual increases to begin! It’s front-running the Fed like always, with 30-year Treasury yields surging from around 2.22% in January to 3.18% today.
Even more Fed-sensitive 5-year yields are closing in on the top end of the range that has persisted since September 2013. If they clear 1.85% or so on a closing basis, you could see all heck break loose in the bond market!
So you need to take steps to prepare for Bloody Wednesday-related turmoil in the markets.
| “Make sure you get out of long-term Treasury and other bonds.” |
First, make sure you get out of long-term Treasury and other bonds, if you haven’t already. They offer way too little yield, and way too much risk, for a rising-rate environment.
Second, if you’re looking for yield, I recommend you mostly avoid traditional “bond-like” sectors like Real Estate Investment Trusts (REITs) and utilities. Focus instead on companies that can grow their dividends even as rates rise, and that have more economic sensitivity. I have several of my favorites in the Safe Money Report.
Third, put some of your capital in sectors that have already been beaten down dramatically – and which have a lot of the risk wrung out of them. Energy is clearly in this category.
Fourth, realize that the very low volatility, “up and to the right” stock market environment we’ve been in for the past few years is over. This is going to be a much rockier road going forward — one where solid guidance from experts who have seen many an interest rate cycle over their decades in the business will come in handy.
Lastly, understand that I’m forecasting a Bloody Wednesday process that will play out in stages over a couple of years – not just a one-off, one-day problem. Different strategies will make sense at different points in that cycle. So be sure you stay tuned to Money and Markets for guidance on how your investment strategy should evolve over time.
In the meantime, let me know your thoughts on Fed policy going forward. Is Yellen signaling that a hike is right around the corner, and if so, what are you doing to prepare? What should it mean for bonds, stocks, and the currency markets? Have you already implemented the strategies I highlighted, or do you have others that you’re putting into place? Be sure to share your thoughts at the website.
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The anti-nuclear proliferation deal between the U.S., other advanced powers and Iran set off a furious debate at the website in the wake of my column on it yesterday. Many of you disagreed with the parameters of the deal, and with the pro-detente approach toward Iran. But some supported the policy as a way to improve relations between the U.S. and avoid further conflicts in the Middle East.
Reader Mike S. said criticisms of Obama are misguided, and that previous administrations should share the blame for our country’s problems. His view:
“Where was all the criticism of the Cheney/Bush administration when it was taking us into an unjust war based on phony Intelligence? Where was this site when Cheney/Bush were taking us into the Crash of 2007 and its follow-on Depression? What is wrong with giving negotiations and treaties a chance, before we go to war?”
Reader M said that we eventually made our peace with Japan, Germany and Vietnam after going to war with them over the years, and losing many American lives doing so. He also pointed out that the deal will ensure U.N. inspectors are on the ground making sure Iran sticks with the program, a victory for nonproliferation.
Finally, he said that we actually need Iran as a counterbalancing force against even more egregious enemies like ISIS. His additional comments:
“The idea that Iran is sponsoring the killing of Americans ended when the U.S.-led allies in Iraq realized that, without Iran, it would have been impossible to expel the Islamic State out of Tikrit earlier this year (the birthplace of Saddam). And it was confirmed when U.S. military spokesmen unofficially admitted that, without Iran’s help, expelling Islamic State out of Fallujah and Ramadi, would also be far more difficult.
“The pragmatic reality: Without Iran-supported Hezbollah, Islamic State would be holding Damascus; without Iran-trained Shia militias, Islamic State would be in Baghdad. We are now undeclared allies on those battlefields and have an urgent need to make the alliance official, formal and far more effective. It is the only realistic pathway to defeat ISIS and counter the global chaos they create. Despite denials on both sides, the obvious reality is that the nuclear deal with Iran is a key step in that direction.”
Reader John weighed in as well, saying that warmongering doesn’t do anyone any good, and that any deal is better than no deal. His view: “It’s pretty obvious that you’re speaking as a member of the Israeli lobby and are probably a card-holding member of AIPAC. You may not care, but I don’t want to pay for another war in the Middle East just because Netanyahu and his ilk own most of the U.S. government.
