Interest Rates 02 (Nov 14 - Dec 25)

[winston]

Forget rate hikes, a rate cut is now more likely…

by Justin Brill

Source: Stansberry Digest

http://thecrux.com/another-mind-bogglin ... as-fallen/

[winston]

This 5,000-year low is ruining your retirement

by Justin Spittler

Interest rates didn’t get this low “naturally.” They’re at record lows because central bankers put them there …

Central bankers made it much harder to retire …

These days, you have to own riskier assets like stocks to have any shot at a decent return. Central bankers have effectively forced retirees to gamble with their life savings.

When rates are high, they make more on each loan. When rates are at record lows, like they are today, banks often lose money.

Profits at America’s four biggest banks fell by an average of 13% during the first quarter…

This group includes Citigroup, Wells Fargo (WFC), Bank of America (BAC), and JPMorgan Chase & Co. (JPM).

European banks are doing even worse.

Swiss bank Credit Suisse (CS) has plummeted 63% over the past year. Deutsche Bank is down 60%. Royal Bank of Scotland (RBS) is down 59%. Mitsubishi UFJ Financial Group (MTU), Japan’s biggest bank, is down 39%.

Source: Casey Daily Dispatch

http://thecrux.com/this-5000-year-low-i ... etirement/

[winston]

How pros are advising clients in this bizarre world of negative rates

by Rayhanul Ibrahim

These negative bond yields are spread out across all the EU countries, particularly the stronger ones, such as Switzerland, Germany and France, with nearly 40% of developed market bonds going negative across the world.

However, even the weaker European economies, such as Spain, Italy and Ireland have some bonds with negative yields.

As a result, UBS analyst Bhanu Bajewa suggests that emerging market bonds may be the best bet for investors. These come with positive yields, but a greater risk of default.

UBS considers Brazil, Mexico, Poland, and Malaysia to be especially attractive.

Source: Yahoo Finance

http://finance.yahoo.com/news/negative- ... 00842.html

[winston]

This 5,000-year low is ruining your retirement

by Justin Spittler

Our first recommendation is to avoid bank stocks.

We also encourage you to own physical gold. As we like to remind readers, gold is real money. It’s preserved wealth for centuries because it has a rare set of characteristics: It’s durable, easy to transport, and easily divisible. A gold coin is valuable anywhere in the world.

Source: Casey Daily Dispatch

http://thecrux.com/this-5000-year-low-i ... etirement/

[winston]

Earlier this week, Dutch bank ABN Amro (ABN.AS) became the first large bank in the world to announce plans to pass negative interest rates on to customers. According to its website, the bank is currently updating its policies and could begin charging interest on business checking and savings accounts as early as October 1.

This morning, Royal Bank of Scotland (RBS) – one of the largest banks in the U.K. – sent letters to more than 1 million business customers warning it could soon do the same.

Source: Growth Stock Wire

[winston]

U.S. interest rates are among the highest in the world

Even basket cases like Spain and Italy have government bonds that yield less than comparable U.S. Treasurys!

At today's quotes, for example, a 10-year U.S. Treasury yields 1.59%, while a 10-year Italian government bond yields only 1.16%.

Source: The Non-Dollar Report

[winston]

Higher Interest Rates ?

Today the U.S. 10–year yield, after whipsawing in recent days, has broken out higher.

Very importantly, German 10–year yields have sharply reversed from negative territory and have crossed and closed ABOVE zero for the first time since March.

And Japanese 10–year yields have spiked from NEGATIVE 29 basis points just last month, to nearing the threshold of turning positive again. That's a big deal.

With that, the stock market sold off today on the prospect of a higher rate environment.

Given the behavior in stocks, next week should be a long one as we wait for the Sept. 21 decision from the BOJ, and shortly following that, the Fed.

Source: Forbes

[winston]

BoJ selling long term bonds ?

The Bank of Japan, worried about the negative impact of ultra-low long-term yields on pension liabilities and bank earnings, could conduct a “reverse Operation Twist” to sell long-term bonds and buy short-term bonds.

The problem is that with long-term interest rates already so low, and because of the inherent duration leverage that results, this will create bigtime losses for long-term bonds.

Already, Japanese 40-year bonds have suffered a near 20% decline in price in recent weeks.

Source: Investor Place

[winston]

These Three Industries Benefit the Most from an Interest Rate Hike

by TOM GENTILE

Source: Power Profit Trades

http://powerprofittrades.com/2016/09/th ... e#deeplink

[winston]

How to Protect Your Money Against Negative Interest Rates

by Keith Fitz-Gerald

There is not another currency in the world capable of absorbing the excess liquidity that would result from negative U.S. rates, so traders are going to flood into dollars. We’re simply the best looking horse in the glue factory and there’s nowhere else to go.

The easiest way to do this is to purchase an ETF like the PowerShares DB US Dollar Index Bullish Fund (UUP). If you’re already investing in U.S. companies you’ve got this covered indirectly, so the move I’m talking about here is really gravy.

Or, consider a choice like the Near-Term Tax Free Fund (NEARX) from US Global Investors. The play here is an investment in near-term municipal bonds with relatively short maturities. It’s a great “cash-alternative” for investors who can withstand a smidgen more risk… in dollars.

http://totalwealthresearch.com/2016/09/ ... est-rates/