Santa Janet gave the markets a big pile of loot yesterday. Today, the Grinch stole it all!
Market Roundup
After rallying 224 points on the Dow Industrials yesterday afternoon, stocks gave up the ghost into the close, finishing down 253. That clearly raises the risk the Yellen rally will prove to be just like the Draghi rally we had several days ago — a one-hit wonder followed by lower prices.
But that’s only the most obvious warning sign. There are plenty of less-obvious things going on that you shouldn’t ignore. Start with China. The country’s currency dropped overnight for the 10th day in a row, the longest devaluation streak in eight years.
The yuan is now the cheapest since June 2011, a sign of ongoing capital outflows and worries about the domestic economy. Since it was China’s initial devaluation in August that set off a stock market panic here, the fact the yuan is undercutting those panic lows is worth mentioning.
And how about the commodities market? You don’t need me to tell you that stocks have generally been paying close attention to what’s happening in oil. So it’s worth noting that crude barely bounced yesterday along with stocks, then fell to as little as $34.63 a barrel today.
|
|
| What the Fed giveth, the Fed taketh away; the rally fails on day two. |
Gold also gave back every penny and then some of its post-Fed gains, while silver and copper pulled back noticeably. If commodity traders were as optimistic about growth post-Fed as stock traders supposedly are, you wouldn’t see that happen.
Finally, let’s talk bonds. No market on the planet should be as sensitive to a Fed rate hike as the interest-rate market. But it’s behaving exactly the OPPOSITE as a lot of mainstream commentators might have expected.
Long-term yields are actually falling, even as very short-term yields are holding steady. The 2-year was basically unchanged, while the 10-year dropped five basis points and the 30-year fell seven points.
That means the yield curve is continuing to flatten like a pancake here. And that’s a sign bond traders are nowhere near as optimistic about growth or future inflation as Yellen says she is.
Bottom line: The Fed optimism that was so evident yesterday evaporated today. But going forward, what do you expect will happen?
Are we set up for a run into year-end and beyond? Or are investors whistling past the graveyard? Which stocks should be bought in the wake of the Fed move, and which should be sold? And do you have any thoughts on the bond market’s reaction to the Fed?
You know where I stand. Now, let me know your answers to these questions below.
(Editor’s note: The Fed did it! Now you need to act. Click this link to find out what you can do to protect your wealth and to profit.)
|
Boy, did the latest interest-rate move by the Fed get chins wagging online. Let me try to get to as many relevant comments as I can.
Reader $1,000 Gold took an optimistic view of the future, saying: “The Fed dot plots call for 1% per year over the next three years, which is 25 basis points four times per year. That would put us on schedule for a recession in 2018 or 2019 — which means we’re good to go until then, right?”
Reader Don also said concern over risky bonds is overblown in the wake of the Fed move: “Why all the worry about junk bonds? That’s what they are. Anyone who buys them takes the risk. It is ridiculous to waste tears on the people that buy them.”
But Reader Chuck B. warned that the initial “hike euphoria” may not last, saying: “So the markets liked the rate hike — until they have time to think about it, and the half-promise of more to come. That might not go down so smoothly.
“It is a promise of higher costs for money borrowed in mortgages, car loans, and otherwise. That won’t do much for the kinds of businesses we need to create prosperity for all.”
Reader D. said the Fed has started the rate-hiking process too late, offering this view: “Rates should have been raised in 2011 at the latest, and there should never have been a QE3. While the Fed is determined to put a brave face on things, they did this for political reasons — their credibility is at stake, as is the credibility of those highly questionable GDP and jobs numbers of the last three years.
“The likelihood of more hikes is low, and I doubt we’ll see another Fed hike before 2017. It’s much more likely we’ll have a recession first.”
Reader Bruce echoed that theme as well, saying: “The Fed move is woefully late and several dollars short. To raise rates when the economy and the credit markets are starting to show great strain is madness.
“What a tragedy we can’t turn back the clock several years. All we can do now is batten down the hatches, raise even more cash, and use inverse ETFs to help reduce the damage because 2016 may well be very ugly.”
I appreciate the comments, even if I don’t agree with all of them. I agree with the view that the Fed should have started the rate-normalization process a long time ago. Two-year note yields bottomed all the way back in May 2013, a sign investors were starting to price in potential hikes a long time ago even as the Fed kept dragging its feet.