“Netanyahu guaranteed the U.S. that if they overthrew Hussein, there would be peace in Iraq and the Middle East. How did that promise work out for you? This is a good example of how diplomacy can work better than wars. A better result would be to end nuclear power and weaponry in the whole world. We could start with the U.S. and Israel.”
But Reader Paul took a completely opposite view, saying: “This president has been a foreign affairs disaster. Now he is trying to turn our back on Israel and our other ally, Saudi Arabia, in favor of a dedicated U.S. enemy. Hopefully, Congress will head this one off at the pass.”
Reader Jeff agreed, offering this take: “The Iran nuke deal is a farce for everyone but Iran. We have all been sold down the river by the Progressives one more time. No one knows how close to a nuke Iran is, but if they were willing to sign this, then it most certainly is 1) good for them and 2) they’re probably a lot closer than anyone thinks and 3) they just need to buy a little more time.”
Finally, Reader Thomas argued “the world has just become a more dangerous place to live in” as a result of the deal. Why? He said: “I wonder who is fooling who? It is actually Iran that got the better deal on most of their terms, and not Obama.
“When will we learn that freedom goes hand in hand with responsibility? History is full of lessons that taught us that freedom without responsibility and accountability will always end in a mess. Iraq is a good example. So is Afghanistan and Libya.”
Clearly, with almost 200 comments coming in overnight, this issue raises concerns and passions on both sides of the debate. If you haven’t added yours to the mix, please feel free to do so using this link.
From a financial or markets standpoint, we’ll have to see if and when Iran’s oil, financial, and other sectors are opened back up to foreign investment and involvement – and how much capital flows in. Energy is obviously a key area of focus, and it’s worth nothing that oil prices haven’t really budged since the landmark deal was announced.
I believe that confirms my long-held view that it’s going to take a long time before significant amounts of Iranian oil hit the market. By then, demand will have increased by more than enough to absorb those additional barrels.
Moreover, the biggest global energy giants aren’t going to write huge checks and commit significant resources toward enhancing Iranian output unless prices rise substantially from current levels. So a lot of the mainstream media commentary on that subject is nothing more than ill-informed claptrap.
But again, I always welcome comments from you whether you agree with me or not. So hit up the website and share them when you have time.
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As we go to press, Greek legislators are still debating the latest European bailout program. They need to approve several measures in order to obtain aid from Greece’s creditors, so we’ll have to see how the vote goes.
In the meantime, one interesting side note to the Greek bailout drama is the increasingly large split between the International Monetary Fund (IMF) and eurozone creditor nations.
The IMF believes Greece needs actual debt write-downs or massive interest rate cuts and/or term extensions on its outstanding loans. That’s because it expects Greece’s debt to balloon to an unsustainable 200% of GDP in the next couple of years — even with a bailout. But Germany and other countries keep pushing that issue off out of fear their citizens will rebel. Some form of compromise will be necessary to ensure the IMF doesn’t back out of future bailout programs.
Biotech continues to be a hotbed of M&A, with Celgene (CELG) announcing plans to buy Receptos (RCPT) for $7.2 billion. Celgene is eyeing Receptos’ ozanimod drug, which is in late-stage trials to treat autoimmune diseases. It could generate as much as $6 billion in sales if approved.
Bank stocks are doing fairly well these days, with Bank of America (BAC) the latest to rally after the company reported that second-quarter profit surged to $5.32 billion, or 45 cents a share, from $2.29 billion, or 19 cents a share, in the year-earlier period. That topped estimates, helped along not only by substantial cost cuts but also strong revenue of $22.3 billion.
Eureka! NASA’s rendezvous with the last of the solar system’s planets (or “former” planets, as the case may be) was successful, according to data sent back to earth late yesterday. The New Horizons probe contacted earth to confirm it survived its Pluto flyby, whose closest approach was roughly 7,750 miles from the dwarf planet’s surface. Data on its observations will stream back over the next several weeks.
Any big banks you like after seeing these numbers? Let me know over at the website.
