Interest rates have finally risen from their artificial lows, giving savers ADIATS (A Different Investment Alternative To Stocks) and thus a reward to being prudent in managing their fiscal affairs, unlike the Federal Government. Ever wonder why politicians clamor for low interest rates..?
Well, haven’t the last two weeks been interesting? From Silvergate, Silicon Valley, and Signature Bank all failing (must be an “S” thing), throw in Credit Suisse across the pond getting nationalized (for all intents and purposes), then a run on select US regional banks, add in a dash of moral hazard (fully insuring all depositors above the FDIC limit of $250k) and a 1/4 point rise in interest rates and what has changed? Nothing.
What’s not to like? Blue Skies, Gentle Waves, A Beach 🙂 However, that was most certainly not, 2022. In fact, last year, except for Cash, every major asset class I can think of got hammered. No matter where you went, nothing worked.
“The legend lives on from the Chippewa on down of the big lake they call Gitchee Gumee…” so begins the eponymous ballad by Gordon Lightfoot about the Edmund Fitzgerald.
A recent article in the WSJ espouses the virtues and foibles of backward running. Great in concept, but difficult to pull off, once, let alone constantly. Kinda reminds me of the Federal Reserve and their attempt to execute their dual mandate (full employment and 2% inflation (unrestrained laughing).
Wasn’t that a scintillating start to Q2? Just when you think you have the worst quarter in stock market history in your rear view mirror, another jolt of reality hits and it was no April Fools joke.
Feels like April 14, 1912 all over again. Not so much actually hitting the iceberg, but the fact there are only so many lifeboats for way too many passengers. Fast forward to present day and the clamoring to exit any asset class is experiencing the same déjà vu.
Given multiple prior posts and warnings about the incredulity of stock prices, assisted by central banks and their race to the bottom with low or below zero interest rates, mix in a deadly virus, (thanks China) add in collapsing commodity prices (primarily Oil) and what do you get? Uncertainty.
So we begin the Roaring 20’s. Question is, will this decade mimic it’s counterpart of a century ago? For the early part, I hope so, but definitely NOT the end, as 1929 wasn’t a very good year.
Given the late Summer temperatures outside, this is a classic ‘Duh’. But anytime I hear this phrase, I immediately think of Glenn Frey’s 1980’s song, titled the same. It is a great tune, the video even better!! Alas, I chose this for my Gazbit title because of what is happening in the world at present. Where to start?