Now we’re almost seven years into an economic expansion/bull market, and there are signs the cycle is turning. Indeed, the reason I focus so much on junk bonds and the behavior of the riskiest corners of the credit market is because that’s where you get “early warnings” of future problems elsewhere.
Think back to the 2007-09 crisis. It wasn’t Citigroup (C) or Bank of America (BAC) that came apart at the seams first. The first lender collapse/bankruptcy was actually a company called Ownit Mortgage Solutions, in December 2006. Stocks ignored it.
Then in February 2007, the larger mortgage company New Century Financial collapsed. Stocks noticed, and stumbled, but then the market climbed for several more months. Only in October 2007 did we finally peak for good, then begin the long, sickening slide lower.
This is a different cycle, and a different time. Housing isn’t at the center of this credit maelstrom. Energy and other commodities are. The biggest debt excesses aren’t in home loans. They’re in risky takeover and buyback loans.
But the pattern is still somewhat similar — with the worst, riskiest loans and lenders getting hit first, and the credit problems slowly migrating up the food chain. It doesn’t guarantee the same outcome as we saw several years ago, but it is a reason for caution in my book.
Whether you believe I’m on track or not, the important thing is that you share your thoughts online. It will make us all better investors. So please do take a minute to comment below.
|
On the economic front, initial jobless claims dropped 11,000 to 271,000 in the most recent week. But the December Philly Fed index came in ugly, dropping to -5.9 from 1.9 in November. That missed expectations by a mile, and was also the second-worst reading (behind this September’s) since February 2013.
The private equity firm Cerberus Capital Management is spending around $600 million to buy a stake in Avon Products (AVP). It will buy around 17% of the parent company, and 80% of its North American operations, as well as put three of its members on Avon’s board of directors.
The troubled cosmetics company’s shares have been on a long slide lower since early 2013. They fell from around $24 to around $2.40 during that time.
Drugmaker AstraZeneca (AZN) said it would buy 55% of Acerta Pharma for around $4 billion to gain access to an experimental cancer drug the firm is developing. “Acalabrutinib” could generate sales of as much as $5 billion per year if regulators approve it to treat leukemia, lupus, and blood cancers.
Speaking of drug companies, the CEO of Turing Pharmaceuticals, Martin Shkreli, was arrested this morning. He personifies all that critics hate about expensive pharmaceuticals because his firm bought a very old drug and preceded to hike the price to $750 per pill from $13.50. The federal charges stem from his work at a different drug company called Retrophin.
Do you think Shkreli got his just desserts? What about the Avon deal … will it save the storied company from oblivion? How about the latest economic data? Should we be worried about the slowdown in manufacturing, or encouraged by the jobs figures? Share your thoughts below.
Until next time,
Mike Larson
P.S. Weiss Research Senior Analyst Larry Edelson wants to make sure you own the supercycle investments you need to protect yourself and profit in 2016 … And he’s set to release the most critical investment recommendations of his entire 38-year career.
Click this link to find out more!
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.
{ 77 comments }
Mike
The biggest concern I have are the real numbers not the rubbery ones. What is the government doing to encourage real jobs and growth, not just seasonal fluctuations. Governments around the world can spend two weeks in France promising action on climate change, yet here on the ground, many folks are looking for real leadership on many other fronts.
if this isn’t a good enough case to vote for Trump nothing is.
The more media outlets try and put him down, the more the beaten up unrepresented American citizens may believe in this type of change. What makes Mr. Trump interesting is that he would go to Washington as a proven and successful businessman. We need successful change which is beyond politics.
If you think the US employment numbers are “rubbery” you should read Australia’s. 71,000 new jobs the biggest increase in 28 yes 28 years. economist’s? egg on their face they predicted a DROP of 10,000. Talk about lopsided this is about as distorted as you will see. I guess Larry’s Supercycle thingee went over a cliff as gold dropped another $26. I sincerely hope Larry was not pedaling at the time. Again I listen to what all these soothsayers have to say with a pinch of salt of course. Some are hucksters selling a product others believe that they have the worlds only crystal ball (models, charts, shoulder and T formations etc.)Physical gold is being manipulated by the paper gold market the bullion banks much like the paper currencies of the world by regular banks. A depreciating currency is good for the economy says my P.M. but it sucks if your retired in Thailand on a fixed income. Investing is a suckers game. We are all being herded to the Big Business slaughter house. Check your wallet at the door.