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.
{ 48 comments }
Mike, I was wondering about “I” bonds, which, as you know, are inflation protected bonds. They are structured to be long term bonds, but after a year it only takes away 3 months interest to cash them in. Are these worth while, or should I avoid them?
since the second world war the u.s. has bombed 16 countries and killed over three million people. for what???? war is no longer an answer in todays world. it has become too small. many think of wars in monetary terms, but what amount of money can be put on a life??? this comes from a vietnam vet.
Tell that to ISIS and al Qaeda, paul.
Mike S. was right in putting the blame on Bush for the misguided Iraq war. But it was misguided because it upset the balance of power in the region. Sadaam was the only thing Iran was afraid of and with him gone it could finally pursue its goals of a Shia’ dominated caliphate and the destruction of Israel. We should pull out of Iraq and Syria completely and let Iran go to war with Isis. Iran could not allow a radical Sunni presence to its West and would spend all of its resources on the fight and just maybe it will have to come to us for help and we could finally get the concessions we should have gotten with this so called treaty which amounts to putting the lives of our children and grandchildren at severe risk.
AMEN !!
As far as “Bloody Wednesday”, the decline in the stock market has started. S&P peaked in June 2007 at 1408, about 14000 Dow. By Jan. 2008, the monthly sell signal was generated (MACD-related and other indicators) – obviously, the daily and weekly signals turned over earlier. As late as May 2008, the S&P was back at 1280, before it dropped to 520 just under a year later. The NEW monthly sell signal in the S&P triggered in Feb. 2015. After that, we’ve made a new divergent top, common when you have a 400% rise over the course of 6 years. Make no mistake, both weekly and monthly indicators are firmly in sell mode, with LOTs of room to go to the downside. The sell signal is providing loads of time to exit long positions and go short (or hedge) before a large decline occurs. Gold, Crude and Euro all had the exact same indications as the S&P is exhibiting now, and they all declined 30-50% before bottoming. Ignore the monthly sell signal at your peril, this is just the beginning, and there is PLENTY or warning, before all these “news” items happen (Greece, rate hikes).
Bank Americas old tarp warrants are s great buy. Check en out. Only a few quarters over strike with three years to go!
Amer/ baca. Are the tarp warrants sold off by govt. now something to look at!’
Banks are looking good because they are raising interest rates on mortgages while cutting interest payments on CDs and savings accounts. Good business? Yes. Moral business? No. I don’t own any and I will not be making money off other peoples’ misery. Also, what is the alternative to the Iran treaty/ More war/ Why are people so anxious to send other people’s children off to a foreign country to die/ If Iran violates the treaty that is soon enough to start killing our kids. What’s the rush?
This treaty gives Iran access to billions and billions of dollars to fund their evil activities….this is money that they desperately need. The alternative was to keep the sanctions in place and do not facilitate their mad plans. They have publicly stated over and over and over that they intend to destroy us. We should not in ANY way work with them to further their goals. This is insanity. We now have a M.E. nuclear arms race with the Pakis stepping up to supply the Saudis and Iran’s other foes with nukes. This is NOT going to end well.
The musical chairs . Hope everyone is sitting down before you are left standing. What do you expect would happen when the Fed makes capitalism disappear and rigs the bond and stock market .
Plus the housing market will be another big looser with rates going up and affordability going down with higher rates . Plus people who
Bought homes in the last two years will
Be in for a surprise when they go to sell their home with higher rates . These rate hike which will normalize rates will bring down the value of homes so people can afford the payments .
All these issues and more caused by the Fed over the last 8 years .
I am very baffled by the whole financial situation and warnings for the future. Specifically, I have seen large number of articles indicating that In October, the IMF will include the Yuan as addition to the reserve currencies, as a matter of fact, yesterday I read an item by Jim Rickards who claims to have attended an important financial meeting, where they also discussed the possibility of making the SDR, which would also include the Yuan, as the new world currency. He is also selling a book how to prepare for the change for $79.00 and I am not certain that it is worth it, now I may be wrong about that but, in any case, I refuse to publish my Credit Card number on internet to pay for the book. Now, my question just what effect will the SDR and currency make, if any, in all the above. There are too many “instructions” how to prepare for the future. Can you give me an idea?
