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Treasury Bonds

The End of the Gravy Train?

Michael Farr | Posted 02.24.2015 | Business
Michael Farr

In the summer of 2013, a sharp spike higher in interest rates caused by the "taper tantrum" (fear that the Fed will soon end monetary easing) reduced both housing affordability and the opportunities to lower mortgage rates through refinancing.

A Race Against Time

Michael Farr | Posted 01.30.2015 | Business
Michael Farr

The year 2015 may yet produce solid returns for investors in US stocks. However, it's looking more and more likely that TINA ("There Is No Alternative"), more than any other factor, will be responsible rather than strong earnings growth.

Bold Action Plan or Delusional Rant?

Michael Farr | Posted 01.21.2015 | Business
Michael Farr

Wherever you stand on the political spectrum, I think there are some undeniable truths regarding our economy that need to be addressed before we reach the next phase of robust and sustainable economic growth.

Taking Stock

Michael Farr | Posted 01.16.2015 | Business
Michael Farr

There are many positive signs in the US. Gross Domestic Product (GDP) for the 3rd quarter was up 5% on an annualized basis compared to the 2nd quarter (adjusted for inflation).

Here's A Chart That Should Have You Just A Little Bit Worried

The Huffington Post | Mark Gongloff | Posted 01.07.2015 | Business

If you're a frequent borrower of money, for stuff like education and cars and lip implants, you might think that low interest rates are good. But be w...

Time to Get Excited?!

Michael Farr | Posted 02.28.2015 | Business
Michael Farr

Surging stock prices will likely increase rather than decrease the costs of saving for retirement for most folks. Why? Because most people, including baby boomers who are inching closer to "retirement age", remain vastly underprepared for retirement.

Should the Fed Be Worried About Deflation?

Michael Farr | Posted 02.17.2015 | Business
Michael Farr

For an economy heavily dependent on consumer spending, this is not a trivial consideration.

The Squeeze of the Middle Class

Michael Farr | Posted 02.04.2015 | Business
Michael Farr

The median household income in 2013 was only slightly above that reported for 1995 (after adjusting for inflation), while costs for necessities like housing (rent), health care, and education are making it much more difficult for middle-class folks to get by. 

What Is Causing the Drag?

Michael Farr | Posted 01.21.2015 | Business
Michael Farr

Using inflation-adjusted numbers, we indexed each component of GDP to 4Q07 levels, beginning with a value of 100 for each. We graphically display the results below, followed by some commentary.

How Prudent Investors Should Handle An Environment Of "Low Returns"

Jesse Felder | Posted 01.16.2015 | Business
Jesse Felder

The bottom line is a 10-year treasury note pays you little more than 2% per year and stocks are likely to earn you even less over the next decade. So what's a prudent investor to do?

Deleveraging Has Not Yet Run Its Course

Michael Farr | Posted 01.06.2015 | Business
Michael Farr

I've argued for some time that the process of deleveraging has yet to run its course. The aggregate level of debt in our economy currently stands at a record high, even though many pundits continue to say that debt levels are much more manageable now as compared to the pre-crisis days.

What Oil Is Telling You

Michael Farr | Posted 12.31.2014 | Business
Michael Farr

The drop in oil (and corresponding drop in energy stocks) is causing much consternation throughout the investment world because it is inconsistent with the narrative articulated by most economists.

Should You Sell???

Michael Farr | Posted 12.15.2014 | Business
Michael Farr

The growth of the American and global economies are the underlying drivers for most all equity investments. A clear discipline, dogged research, and dispassionate assessment are an investor's best friends.

The Buyback Binge

Michael Farr | Posted 12.02.2014 | Business
Michael Farr

Remember, markets go down from time to time, and it's normal. Cool heads and steady hands make money over time.

Another Flash Crash or Market Shutdown?

Michael Farr | Posted 11.11.2014 | Business
Michael Farr

Technology seems to have solved the trade execution issue, so I don't foresee an overwhelming market shutdown. Fidelity now offers an amazing 1 second trade confirmation guarantee.

Loan Me $250,000. Please!

Michael Farr | Posted 11.04.2014 | Money
Michael Farr

I want to buy a house. Would you be willing to loan me $250,000 for 30 years at 4.25 percent? Your answer is crucially important. Before you answer, keep in mind that you will be taxed on the interest you receive.

Margins Remain Suspicious

Michael Farr | Posted 10.22.2014 | Business
Michael Farr

So what are the causes for optimism with regard to future earnings power? Well, the most notable are probably the recent sharp decreases in interest rates and gas prices.

Enough Fed! Give Free Markets a Chance!

Michael Farr | Posted 09.24.2014 | Business
Michael Farr

The widespread expansion of credit to car-buyers, especially to sub-prime borrowers, is beginning to cause some industry observers to cry "bubble." Is this economic progress?

More of the Same

Michael Farr | Posted 08.18.2014 | Business
Michael Farr

As expected, the Federal Reserve stuck to its pattern of reducing asset purchases by another $10 billion. The monthly pace is now down to just $35 bi...

What's Going on With Interest Rates?

Michael Farr | Posted 07.29.2014 | Business
Michael Farr

An aggressive rally in the Treasury market this morning has resulted in the lowest 10-year Treasury yield since June of last year.  Nearly everyone is looking for an explanation as to why longer-term interest rates continue to fall in the face of reduced Fed support and better economic data.  So what is going on?

Tracking Earnings

Michael Farr | Posted 07.19.2014 | Business
Michael Farr

While the overall quality and composition of earnings in the 1Q may have improved somewhat, index earnings growth remains highly dependent on margin expansion.

Economists Are Wrong

Michael Farr | Posted 07.07.2014 | Business
Michael Farr

To boil things down, there are really only two roads we can follow in an environment of such as this. The economy will either muddle along at a sub-par rate of about 2 percent until balance is restored, or we go down the path of running up debt in an effort to produce higher growth rates in the near term.

My Bonds Will Do What When Interest Rates Go Up?

David A. Dedman | Posted 07.02.2014 | Money
David A. Dedman

Most investors own bonds in their portfolios. We buy them for safety and to diversify our portfolios. More and more we are starting to hear about rising interest rates.

Market Noise and Fed Messaging

Michael Farr | Posted 06.16.2014 | Business
Michael Farr

So far this year, the mid-cap banks are outperforming their behemoth cousins, and we now may know why. The big question, though, is how detrimental have these new regulations been to the economic recovery?

Mother Nature Clouds the Outlook

Michael Farr | Posted 04.27.2014 | Business
Michael Farr

How much of the slowing can be blamed on Mother Nature? Nobody knows for sure, of course, but there is enough reason to believe that the brisk pace of growth recorded in the second half of 2013 will not be sustained in 2014.