What Planet Is This Senator On?

Post a Comment


Wealthy Retirement

View in browser



This is the exact moment when AI will throw off its shackles, instantly growing billions of times more intelligent than Einstein.

A two-time hedge fund manager is sharing a "Singularity Investor Playbook" you can use to position yourself at the forefront of this historic moment.


What Planet Is This Senator On?

Marc Lichtenfeld, Chief Income Strategist, The Oxford Club

Marc Lichtenfeld

Last week, Sen. Elizabeth Warren asked Fed Chair Jerome Powell to reduce the "astronomical rates."

I'm not sure which planet she's on, but I know it's not the one that's between Venus and Mars.

I get it. It's an election year, housing is extremely expensive these days and Warren historically fights for disenfranchised consumers who can't afford housing.

But let's put rates in context.

This is a chart of the federal funds rate over the past 70 years. Do our current rates really look astronomical?

Chart: Interest Rates Far Below Historical Highs
View larger image

The historical average is 5.42%, and the current range is 5.25% to 5.50%. So we're right in line with where we've been historically.

Furthermore, there were 9 million job openings in December, up from 8.9 million in November. Prior to the pandemic, there had never been 8 million jobs available in a month.

In January, employers added 353,000 jobs. That's a big number, and it's an increase from December's 333,000. Wages are also up 4.5% over last year.

And corporate earnings are expected to have grown 4.4% in the fourth quarter of 2023, while fourth quarter GDP was a robust 3.3%.

So we're not exactly teetering on the brink of a recession.

But rates could certainly change. As you can see in the chart above, big spikes have often been followed by quick moves lower, as the Fed has a habit of overdoing it both when it raises rates and when it lowers them. (This has actually created an exciting opportunity for us, though... stay tuned for more on that next week.)


Americans to Pay BIG-TIME for Biden's Oil Blunder

It's bad enough he shut down the Keystone XL pipeline. And it certainly doesn't help that he just canceled seven oil and gas leases in Alaska. But THIS may be Biden's most heinous move in his war against oil. Most Americans could soon be left scrambling. CLICK HERE to see how to prepare.

To make matters worse, China is staring at a looming financial crisis. Chinese property developer Country Garden Holdings (OTC: CTRYF), one of the largest companies in the world, is selling off foreign assets as it tries to deal with roughly $36 billion in debt.

And another Chinese developer is in even worse shape. Evergrande, which has $300 billion in debt, was ordered by a court to liquidate its assets in order to pay creditors.

Should China's woes make their way over to the U.S., the economy could hit the brakes and rates could in fact be lowered.

Either way, bonds are the place to be right now.

If the economy remains strong and rates stay stable, bondholders will continue to enjoy stronger yields than they've seen in years.

Investment-grade corporate bonds are yielding 6%. Non-investment-grade bonds rated BB or better are yielding more than 7%. (Remember, bondholders are guaranteed to get their money back at maturity unless the company goes bankrupt.)

And if rates fall as Warren wants, bond prices will rise and produce nice gains for bondholders, because bond prices move in the opposite direction of rates. In that scenario, investors could either take their profits or continue to collect a high rate of interest (which will look progressively better as rates move lower) until maturity.

I've been telling my subscribers to load up on bonds for a while now. It's hard to imagine a better scenario for this investment class.

Good investing,


Leave a Comment
The Oxford Club's Wealth, Wine and Wander Tour of Spain - Barcelona, Granada, Seville and Madrid, June 6-16, 2024 (plus special extension through June 21)

Expert Predicts Gold, Oil, Copper About to Soar Higher... Discover Why We're in a New Commodities Supercycle Right Here.

How to Beat the Market (With AI)

Former CBOE Trading Legend Showed Members 246% Total Gains While the S&P Was Down 20% During the COVID Crash. Now He's Hosting a Free Class Revealing the Answer to Big Wins. Click for More!

Here Comes Biotech Earnings: How to Trade Them


He Picked Apple at $1... and Netflix at $2... Now He's Betting Big on This Investment

Alex talking outside


Related Posts

There is no other posts in this category.

Post a Comment

Subscribe Our Newsletter