How safe are annuities in a major recession with Insurance Co. ?
Also, money markets.
Thanks,Bill
After reading some of the comments from war loving gangs,it becomes obvious that these people have no love or affection for this country but always trying to defend other war mongering countries with out understanding the world Politics. Reader Mike S. has state it well that we have been drowned in debt with fighting un called for wars, for no threat to our nation. The Federal deficit is climbing higher and higher,but these hood looms want to spend money to fight war in Middle east, as peer Mike President Bush, and Cheney made the same mistake and created a monster in Middle east, based on incomplete and faulty information. Staring from 9/11, and even prior to that all those religious extremists who keep attacking New York were none other then terrorists from so called from one of our friendliest Nation which is Saudi Arabia. After demolishing the WTC these terrorist were sent back to their country in a charted flight by the authorization of Bush and Cheney. ThisPresident trusts in diplomacy instead of killing our young men and women in unnecessary wars and demolishing our Economy, that is what Bush ,Cheney did and we are still paying the piper for those unnecessary wars. If these people are so much interested in war ,then why cannot they go and fight instead sit here and make plans on our younger generations’ lives. to go and become scape goats. The dollar is going to lose its world currency status, because of our already monstrous budget deficit, adding to this they want another unnecessary war to support a Dictatorship in Middle East. Very Smart!
I’m sorry, but Ms. Yellen is a talker – a big talker! She just talks and talks and talks and does nothing. The Fed is way behind the curve and is not in touch with the reality that prices are rising on all fronts. Yet, Ms. Yellen and her fellow doves do nothing. I’ll believe it (any rate increase) when I see it. It was going to be last month, now September, and now her colleagues are talking 2016. What is the Fed going to do when this economy explodes, then goes into recession? It can’t cut rates. It has an almost $5 Trillion balance sheet. I suppose that it will be forced to do what it is doing now – nothing!
So you are still plugging away at your STRONG recommendation few months ago to BUY ENERGY STOCKS. Well thank God I did not because anyone who did has had their head handed to them like ISIS!
I’m making out like a bandit with Valero, Tesoro, Scorpio and Nordic American Tankers. All making new highs. Atlas Resource Partners is yielding 18 per cent,
By Glenn Kessler
Washington Post Staff Writer
Sunday, June 18, 2006
Just after the lightning takeover of Baghdad by U.S. forces three years ago, an unusual two-page document spewed out of a fax machine at the Near East bureau of the State Department. It was a proposal from Iran for a broad dialogue with the United States, and the fax suggested everything was on the table — including full cooperation on nuclear programs, acceptance of Israel and the termination of Iranian support for Palestinian militant groups.
But top Bush administration officials, convinced the Iranian government was on the verge of collapse, belittled the initiative. Instead, they formally complained to the Swiss ambassador who had sent the fax with a cover letter certifying it as a genuine proposal supported by key power centers in Iran, former administration officials said.
Last month, the Bush administration abruptly shifted policy and agreed to join talks previously led by European countries over Iran’s nuclear program. But several former administration officials say the United States missed an opportunity in 2003 at a time when American strength seemed at its height — and Iran did not have a functioning nuclear program or a gusher of oil revenue from soaring energy demand.
“At the time, the Iranians were not spinning centrifuges, they were not enriching uranium,” said Flynt Leverett, who was a senior director on the National Security Council staff then and saw the Iranian proposal. He described it as “a serious effort, a respectable effort to lay out a comprehensive agenda for U.S.-Iranian rapprochement.”
While the Iranian approach has been previously reported, the actual document making the offer has surfaced only in recent weeks. Trita Parsi, a Middle East expert at the Carnegie Endowment for International Peace, said he obtained it from Iranian sources. The Washington Post confirmed its authenticity with Iranian and former U.S. officials.
Parsi said the U.S. victory in Iraq frightened the Iranians because U.S. forces had routed in three weeks an army that Iran had failed to defeat during a bloody eight-year war.