It’s starting to look alot like District B13 will eventually become reality if leaders continue politicking.
Boy, has your colleague Larry Edelson been dead wrong in his prognostication last October that energy and gold had bottomed and it was time to start laying in commodity positions. I can’t believe how he continues to blow his horn about how “right” he has been in his specific pitches. I followed him for awhile, but I lost my shirt in his gold stock picks (Like IAG a couple of years back) He ignores his misses, of course, and tries to make you believe that his charts, models,and cycles have some magic about them. They don’t!
You ought to encourage him to be a little more honest!
Ditto! I printed out this cycles chart that Edelson was waving about a month ago which prognosticated gold easily over $1100 on 12/15, getting knocked back to $1100 by 1/1/16 and then doing a modest moon shot until April 2016. Whatever remotely fits his predictions he blows out of proportion while the rest of his fishing trips are never mentioned again. Honesty is not his strong suit even though he comes up with some good ideas. But don’t we all have some good ideas?
You know Larry recommended IAG and I also bought shares. He also said sell when he saw that gold was still heading lower. I hear so many people complain about Larry when the fact is people don’t sell when he says sell and take a small loss. Not all recommendations will be winners. Cut the losses short and let the winners ride.
Why take a loss when he is suppose to recommend a gain?
Oh, so right; that Larry E. ,smiling big and fat like the Cheshire Cat,into your face, may be in a one way street going the wrong way, he thinks he,s so right…
Yeah, I’m with you. Whenever something happens in the economy here, or in Europe, or anywhere he says it is happening “just like I said it would”. In 2013 he said gold had bottomed then changed his mind. He started marketing his overpriced “Supercycle Trader” earlier this year saying that disaster would happen on Oct. 7. (Nothing in particular happened.) And more recently, he said that his cycles were predicting something disastrous on Dec. 15. Of course I would like it if he is right about gold going to $5000. But will that be in the year 5000?
Come on folks, quit picking on Larry just because he gives the impression that in his past life he may have been a used car salesman selling gold plated Cadillacs
Don’t knock past lives the Thai’s here believe in it. I am afraid to kill a cockroach as it might be my long deceased relative. Larry believes in himself and no doubt is busy coming up with his next hot prediction. Yes doom and gloomers the end of the world is coming we just don’t know when. So as the song goes “Enjoy yourself its later than you think!”
I miss the emails with Larry’s smiling (I swallowed the canary) look. Guess he went back to the drawing board to revamp his prophecies.
For almost 9 years the mantra was “don’t fight the Fed” and its worked like a charm. If we still go by it, sell, sell, sell.
Yes the Fed has the Gatling gun and all we have is sling shots. Don’t get mowed down.
Frank, you are right about Larry. I too have lost $$ following what he has said. He recently was talking about gains on positions “we closed.” Wonder if that includes the positions that were stopped out like UVXY twice in recent weeks. He sets very low stop losses and yet they both triggered. Lots of money lost then.
Lets see. The congress passes a spending bill containing $85B in discretionary increases, to include the usual panoply of subsidies, give a ways and waste and it’s the fed with its long overdue .25 rate increase that will be blamed when the economy continues its anemic ways.
The congress can afford to throw away money when they borrow it at these ridiculous rates. It takes pork to make hamburgers. I swallowed all that government baloney in my young stupid years. They said save for your retirement. I did. Look where that got me. Money that refuses to work for me unless I jump into the stock market. No COLA because of fudged or as one poster stated “rubbery” numbers. Luckily I live cheaply in Thailand 77 years old with a 26 year old girlfriend enjoying the good life. Why would a retiree want to stay and starve in North America in the cold for 6 months of year?. Beats me but then some are suckers for punishment. There are so many American expats living the good warm loving life here for a lot less than living in their kids basement in NA. Cheers and beers from Thailand.
