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Bonds & Interest Rates

Angst in America, Part 4: Disappearing Pensions

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Posted by John Mauldin - Thoughts From The Frontline

on Monday, 17 April 2017 11:33

Angst in America, Part 4: Disappearing Pensions

“Companies are doing everything they can to get rid of pension plans, and they will succeed.” – Ben Stein

“Lady Madonna, children at your feet
Wonder how you manage to make ends meet
Who finds the money when you pay the rent?
Did you think that money was heaven sent?”

– “Lady Madonna,” The Beatles

170416-01

There was once a time when many American workers had a simple formula for retirement: You stayed with a large business for many years, possibly your whole career. Then at a predetermined age you gratefully accepted a gold watch and a monthly check for the rest of your life. Off you went into the sunset.

That happy outcome was probably never as available as we think. Maybe it was relatively common for the first few decades after World War II. Many of my Baby Boomer peers think a secure retirement should be normal because it’s what we saw in our formative years. In the early 1980s, about 60% of companies had defined-benefit plans. Today it’s about 4% (source: money.CNN). But today defined-benefit plans have ceased to be normal in the larger scheme of things. We witnessed an aberration, a historical anomaly that grew out of particularly favorable circumstances.

Circumstances change. Such pensions are all but gone from US private-sector employers. They’re still common in government, particularly state and local governments; and they are increasingly problematic. They are another source of angst for retirees, government workers who want to retire someday, and the taxpayers and bond investors who finance those pensions. Today, in what will be the first of at least two and possibly more letters focusing on pensions, we’ll begin to examine that angst in more detail. The mounting problems of US and European pension systems are massive on a scale that is nearly incomprehensible.



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Bonds & Interest Rates

"Secular Low In Bond Yields Remains In The Future" Says Hoisington's Lacy Hunt

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Posted by ZeroHedge

on Thursday, 13 April 2017 10:28

With the Fed having hiked thrice and calling for three more hikes still, the 2017 Hoisington First Quarter Review contains a call that will have many if not most analysts shaking their heads: “The secular low in bond yields remains in the future, not the past,” says Lacy Hunt.

tightening-cycles

 

....continue reading HERE



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Bonds & Interest Rates

Marc Faber: Central Bankers Desperate to Keep Colossal Global Debt Bubble Inflated

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Posted by Marc Faber - Gloom Boom & Doom Reportrt

on Monday, 10 April 2017 16:44

During this 25+ minute interview, Marc is asked if he thinks the Federal Reserve will increase interest rates 2-3 times more in 2017? Marc thinks the Fed will only raise rates once more in 2017 before the next global financial crisis. He thinks the Federal Reserve will reverse course, start lowering interest rates again and do a large QE program. 

Marc thinks global central bankers are routinely coordinating monetary and interest rate policy as well as exchange rates with each other to prevent a "colossal debt bubble" from bursting. 

Jason and Marc also discuss whether the Fed can hurt Trump's spending programs. Marc thinks Trump will need the Fed's help to fund his spending programs. 

Jason and Marc also discuss current stock market valuations compared to past stock market crashes, whether China will need to devalue the RMB another 20-30% like Kyle Bass predicts, whether bonds are now in a bear market, how people should be diversified, and how President Trump will pay for all of his spending programs.

 

...also: Marc Faber: Emerging Markets Outperforming The US Despite Trump Rally

faber loser

 



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Bonds & Interest Rates

Are Rising Rates Bad for Stocks? Not According to History

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Posted by Mike Burnick via MoneyandMarkets

on Wednesday, 05 April 2017 07:07

There are plenty of things that can keep investors up at night worrying about what could derail the stock market. Rising interest rates should not be one of them.

I get a ton of mailbag questions these days asking whether the Fed will get too aggressive with hiking rates, eventually killing the eight-year bull market in stocks.

The implication is: When rates go up, stocks must go down. 

Everyone’s heard this so often it’s accepted as truth. In fact, not a day goes by when I don’t overhear some talking head on CNBC touting this nonsense.

Don’t believe it, because it’s pure baloney.

Last week, I updated you about where we are right now in the big-picture cycle analysis that Larry Edelson pioneered and passed on to us as his legacy. As he correctly forewarned, all the major economic cycles point in unison: A supercycle convergence of historic proportions.

Besides his ardent study of cycles, Larry was also a keen student of history. And he constantly applied historical analysis to his market forecasts. Correctly identifying historical market patterns, sometimes long forgotten, but destined to repeat.

The upshot? During turbulent periods like this, markets could behave exactly the opposite of what you would expect. You simply can’t afford to rely on old myths about how the markets should behave.

The single biggest myth gaining traction right now is 
about interest rates and stock prices.

Everyone seems to believe that when yields move up, stocks will tumble – but that’s total hogwash – nothing could be further from the truth.

Historically most bull markets in equities occur with rising interest rates, not falling rates. Conversely, most bear markets in stocks happen alongside declining interest rates.  It is exactly the opposite of what you hear.

Just look at recent history: The Fed has raised interest rates three times since December 2015, and promises more to come, yet stocks are up nearly 15% since the first rate hike.

Want more proof? Let’s take a look at one of the greatest secular bull markets in history: The 1950s and ’60s! Take a look at the charts below and you’ll see what I mean.


chart1s 
Click image for larger view



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Bonds & Interest Rates

Bond Market Doom: Key Tactics

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Posted by Morris Hubbartt - Super Force Signals

on Friday, 31 March 2017 09:40

Here are today's videos and charts (double click to enlarge):
  

Big Picture Key Charts & Video Analysis

acrude oil hammers



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