The document lists a series of Iranian aims for the talks, such as ending sanctions, full access to peaceful nuclear technology and a recognition of its “legitimate security interests.” Iran agreed to put a series of U.S. aims on the agenda, including full cooperation on nuclear safeguards, “decisive action” against terrorists, coordination in Iraq, ending “material support” for Palestinian militias and accepting the Saudi initiative for a two-state solution in the Israeli-Palestinian conflict. The document also laid out an agenda for negotiations, with possible steps to be achieved at a first meeting and the development of negotiating road maps on disarmament, terrorism and economic cooperation.
Newsday has previously reported that the document was primarily the work of Sadegh Kharazi, Iran’s ambassador to France and nephew of Iranian Foreign Minister Kamal Kharazi and passed on by the Swiss ambassador to Tehran, Tim Guldimann. The Swiss government is a diplomatic channel for communications between Tehran and Washington because the two countries broke off relations after the 1979 seizure of U.S. embassy personnel.
Leverett said Guldimann included a cover letter that it was an authoritative initiative that had the support of then-President Mohammad Khatami and supreme religious leader Ali Khamenei.
Secretary of State Condoleezza Rice has stressed that the U.S. decision to join the nuclear talks was not an effort to strike a “grand bargain” with Iran. Earlier this month, she made the first official confirmation of the Iranian proposal in an interview with National Public Radio.
“What the Iranians wanted earlier was to be one-on-one with the United States so that this could be about the United States and Iran,” said Rice, who was Bush’s national security adviser when the fax was received. “Now it is Iran and the international community, and Iran has to answer to the international community. I think that’s the strongest possible position to be in.”
Current White House and State Department officials declined to comment further on the Iranian offer. (This in 2006)
Paul R. Pillar, former national intelligence officer for the Near East and South Asia, said that it is true “there is less daylight between the United States and Europe, thanks in part to Rice’s energetic diplomacy.” But he said that only partially offsets the fact that the U.S. position is “inherently weaker now” because of Iraq. He described the Iranian approach as part of a series of efforts by Iran to engage with the Bush administration. “I think there have been a lot of lost opportunities,” he said, citing as one example a failure to build on the useful cooperation Iran provided in Afghanistan.
Richard N. Haass, head of policy planning at the State Department at the time and now president of the Council on Foreign Relations, said the Iranian approach was swiftly rejected because in the administration “the bias was toward a policy of regime change.” He said it is difficult to know whether the proposal was fully supported by the “multiple governments” that run Iran, but he felt it was worth exploring.
“To use an oil analogy, we could have drilled a dry hole,” he said. “But I didn’t see what we had to lose. I did not share the assessment of many in the administration that the Iranian regime was on the brink.”
Parsi said that based on his conversations with the Iranian officials, he believes the failure of the United States to even respond to the offer had an impact on the government. Parsi, who is writing a book on Iran-Israeli relations, said he believes the Iranians were ready to dramatically soften their stance on Israel, essentially taking the position of other Islamic countries such as Malaysia. Instead, Iranian officials decided that the United States cared not about Iranian policies but about Iranian power.
The incident “strengthened the hands of those in Iran who believe the only way to compel the United States to talk or deal with Iran is not by sending peace offers but by being a nuisance,” Parsi said.
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All this proves is that Bush was an idiot as well as Obama.
GWB always gave the impression of being more clever than smart. BO gives the impression of being not very clever and too smart for his own good – or ours.
Dont you read the terms of this POS You can inspect my room mom but only with two weeks notice Yelling death to America when we are trying to get a deal, which by the way still leaves 4 American in the jail . Maybe they will trade them for 6 more beheading terroists.
I believe the time has come for the shorting of treasuries. I am using a 2x inverse fund and am enjoying the ride so far!
