Wait Till They Get A Load Of This..

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Pension funds especially Public Pension funds are in deep do do*...they have been trying to keep solvent by investing in Equities. Which since the 08 debacle the FED has been accommodating with the FED policy of easy money and printing...You have seen the rise in Equities as a result.

Now the tenor of FED policy has changed to one of tightening interest rates which has changed the psychology of Equities. The break came apx at the end of July 2018. Couple that with Trade War tensions and the Equity traders have become nervous. The result has been a correction or decline in Equities which is now becoming quite pronounced. Equities are now in retreat.

The upshot is that when the Pension Fund managers see their returns they are not going to like it..and will put pressure on the FED to loosen up a bit. The FED with Powell the HAWK as Chairman has apparently been TONE DEAF to the concerns of Investors. If this state of being tone deaf continues Pension Funds will start to face bankruptcy. Once that starts you had better grab your gonads.

So as of now it is too early to batten down the hatches as one is waiting to see if the dynamic established in 2012 still holds, but the red storm warning flags have gone up...I just do not like what I see...

Another suspicion that I have now is why has the FED become so Hawkish? Is there something that is not apparent to the eye or in the FED's articulated rational? Perhaps the rise in interest rates is being used to maintain the USD or Treasury Bond equilibrium in the global economy? In essence that they are being forced by exigencies to raise rates, which if that is the case shows a deterioration in the standing and or viability of those instruments. This would stand to reason as you continue to increase debt loads you are undermining the sustainability of said instruments. You are in essence debasing them. This situation then would sooner or later be an inevitable part of what amounts to the script for catastrophic failure.


*Watch PBS Frontline 10/23/18 about Public Pensions particularly in KY.

[sammyg2]

I placed sell orders on 6 of my biggest mutual fund holdings this morning, dumping that $$ into money market and metals funds.
Not sure yet what I'm going to do with my bond funds.

Somebody is hell-bent on influencing an event that is scheduled for the first week of November, and they don't care who gets hurt.
I'll be watching from the sidelines.

[tabs]

Originally Posted by sammyg2

I placed sell orders on 6 of my biggest mutual fund holdings this morning, dumping that $$ into money market and metals funds.
Not sure yet what I'm going to do with my bond funds.

Somebody is hell-bent on influencing an event that is scheduled for the first week of November, and they don't care who gets hurt.
I'll be watching from the sidelines.

The upcoming midterm is creating a nervousness. Equities do not like UNCERTAINTY. Perhaps this is the reason for the retreat?????

I believe there are a lot of countervailing forces*..economic results indicate that business likes T's policies..

The American people are tired of the same old hackneyed establishment politicians and policies..ones that no longer achieve results. Thus we have had the advent of the reformer President who promises to get er done. To MAGA.

Now we have a slew of the same kind as T outside the main stream candidates of divergent ideologies become viable. Beto in Tx and Cortez in NY... they represent the same phenomena as T.

Set aside your ideological blinders..and see the similarities...


* We have the deep state bureaucracy and political establishment of both Parties that do not want to give up power being in opposition to the crass and uncouth reform minded T and his policies. What they are afraid of is his continuing popularity in being able to draw standing room only crowds...In the Federal bureaucratic beast the DOD likes T as he is willing to use American military muscle. One has to remember you do not have to be pulling a trigger to apply that muscle.

[tabs]

As previously articulated everybody in the world holds USD's as it is the reserve currency and the US Treasury is universally held as the bedrock of secure investments. With the advent of potential Trade Wars the rational of holding those instruments comes into question as economic firewalls go up. This then would cause a wobble in the valuation of those instruments as the wisdom of holding them comes into question. To ameliorate those concerns to maintain an equilibrium an enticement of higher interest rates has to be given.

Acht Zoooo!

Now that is what Threading the EYE OF THE NEEDLE really means..

[Shaun @ Tru6]

I've been hearing a lot about this and was going to post. Great thread Ted, wish I were going to have dinner with you next week, we could discuss.

[pwd72s]

The main reason for Oregon's services (road, water, sewer, police and fire) constantly becoming less & less is overly generous pay, benefits, and retirement packages to public employees.

It's a dirty little secret that Oregon's lamestream media doesn't talk about.

I'm sure Oregon is far from alone.

