anybody smell smoke?

[Spock]

Had an odd feeling this morning.
I've been watching short term brokered CD rates and bank savings rate climb steadily... Oct 2017 a 1yr CD was 1.5%, today its 2.4%... .1% increase a month on average. As a ratio, thats a pretty steep climb.



Since everything is interconnected, something else has got to be starting to crack.


I'll admit to a significant bias to an implosion. If things were so great, central banks would not be printing money and propping up the stock market with the funds.

But... today something just feels "funny".

Anybody else smell smoke?

 

[REWahoo]

"Feelings" are dangerous when it comes to investing.

 

[LOL!]

I am told that the economy is just smokin' along nowadays.

 

[bjorn2bwild]

Central banks can remain solvent longer than markets can remain rational.

 

[Svensk Anga]

That's a lot of intuition and feelings for someone who calls himself Spock.

 

[Keim]

That's a lot of intuition and feelings for someone who calls himself Spock.

It's his human side, Jim.

 

[joeea]

Had an odd feeling this morning.

I'll admit to a significant bias to an implosion.

... today something just feels "funny".

Anybody else smell smoke?

Nope. Maybe you are thinking too hard?

 

[VanWinkle]

No smoke, just mirrors

 

[RobbieB]

I smell the smoke from my lump charcoal slow cooking the pork spare ribs in the big green egg.

 

[Blueskies123]

If interest rates are going up because of an improving economy then it may not be as bad as it sounds. But you are right, everything is interconnected. You have to watch the dollar and emerging markets.
I am staying the course.

 

[pb4uski]

.... Anybody else smell smoke?

Not at all... in fact, as others have pointed out, interest rates are behaving as expected, the economy improves, inflation is a concern and the Fed increases rates, lifting off the accelerator. Perhaps the speed of the impact on 1 year CDs is more than expected, but that is a nuance.

If you smell smoke, perhaps you are looking for fire.

 

[audreyh1]

I think the market ran up too fast recently, but I’ve been rebalancing on the way up, and I expect to rebalance on the way down. I tend to expect the market to go down. Even if the market drops steeply, things would go back to where they were a few years ago well after the 2009 recovery.

 

[pb4uski]

+1 I did do a number of small rebalancings last year to "lock in" equity gains as it seemed to me that equities were rising too fast... and did a small one just last week but that one was just between dometic and foreign equities.

 

[Red Badger]

Sniff.
Sniff-sniff.
Sniff-sniff-sniff.

Nope. No smoke, but maybe some market timing or speculation.

 

[Spock]

That's a lot of intuition and feelings for someone who calls himself Spock.

Its Pon Farr week...

 

[kgtest]

I am told that the economy is just smokin' along nowadays.

Especially in Canada eh? Oh that's just a skunk I smell.

 

[LOL!]

The 2nd quarter ended, so maybe there was a bit of so-called "window dressing" here at the end.

Today was odd to me with the fade only in US equities here in the late afternoon, but foreign equities kept on smokin'.

 

[jim584672]

The Fed balance sheet roll off is sucking 30 billion a month, increasing to 50 billion in Q4, out of the banking system. Don't fight the Fed.

 

[Chuckanut]

More inflation = people demanding higher interest rates.


Inflation is currently pushing 2.5% for the last 12 months.

 

[Dtail]

More inflation = people demanding higher interest rates.


Inflation is currently pushing 2.5% for the last 12 months.

If the Fed's guideline is 2%, then why keep raising the Fed rates?

 

[Oz investor]

they need more 'silver bullets ' to use in the next crisis , and they also need to sell more Treasuries so a higher return helps there

 

[Helena]

.

Dallas area credit union has a 5 year CD at 3.50%

 

[Closet_Gamer]

Yes, rates are starting to move but recall that they are very low by historic comparison. The fed coming off the gas is more like an athlete coming off of performance enhancing drugs.

The end of QE, the twist, etc. is a good thing. Low rates have helped the real economy, for example the pace of new private construction in Philly has been brisk, but it has also skewed investment decisions. I have a tangential view into private equity deals. Cheap debt has propped some assets into the stratosphere as PE groups trade them around and sane strategic buyers stay on the sidelines. Better to end that soon IMO.

There may be knock on effects in the market and general economy, but that is fundamentally a good thing for long term growth. Also starts to put some ammo back in the fed’s pocket for when the next - inevitable - recession hits.

Raise them faster as far as I’m concerned.

 

[Oz investor]

i am not yet sure spooking the markets ( especially the debt-laden ) is in my best interests , but all that debt does have to be reconciled ( doesn't it ?)

i can see some discomfort heading my way .. can i find a silver lining

i am guessing i will have to accept a good deal rather than the best deal , but that may be good enough to enhance the holdings i have sufficiently , Buffet and Gates will be safe from my efforts to climb the wealth lists ( so will most of the current millionaires .. that is mill NOT bill )

 

[retiredunder50]

I am told that the economy is just smokin' along nowadays.

I hear that too. But I also see that the DOW is down 2.2% for the first 6 months this year. The S&P 500 is up a paltry 0.84% for the same period. The barrel of oil went from $62 to $74. The CPI is building a little momentum. and let's not discuss increasing deficits and looming trade 'issues'. and this is all with the backdrop of all corporations seeing a 40% reduction in the corporate tax rate... please return all seats to an upright position and fasten your belts as a little bit of turbulence may be in our path