Hi Mike — I still don’t think Yellen will raise rates this year as I think coming market forces (i.e. bond and stock market crash) will force her to delay any thought of a rate increase. In fact, she may even be forced to reduce the Fed Funds rate into slightly negative territory, all while the 5, 10 and 30-yr. yields go through the roof as a result of non-confidence in the U.S.’s ability to pay off all its debts and future obligations (i.e. social security, etc.). We’ll see what happens. Jmvho.
Can Ms. Yellen raise rates when production is falling, unemployment apps are rising, etc. She can’t be that dumb, can she?
I’d actually like to hear from the experienced family investor if shorting using options and no margins, on a global company with a ridiculous P/E ratio from year to year starting @ the end of August with a $2k-$3k investment and realizing the risk/reward on a 20% correction happening isnt a half bad idea. My 401k is in my pocket until the market collapses or our currency is in some way reevaluated. I dont believe commodaties (slv), will explode with the same small investment and I would only take physical possession. Please, your thoughts. Thank u.
Hi Mike- I don`t expect the Fed to raise interest rates this year because it would strengthen the dollar even more causing more losses to the companies doing business overseas. Not a good idea.
Many of the comments imply that if you oppose the Iran Nuke Deal you are somehow advocating war as the alternative. I oppose the deal but the last thing I want is another war. Has there ever really been a “necessary war”? All wars are failures of diplomacy or some would argue an extension of diplomacy. The Federal government has squandered untold lives and dollars by concerning themselves with essentially local tribal conflicts. Any time we take sides we set ourselves up for blowback. We don’t need to make deals with anybody over there, especially one that would spur a local arms race. As for the Israelis, they have repeatedly proven they are perfectly capable of taking care of themselves. In summary, making a written agreement is not the equivalent of avoiding war. Clinton made a similar deal with the North Koreans which ended up not being worth the paper it was written on, and I feel this deal will do nothing more than provide us with a false sense of security. Jim
Paper diplomacy is like paper money. It is only worth something as long as people can be fooled into believing it has value. I believe it was Lao Tzu who said “Talk, talk, fight, fight, talk, talk.” Something to that effect. It only works if you don’t die in the process, though.
I’d like to comment on Larry Edelson’s note about how no amount of money printing will cause inflation. Other than the meaning to “blow-up” or “swell” the word inflation as defined in my 1966 Webster’s New World Dictionary is – “2. an increase in the amount of currency in circulation resulting in a relatively sharp and sudden fall in its value and rise in prices.” That part has not occurred but that’s only because the dollar is the world reserve currency. When that comes to an end, we will be in a world of hurt with the debt and unfunded liabilities on and off the U.S. balance sheet. The worth of all that printed money will become pennies on the dollar. We’re just experiencing full blown Keynes economics and its illusion of prosperity.
Most of the talking heads are calling for the dollar to resume its gains against most other currencies. The brave may want to look at buying leaps on UUP.
We are witnessing the economic destruction of the global economy right before our eyes, thanks to the global central banksters. Who is the $500 trillion in known and off-balance sheet government debt owed to? How are the one percenters and elite counting their trillions in wealth? Its all uncollectible paper and we will have a front-row seat watching it all come crashing down…the ant pyramid is IMPLODING!
One thing about paper debts the debtor can often invent paper assets to cover what’s owed. That’s what our government has been doing for the last so many years, and they’ve gotten away with it so far. Eventually, though, the lie will be uncovered, and I hope I don’t live to see it. Being fairly healthy, in my mid-80s, I fear I may yet live that long, alas.
The very best investment is GOLD right now ,if you do not need the cash for about five years..When the paper hits the fan the US will be like! 100 bankrupt Greek Nations. If the IIMF tries to save us with credits, the western worlds finances could collapse New reserve Currency. BY BY dollar.
We have a lot of our retirement in Guranteed Annunities with Prudential. Should we leave our money there? Also should we buy gold and silver?
We don’t even know what’s in this “deal” with Iran. You can’t give a valid opinion on something that’s secret. But, we do know the perpetrators, Obama, Kerry, and Iran’s leaders and intentions. We do know Obamacare and that most Americans are ready to repeal it. It covers few Americans at the expense of all Americans and our healthcare system. And our free choice of medical care and doctors, and our over-taxed economy. All these “secrets,” including the pending trade agreements, give the federal executive govt. enormous new power over the people. Can we afford to ignore the lies, past performances and corruption in Washington, D.C.? I think we are not very smart if we do. Blind idiots is more like it.
