Mortgage rates are going back up, and will more than likely stay up.
However, they’re still very low from a historical point of view, with the normal being over 5.5%
Why the increase?
1. The Fed is going to stop bolstering the housing market
2. The economy is no longer reeling
3. 3.3% rates were unprecedented
For a deeper discussion of this, click on the link below
Farewell 3% Mortgage Rates
Unemployment in Europe is at an all time high.
Inflation has fallen to 1.2%
Will Europe cut rates and cause a stimulus?
I think they will.
How does this help us? It hopefully will slow the decline that is Europe, even if it’s not going to turn everything around long term until Europe gets the relationship between their debt relative to their GDP in order.
Click for the full article.
An inverted yield curve in the US has predicted 6 out of 7 worsening economic conditions in our country since 1970.
In China, we don’t have the same type of statistics because of their young open economy, but recently their yield curve has “inverted”.
I’m watching this and realizing it’s just another of many economic indicators out of China pointing towards a slower economy.
I really don’t want much (if any) exposure to the Chinese Stock Market.
This also has consequences to the whole global trade market as China is the 2nd largest economy right now. We truly are a global economy, and what affects China affects the US.
Stay tuned to my newsletters this year as the China story unfolds.
Click for the Full Article
What is your interest rate sensitivity? If you reply “what does that mean”, then you definitely need to listen to my video below.
I talk about a quick and dirty way to estimate how a Rising Interest Rate will negatively effect your particular bonds and/or bond funds.
What’s the difference between Fiscal and Monetary policy?
It seems like discussions about these 2 similar, but very different, topics are forever getting confused.
If you’re worried about taxes, deficits, and the debt, is that a fiscal or monetary issue?
I want you to know the difference so you’re the smart one at the cocktail party discussion.
Quantitative Easing ( known as QE 2 amongst friends) is coming this quarter. In my opinion, it’s being priced into the markets already.
What is it? A scheme by which the money supply is increased and hopefully starve off deflation and boost the economy.
Sorry, I’m not buying it.
CLICK FOR FULL ARTICLE – QE1 FAILED, WHY WILL QE2 WORK
CLICK FOR FULL ARTICLE – FED’S STRATEGY OF GETTING RETAIL INVESTORS INTO STOCKS VIA QE2 WILL FAIL