Monthly Archives: December 2010

Independent Financial Advice Needed for Bond Market

     Interest rates for the 10 year Treasury have increased from 2.38% to 3.39%, roughly 100BP, since the lows of October 8, 2010. The labor market has improved today based on jobless claims and the ISM’s PMI index improved to 56.6%. So does this mean that inflation is coming back and thus bonds will crash? Suppose both inflation and a full employment economy returns. Then the Fed would need to raise interest rates which would hurt the stock market. Also corporate profits are at 55 year record margins, which is an unsustainable statistical outlier. Further, the Schiller 10 year CAPE is 22.7 instead of 15, which implies stocks need to decline by 34% even if corporate profit margin remain unchanged.

2017-01-10T23:32:40-08:00 December 30th, 2010|mayflowercapital blog|Comments Off on Independent Financial Advice Needed for Bond Market

Can Independent Investment Advice Protect Investors From a Crash?

      Regarding using independent investment advice for investors to protect themselves from a crash, does it work? People are aware that an investment advisor who is not on the “sell side” of the securities industry is more independent and objective than someone on the “sell side”. But what about a large independent advisory firm? Can they be objective about making a bearish forecast even though that means losing clients who insist on shopping for a bullish advisor?

2017-01-10T23:32:40-08:00 December 29th, 2010|mayflowercapital blog|Comments Off on Can Independent Investment Advice Protect Investors From a Crash?

Bond Investing During Holiday Season

     Bond investing during holiday season has been affected by traders going on vacation in last two weeks of December. As a result of holidays some traders have sold off their inventory to protect their profits while they are on vacation.

2010-12-22T09:31:00-08:00 December 22nd, 2010|mayflowercapital blog|Comments Off on Bond Investing During Holiday Season

Today’s Bond Market Decline is Not the End of the Great Recession

originally published December 7, 2010 by Don Martin.    The Long Term Treasury ETF TLT declined 2.14% today because last night a “tax cut” (in reality an extension of a 9 year old tax law, and thus not a cut) will be approved by Congress and the President. There will also be an actual, but temporary, cut in payroll tax rates. One might be tempted to think this will magically cause employment to recover thus igniting inflation and killing the bond market. However, the big picture is that increasingly both China and the Euro zone are looking like a bubble that will (or already has) burst. Also, according to Barron’s two-thirds of the U.S. homes that need to go through the

2010-12-21T12:06:00-08:00 December 21st, 2010|mayflowercapital blog|Comments Off on Today’s Bond Market Decline is Not the End of the Great Recession