Mike– Like I have said from January 2015 . The fed WILL start raising rates “Triple Eve of what people call Halloween” October 28th , 2015 only 25 basis points. What a time for a Bloody Wednesday” Three days before Halloween !! The Iranian Deal will be trumped by a primitive attack by Israel July next year 2016.. Get Ready Get Ready October will be the most valuable month of this Whirlwind Year of 2015. Watch September the sell off of bonds (MUCH). Nothing matters of what has happened in the pass and that many things have been said, they mean NOTHING ..The Obama Administration has ended. Yes has ended Now!!.. Even though he is still in office. New York and New Jersey will play a major factor in the next President of the USA..Is New York the deciding factor for who will be president . Hint it will not be a woman.. He will do what is needed.some will not like it(of Course) but he will do the right thing. The slowing down of the debt he will cause..Again Israel brings fireworks to Iran in July 2016. ( Big Bang). They will go alone..Israel will BLOW a hole in the Maybe Agreement.. They will show you how to make a deal…Sparks will fly!! Don’t mess will Israel… Happy Day to All…
QUESTION:
How do I find out if I’ve been signed up to any financial advice from your company. I have read several commentators on the future of financial matters, and I need to know if I’m being charged for this information.
Please advise at my email. Thank you.
To paraphrase FDR, “TODAY IS A DAY THAT WILL LIVE IN INFAMY.”
What does it mean for the FED to “normalize the stance of monetary policy”?
DEAR! IM HAVE GOOD SECRET MARKETING IT RAINBOW FOR CAR?PARFUM/.MORE CAR WILL BE SMELL ORANGE AND CHERRY AND MORE.IT BIG MONEY AND GOOD BUSENESS! THANKS! SERGEJ LEVCENKO
MIke,
You talked about Bloody Wed. on the Winter, you talked about Bloody Wed. in the Spring, we heard about it for summer. Now you rant about a September Bloody Wed. Between the talking heads on TV and your once a quarter rants about a rate hike, after listening to you and Mr,. Goyette over there at Weiss, and jumping on stuff that we got killed on including NOBLE in the last 4 months, who CARES? REALLY? Other than REITS and Utilities that are rate sensitive and staying away from Bonds, WHO CARES. the Market if it drops 500-1000 points, is only going to bounce back to where it is now. Mr. Goyette WAS SO WRONG ON STAYING AWAY FROM REITS AND UTILITIES SEVERAL YEARS AGO WITH HIS RANTS ABOUT A DOLLAR CRASH – CRASH…… stay out of REITS, inflation was going to take off, and to load up on Assets like gold, miners and silver. EVERYTHING PREDICTED WENT IN THE OTHER DIRECTION. Not 1,or 2 things. BUT EVERYTHING HE SAID in his 3 part video with Mr. Weiss sitting right next to him. IT WAS THE SALES PUITCH OF THE YEAR! We got our asses waxed and lost a lot of money. while the Market was going up by the Thousands, your firm advice lost us money. So it was like a double hit. Set us back 10 years in INVESTING. Now we have to shake in our boots due to an interest rate hike? What is next for December 31st – DIGITAL MONEY? – Paper will be confiscated, and Digital money will replace it. Why don’t you put that out there, and every quarter for the next 5 years tell every one, until it happens. THEN GO OUT AND RANT ABOUT HOW YOUR PREDICITON CAME TRUE. If every quarter I told 250,000+ people in 75 Countries who pay me a fee to read my advice that something was going to happen, and in a 2-3 year window it finally did, I WOULD BE EMBARASSED. Then go out and rant about your prediction? – Your tactics for Marketing are brilliant. I belong to your service, just tested the waters on A rant you had about a stock – NOBLE, only to get clocked. People are making money – hand over fist, and I can’t seem to make a dime on anything your firm advises on.