I will be very care full about comodityy prices because they can transfer trillions in a few seconds which reduces gold etc as a “safe” hedge George Soros can make mistake on gold anybody can frank the disbelieve
Nothing concerning the market but you may be the smartest young man I follow in this market turmoil – you are smart as a whip and I truly enjoy how you dissect the market and the conclusions you come to – you influence my thought process and decisions I make which few do – I’m 81 and agile , have about 800 K and currently out of the market somewhat thanks to you and the 200 dmv which I live by – I so much appreciates your blogs – Jack
The congress can afford to throw away money when they borrow it at these ridiculous rates. It takes pork to make hamburgers. I swallowed all that government baloney in my young stupid years. They said save for your retirement. I did. Look where that got me. Money that refuses to work for me unless I jump into the stock market. No COLA because of fudged or as one poster stated “rubbery” numbers. Luckily I live cheaply in Thailand 77 years old with a 26 year old girlfriend enjoying the good life. Why would a retiree want to stay and starve in North America in the cold for 6 months of year?. Beats me but then some are suckers for punishment. There are so many American expats living the good warm loving life here for a lot less than living in their kids basement in NA. Cheers and beers from Thailand.
Take your $800,000 sell all your accumulated crap and put on your 7 league boots and come to Thailand you will never regret it. At 81 your to worried about making money and not enough about enjoying life. At 81 even if you won the Power ball lottery what good would all that money do for you. Can you take it to bed and hug it. Your children will say thank you Dad after you are gone and put on their holiday hat and sail around the world. I am 77 with a 26 year old girlfriend in Thailand for the last four years. I enjoy life.
Go Gordon, you never know when your last day will be so enjoy it. Your kids will make thier own way.
I am afraid that the credibility of Larry Edelson is fast going South! It is time for Martin to do something about it!
appears mike larson maybe the new larry edelson, with all the chatter in this blog.
I have lost quite a bit of my credibility lately. I find the current situation confounding. Jim
are you speaking for larry, jim?
are you larry, jim?
was that a freudian slip?
Take some off the table and spend it into the economy its not thst bad of a plan. I guess you could hoard into your safe but dont know much of any people that think like that. The sp is holding its avg at near its high. Bear reversal? It holds and climbs into next week. Oil is about half what it was last year having taken out its low and continue toward a floor. You could go wrong building a position but timing it out to think youre going to hit it just right? Gold still early for me maybe next year , more than likely not at all.
Hi all be fair.. Give Larry a last chance to see if his projections are wrong this time . I suggest waiting until end of Jan. 16 and see what happens..
I also Suggest that Martin Weiss should review his contributors
I am happy with Mike Larson. However I see signs of Mike wanting to up his earnings with his new service >>
J
What really bothers me about both Larry and Mike is the generally unwarranted hyperbole (words like plunge, soar, tank, etc.), which are generally used to frighten, rather than inform. Furthermore, the unabashed recommendations for the use of leveraged, mainly inverse, ETF’s, are unsuitable, particularly for the older, more conservative denizens of this website. Among other caveats, the daily rebalancing of these leveraged funds assures they will diminish in value over time, save for very sharp moves in the underlying issues, which is rarely the case. So I’m saving my money, rather than giving it to Larry or Mike. How about you?
In my opinion, their far right political leanings are tarnishing their judgement,,, A trip through the archives found little of this gnashing of teeth as Cheney/bush were bringing us another 1929….
I wonder how “The Donald” likes it that he is Vladimir Putin’s choice for President of The United States of America. I wonder how Trump’s supporters like it. Probably the more fascistic supporters are ecstatic, since both men display elements of that political religion. It gives them reason to like Mr. Putin.
they probably want to takeover the world together.
When the Republican Congress passes a budget like this latest one it’s no wonder Trump is on a roll. Why don’t we just end this charade and go to a one party system? Jim
When the system is based on politicians being able to buy votes by handing out freebies you already have a one party system.
YOU JUST HIT THE NAIL ON THE HEAD
good point, jim. in a way they have. republicans just redrew the congressional district boundries in their favor, a most rigged election system there is.
the democrats must be some real losers to let this happen.
There is a very important Supreme Court case pending to determine if these districts are determined by total population or the number of eligible voters present. The result could be far reaching. Jim
this was politics at its worst. we need to get money out of politics, and politics out of politics. neither will ever happen.
why is it 1000 gold when the DEMOCRATS DO IT you are not whining about it
You could reduce it even further. Find someone honest sharp humble business savvy who would take over as a benevolent dictator. Ooops sorry this does not exist does not compute in our greed ridden society.
When there are now more than 325 times more paper commodity contracts outstanding compared to the amount of gold that supposedly backs them, it is no wonder that gold can go nowhere. It is time that the CFTC puts a limit on the number of contracts compared to the amount of the commodity that can actually be delivered. If even 5% of the holders of long gold contracts would call for physical delivery, the gold price would do a moon shot because the gold is just not there to be delivered! It is always New York that hammers gold down after an up move during the night on other world markets. Manipulation of gold and silver is rampant.
