January 12, 2018

janusobserver12

8 years ago

Perspective

“At Fidelity, Schwab and TD Ameritrade, employees win extra pay and other incentives to put clients in products that are more lucrative for them, and the firm.”

“There are no true believers in pump-and-dump; only those who get in early and profit.”

“All told, the three central banks are sitting on $14 trillion in securities they have bought since 2009: a $4.4 trillion mix of Treasuries and mortgage securities held by the Federal Reserve; the European Central Bank’s $5 trillion in corporate and government bonds; and $4.5 trillion worth of bonds and exchange traded funds accumulated by the Bank of Japan.”
“Moreover, the view that the United States government, in the wake of the tax cut package, will have to issue more securities to finance a larger budget deficit is giving bond investors pause.”
“’The U.S. is about to issue a whole lot more debt in an environment where the demand for that debt is about to go down,’ said Daniel W. Drezner, a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University. ‘What that means is interest rates are about to go up’.”
“And that is bad news for bond investors.”