CAN YOU HONESTLY EXPLAIN THIS? – I AM SICKEDNED BY IT.
SS ETTINGER.
You’ve cried “Bloody Wednesday wolf” so many times it’s gotten tiring and stupid. No one cares or listens to you anymore. You are a laughing stock. Anyone can see things are getting worse and the Fed will raise rates. But you don’t have any other unique insights that any thinking person can’t figure out on their own. What a joke you are.
I am just a married American , I am old enough to remember Korea, Viet Nam(I was there), Iraq (1) , and finally Iraq (2), wars are never a real win, win, just dead young Americans, I think the president has the right mind set, always talk first , give it a chance, never be negative about talk, PM of England before WW11 knew inside that Hitler was a liar, but he also remembered WW1, England was not prepared , so he gained two years. I hope and pray our president is right, but if wrong he gained time, and lives, our children, they are our most important future.
After all is said and done about whether we have war, or “kick the bomb down the road”; we must understand that the unashamed Muslim mindset has always been, that their is no wrong in deceiving the infidel in any negotiation.
The Fed only WISH they could raise interest rate, and they would do so only if there is a recovery in the real US economy.
However, there is no recovery in the real US economy, and with a “stronger” dollar, the near future is still no recovery along with even bigger trade export deficit. Hence, if the Fed ever raise interest rates in this ugly economic environment, this will be a “brinkmanship” action against the Fed’s better judgement.
There is a lot of focus on the EU, Greece and China and some concern regarding the impact that one or more FED rate hikes will have on the global economy. Truth be told, however, we need to consider the impact of rate hikes in the U.S. For example, the 30-year motgage rate is now over 4% from a bit over 3% a year or so ago. It will likely continue to rise on the news of rate hike(s) and then again on the actual rate hike(s).
Secondly, our friends in Washington have passed some very onorous legislation, created CFPB and implemented regulations that already affects limits a family’s ability to qualify for a mortgage loan. This will be exacerbated by rising rates and virtually kill one of few areas of hope for the U.S. economy and for American families. A slowdown of the the housing recovery will impact durable goods and all that accompanies home purchases.
Third, rising rates are going to adversely affect bank net interest margins. Deposit rates are low. Consequently, bank depositors are keeping funds in non-maturity deposit accounts. Once rates start to rise thes funds that don’t leave the banks, will begin to move into interest bearing bank accounts which will put an immediate squeeze on net interest margins. This squeeze will be compounded by the fact that many borrowers who are aware of pending rate hikes are locking in fixed rate loans at very low rates, many of which won’t adjust anytime in the next five years, putting further pressure on net interest margins in a rising rate environment. Net interest margins have already narrowed by almost 1% down to an average of 3.67% for banks under $10.0 billion. With 32% of loans tied to fixed rates and more coming, banks are losing asset sensitivity which will lead to more margin compression and may lead to losses, much like what happened in the savings and loan industry in the 1980’s. Eventually credit will have to become more expensive threatening debt service capabilities of borrowers and ultimately leading to rising loan defaults and losses. All of this will prompt yet another wave of bank closures whether by consolidation to create scalability or by failure. Either way, availability of credit will diminish.
Fourth, there is a high incidence of workers in the country who are working multiple part time jobs. The dynamic of fulltime employment accompanied by company benefits is being seriously eroded. The country is experiencing the lowest work force participation rate since on record, despite the so-called improving unemployment rate. Increasing numbers of our citizens are relying on some form of local, state and/or federal assistance to make ends meet.
I can only conclude that the economy continues to teeter and that the adverse impact of interest rate hikes in combination with extreme and excessive regulation of the country’s community banking system will buoy economic stagnation, if not lead to outright contraction.
Mike, If you think Janet is going to raise rates you must be on another planet, you pay over 470 billion in interest on your debt.
Its going to be interesting on or around the 13th Sept the Shemitah to see what the markets do.
Also when China joins the sdr in Oct.
Obama is obviously trying to destroy America.
The problem is the American voter for picking Obama.
In 2016 elections, we will see if these idiots learned anything.