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.
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).
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.
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?