[Craig T]

I sold 75% of my equity positions (mutual funds and individual stock) back in early July after the dip in late June. I moved it into laddered treasuries at an average of 2.4% (3 mo, 9 mo, 12 mo, 2 years). I missed this last market run up and was kicking myself. Today, not so much The market is now below when I sold and the treasures are throwing off good safe income. I've never tried to time the market...but I'm feeling very lucky today.

[pwd72s]

Actually, the market is now off for the year. Wise of Craig to preserve capital. Of course, some will blame Trump for this, despite the forces causing it have been in place since long before he began his campaign.

[sammyg2]

Originally Posted by pwd72s

Actually, the market is now off for the year.

At the time I sold I was up over 4% ytd

[Zeke]

I'm a simpleton when it comes to this subject but even I can see the writing on the wall.

[Craig T]

Originally Posted by pwd72s

Wise of Craig to preserve capital. Of course, some will blame Trump for this, despite the forces causing it have been in place since long before he began his campaign.

I have no choice. I retired recently with no pension. I can't afford to lose what I've budgeted to live 30 years on...Nor do I have the stomach or time to wait out a correction. I can live with 2.5% and still sleep night. Just another Baby Boomer at retirement age making the flight to safety. Soon we'll be seeing 4-5% on relatively safe bonds. Then I'm golden.

When the rest of the Baby Boomer get the point, 401K's will be leaving the stock market like a bat outa hell. There's a lot more volatility to come folks.

[pwd72s]

By laddering into treasuries, you also avoid California (or any other state) income tax...by federal law. A little bond buying incentive from uncle sam...

[wdfifteen]

Originally Posted by Craig T

I have no choice. I retired recently with no pension. I can't afford to lose what I've budgeted to live 30 years on...Nor do I have the stomach or time to wait out a correction. I can live with 2.5% and still sleep night. Just another Baby Boomer at retirement age making the flight to safety.

Same here. I got 50% out in June 2017. Missed a nice run up for the rest of the year, but that’s the price you pay for safety. There is too much political volatility in the world for me to be comfortable having most of my eggs in the stock market basket.

[mrbeverlyhills]

So, if the cataclysmic events unfold, the world plunges into depression, id the US bond safe? Where else can you put your capital to be sure it isn't worthless?

FDIC may have to turn around and say "sorry" can't make everyone good. You are SOL.

[KFC911]

Originally Posted by Craig T

I have no choice. I retired recently with no pension. I can't afford to lose what I've budgeted to live 30 years on...Nor do I have the stomach or time to wait out a correction. I can live with 2.5% and still sleep night. Just another Baby Boomer at retirement age making the flight to safety. Soon we'll be seeing 4-5% on relatively safe bonds. Then I'm golden.

When the rest of the Baby Boomer get the point, 401K's will be leaving the stock market like a bat outa hell. There's a lot more volatility to come folks.

Spot on imo...I was mostly out (and will stay out) of equities after the dip back in Jan. The market has enjoyed one hell of a nine year bull run....giddyup . But it's been coming, and now it's here....da BEARS....

.....they could be around for a long time.....but I don't care...much.

LOTS of volatility...trending down, lotsa reasons...

[cabmandone]

Somewhere on a stone it reads: The FED giveth and the FED taketh away

[tabs]

Originally Posted by mrbeverlyhills

So, if the cataclysmic events unfold, the world plunges into depression, id the US bond safe? Where else can you put your capital to be sure it isn't worthless?

FDIC may have to turn around and say "sorry" can't make everyone good. You are SOL.

1. The US Treasury has been the safe haven in spades since 2008. If it goes everything has already went. Hence low interest rates.The same applies to the USD.

2. FDIC has been an illusion for decades.

[tabs]

There is NO SAFETY ANYWHERE.

In reality there never has been any safety, only the illusion.

[tabs]

This is all a waste of time ..I might as well work at Wall Mart for what I get out of this...it pays better.

[tabs]

I listen to the Masters of the Universe Wall Street guyz and just shake my head in disbelief. Ultimately they are deaf dumb and blind. Ehhh I throw my hands up..they don't get it.

I look at Equities as a living breathing entity..the Organic approach as driven by the "animal spirts" of the collective emotion of the people involved in those markets. You get the beat of the pulse and you got it down. So what is the sentiment out there?

The only use I find in listening to the Wall Street Boyz is in ascertaining what their emotional level is. Otherwise BLAH..