Friday, March 27, 2015
CERR Investments: It looks like the party is about over for free money. Stocks have begun to pause on the historic rise they have had lately waiting on the up and coming rate rise. The interesting thing will be whether or not the Feds will come out again and say more positive statements until they do the rate change later this year we hope. Speculation for a June rate increase has the markets nervous but that is still two months away. Since Janet Yellen is finally speaking that there might be a rate increase later this year it will probably happen. The big institutions are making noise that the rates should not be raised for awhile. Will the Feds listen. I believe there will be one more rally and then it may be time to pause until the dust clears.
Sunday, March 8, 2015
CERR Investments - So last Friday 6 March 2015 the Feds said that the stronger-than-expected jobs report may bring on an increase in the US interest rates. The DOW dropped 278 points on the news. Interest rate increases may not happen until June or September an already the markets are nervous. This is what happens when businesses think the spread - how much the banks are willing to lend us compared to how much we lend them (via bank accounts, CDs, bonds, etc) decreases. The consumer is always the guy that will have to carry the load because big business will want to keep the spread going. You raise interest rates business raise prices or the cost of business goes up. There is nothing wrong with that. That is capitalism. One thing that may change rates next week is Europe playing the game of Quantitative Easing and starts increasing the spread like US did.
Friday, March 6, 2015
CERR Investments: It looks like the governments around the world have figured out to keep their economies strong just print more money. Quantitative Easing will be the strategy for a long time to come. Why? Because it seems to work as long as you keep lowering interest rates. First the US, then Japan and China, next Europe. It also helps to have a job market that is rebounding and oil prices tanking. It is interesting you don't hear a lot of the economist with predictions like you used to. Because the government has gotten so involved, technicals and fundamentals don't seem to work all the time as expected. Now the game is wait till the Feds speaks to see how the markets react and how much money the government will supply with Quantitative Easing. It always surprises me that when the market drops over about three days the Feds comes out and speaks and wow the market rebounds. However now it is a time to be concerned because the market is so high now that you wonder can you keep up with the same strategy. Does the markets have room to continue to makes it run? I am hoping yes till May.
Tuesday, March 3, 2015
CERR Investments: It looks like the economy is on cruise control most of the time. Good economic data is coming in and everyone is adding to the stock market. If things were as good as it seems then why is the Federal Reserve so much involved with manipulating interest rates. How much longer can bank accounts, CDs and money markets continue to pay little to no money to investors just because they don't want to except a certain level of risk. Most of us are afraid of what happen in 2008 and will not forget it. If you leave the big banks and equity fund managers alone for too long they will find away to gamble with money and chase the big profits. Remember profits means big bonuses. I hope one day that people who invest in other people's money will look out for those investors.