Category Archives: Government

Can Bonds Rally To New All-Time Highs?

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Since the Fed increased rates in December, the bond market has been rallying. Many have told me that the Fed controls all markets. Many have told me that you cannot fight the Fed. Many have told me that the Fed controls the bond market.

My question is if anyone has told the bond market this?

The Fed has now increased rates 3 times since December of 2016. So, if the Fed truly controls the bond market, and if the Fed truly controls the direction of interest rates in general, doesn’t that mean that overall rates should be rising?

Well, the bond market does not think so. Since December of 2016, the bond market has been rallying, as can be seen in the attached chart below of TLT. Yet, the Fed has raised interest rates 3 times during this rally.

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Civil Servants

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I really should know better by now, but I still get amazed when I see the obscene salaries that bureaucrats and civic employees get. I can’t imagine anyone less motivated, industrious, or clever than a government employee, and yet thanks to their unions, they get salaries that far exceed the average compensation at Goldman Sachs (or Apple or Google, for that matter). The truth value of these employees is, I am highly confident, about 66% less than they are paid.

There’s a crummy little town near Palo Alto called Redwood City – – it’s a real shithole, except for a few good taco joints – – that spends over $100 million for its government. This is a “city” of 82,000 people, and one glance will show you the largesse that they’ve granted themselves…..

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CIA, WikiLeaks & iWatch

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In this new world of technology and its attendant problems of the hacking of gadgets and products, Apple’s iWatch now takes on a whole new meaning after WikiLeaks published material yesterday that is purported to be CIA documents and files related to U.S. intelligence cyber and spying activities.

Apple (AAPL) is nearing a convergence of a couple of Fibonacci levels that may serve as resistance around 145.00-146.00, as shown on the following Weekly chart.

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The Deregulation Myth

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I was aghast this week when I read that Trump was going to torpedo the Dodd-Frank regulations. As a people, we learned precious little from the sins that led up to the financial crisis. Famously, not a single person went to jail, and over the past eight years of “healing”, the bankers have simply become richer……..and richer……….and richer.  The icing on the cake just came, with the feeble regulations that were enacted to reign them in being sent to the chopping block.

It got me thinking to the last time the government torpedoed well-meaning bank regulations, and that was with the the passing of the Gramm-Leach-Bliley act. This act of Congress, which torched the Glass-Steagall law, established a foundation for the financial crisis that would take place years later.

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