And that manipulation is going to put a lot of miners out of business, if something isn’t done to end it. Especially the junior miners. It is the real reason mining stocks have dropped so far. The real source of the manipulation is most likely China, which is buying as much gold as it can get, and wants to keep the price as low as possible.
Exactly, this is the crux of the low gold price problem.
They are after all, inscrutable! I’m not an expert, but doesn’t it follow that if there ever is a reason delivery has to made the price could go parabolic? Jim
opposite. the price would go in the toilet as the funds collapsed.
it will be just another consolidation, like oil, where only a handful of large companies remain after picking up the pieces.
Then we should avoid gold altogether? Jim
Small, nimble oil companies with low overhead and no debt usually make out like bandits in this situation as well. Jim
warren buffett avoids gold altogether. he’s says he can’t determine its value, it doesn’t pay a dividend or interest, it producing nothing, and it sits on the self for decades at a time and collects dust.
but i’ll bet warren has a ton of gold stashed in the basement just in case. also, warren isn’t always right. this is the same guy that bought IBM.
Now your catching on Ken. Kudo’s. There is only 120,000 physical ounces left in the Comex down from close to a million earlier this year. Contracts used to number 10 or 20 to one ounce of physical gold now 325 and climbing. The bullion banks can always replenish this and I am surprised they let the physical gold drift so low. Maybe somebody is setting up a gold trap. Its all about the money honey. Greed knows no boundrys and soon it will be precious metals turn at bat.
The “Wall of Worry” is still very solidly in place! I think that after the “Triple Witching” tomorrow is over and the “Tax Selling” subsides, the markets will shoot higher! Just say’n.
Shooting higher on what? Manipulation only goes so far and then fat lady quits singing and all the musical chairs are taken. The BMB (Big Money Boys) take the cream off of the top and all you are left with is a hangover. Be careful you do not shoot yourself in the foot it hurts like hell.
I have a bad feeling the market doesn’t know ow to react to all fun and games going on. All the junk bonds and loans used to buy back stock and buy other companies for way above their actual value. Now suddenly the money is going to cost more and the hope has to be that the economy and markets for the overpriced buyouts will expand fast enough and margins increase to service the bonds and loans. Rerolling the loans and reselling the bonds will carry higher interest. The next will be which of the bonds and loans go bad. It looks like the subprime loans went from real estate to corporate. like the old folk songs says “Who knows what tomorrow shall bring”.
Still missing the top line on each page. Never happened before and not a problem with other mails like Brad Hoppmann’s.
Hi Mike,
Just to let you know that I like your above article.
Will
i went ahead and bought a ton of stocks again today. this is my third purchase during this correction. basically, i put my money where my mouth is. if i’m wrong? it’s only money. i can always make more. but i gotta walk the walk, not just talk the talk.
The BMB (big money boys) just love you. Jump in with both feet. They will be glad to give you a trimming or maybe shave you bald.
it’s only money. i can always make more.
Luv your attitude $1000,but you must be brain dead
Hi Michael,
The Fed’s interest rate actions are MEANINGLESS against, what Larry Edelson just stated is OVER $400 TRILLION in WORLD WIDE DEBT!!! Its a no Brainer, the Fed, and by extension many other central banks as part of BIS strategy have painted themselves into a BOX, where the distortions and mis-allocations of capital are SO GREAT. that it now does not matter what the Fed does with interest rates. Seven years of Central Banker printing of worthless, fiat dollars of say $12 to $15 Trillion dollars is litterally a drop in the bucket compared to stopping the DELEVERAGING of $400 TRILLION in Worldwide Debt!!!
Im surprised to see so much comment about Larry here. Over the past couple years he’s been saying how he called the top in gold in Sept. 2011. As I recall, he was also predicting a new high in the near future. Usually each year it was either going to be in May or September. The pattern repeated each year. I had significant holdings but didn’t sell in 11 or 12 because he (and others, including myself) kept expecting the gold bull to return. Now 4 years later having to be more creative. Larry has helped me from time to time to recover some of my losses. Would have been better off if had just got Amazon stock years ago. Keep thinking its peaked.
Maybe, if Larry says to invest in a certain company or thing, just do the opposite. His reccos might be useful after all.
In my opinion interest rates in 2020 will be 15 – 18 – 20%. Why? Because the US Government will need to borrow massive amounts to pay interest on its (our) debt, unless the taxpayers revolt and demand a default. Then the Federal Government would not be able to borrow any more money (a very good thing). Debt is like a snake eating its tail, and for the snake illness or death is possible. The solution? Base wealth on real assets instead of on debt. By the way, The Federal Reserve Bank is NOT Federal (it is private) and it does NOT have any reserve(s). Good luck to everyone – Merry Christmas and Happy New Year!
There has been so much conger regarding the fed rate it feels like its taking the blame for the credit market collapse in the first place. On the other hand is actually trying to take a credit for a recovery but it sure doesnt feel that way?.. Certainly is enjoyable waiting on the crash of all crashes and hovering over this and that to blame but business is business and with the increaae in housing costs I am looking at a 5 yr ARM toward a property that I will be leasing for same period at which time of maturing it may be best to sell as opposed to continue the rental endeavor. Down payment insurance as an investment? 1k to protect 20k if the market tanks and renters a scarce I would recoup my down payment or the negative equity whichever is the lesser.
Jim,
Did you see where Goldman just predicted $20 oil? Looks like I am going to win that third bet with my old Republican college buddy who worked for Exxon/Mobil… 1) Oil would explode under Cheney/bush ($18 to $140, 2) that oil would fall through the floor after they left ($140-$36) and 3) Oil will fall back to pre-Cheney/bush of $18… Golly, what an easy bet that was…No, there was no manipulation was there?… :(
but eagle495 you forget to mention your buddy barack BAT EARS Obama wanted WTI at a minimum 150-200 dollars a barrel ….. he said he needed it for his solar and wind programs to work effectively and you forgot to mention that the real reason why crude has dropped so much isn’t because of George bush pushing it higher its just that there was a lot of oil exploration under George bushs term the average oil well takes 10 yrs to get it from exploration to the pump so this drop in crude is really thanks to bush not to Obama …………………..meanwhile Obama has stopped all drilling on federal lands the shale boom started because of George bush and private lands explorations …. eventually creating a oversupply and if we had a robust economy like barack Obama promised most of this oil would have been used up but with Obama in there and his lackluster growth oil had only one way to go and that’s down
Although I have been following Larry Edelson for only a short while, the only consistent thing I find in his forecasts is that when his forecasts/charts/time frames are wrong he moves the forecast further out and touts how accurate he and his forecasts/charts/time frames have been in the past. Does he really think that all of us have such short memories. I doubt I’ll be a subscriber much longer.
‘Saw an item this morning about a gas royalty company that has stopped paying dividends on it’s units, because the one company it was invested in went bankrupt, due, I presume, to the low price of gas. People who hold resource royalty companies might take note, since all commodity prices are now so low. The gas company in question continues to produce, so it’s customers won’t go cold… yet. But, I wonder if we are not approaching the point when production companies will actually go out of business, and WILL stop producing. This could drive prices of vital commodities like oil and gas through the roof, and the surviving companies stock prices likewise. Tune in.
You have it right on Mike, good data to show what is happening.
I’m not going to try to pick the stock market’s short term direction but long term it is down just like commodities because the debt is grabbing the spotlight and as society realizes this debt actually does have to be paid off in a poorer economic environment globally it’s going to be difficult. If debt was normal or light then all would be in question but debt is at such outrageous levels there will be major problems. And that is exactly why commodities are falling because those buying those commodities realize more than superficial Fed and Wall Street opinions, which are always tainted anyway.
Never been a subscriber but started receiving these emails from Weiss about 6 months ago. I also seen advertisements for Weiss years ago about peak oil which never came true. Seems like these people are doom and gloom all the time. Whats up with that?
Back during the summer, the debt ceiling forced the Treasury out of the debt markets, and interest rates on commercial paper began to rise in response. In Sept. and Oct. the Treasury actually repaid about $140 Billion on it’s debt, which cause a drop of about 10 points on commercial paper. Then Congress raised the debt ceiling, and the Treasury issued about $310 Billion in new debt thru Nov., causing rates on 30 and 90 day commercial paper to jump 20 to 30 basis points since Oct., and as much as 35 points since July. The Fed seems to have been merely following the lead of the markets, not actually leading the way themselves.