This cannot come soon enough!! Passwords be damned!
2014 was the year of the hacker, and a number of companies at CES 2015 want to replace your highly insecure passwords with something much more difficult to steal: your biometrics. Here is a direct video link.
As energy prices, shares and high yield risk corporate bonds continue their freefall today, the US dollar and US Treasuries are receiving strong ‘safe haven’ inflows. The North American yield curve is flattening in a bearish read on 2015 growth prospects.
Today the 10 year yield (shown below) has broken back below 2%, while the 30 year flirts with 2.5%.
Although the US Fed no doubt wants to raise interest rates in 2015 and declare desperate measures at an end, the weight of global debt, overcapacity and aging demographics is proving a crushing weight on inflationary dreams. Our insanely levered financial system is now reaping what reckless policies have sown. Stock and corporate bond prices are experiencing the sucking sound of inevitable capitulation in a de-leveraging world.
See: Banks-stock hopes must yield to bond-market reality for a good overview of the earnings compression all of this suggests for congenitally optimistic bank shares.
Levered booms always go bust. The only way to survive and thrive through the cycle is to accept this fact and control our risk exposure through low debt, high savings and avoidance of the most over-priced assets and sectors. Preparation and discipline is everything. For those who have not learned this lesson to date, the next schooling has begun. Lest we kid ourselves: energy has been ‘the’ engine driving growth and jobs in the real economy over the past 6 years, its collapse now will be felt across the entire economy.
Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., talks about the impact of oil prices on the economy of Texas, North Dakota, California, Alaska and Oklahoma [Alberta, Newfoundland and Labrador too]. Here is a direct video link.
As for how low energy prices and related company shares and bonds can go, the answer is far lower than most can imagine. Anchoring our expectations to a price point in recent memory is likely to prove devastating. The following long term perspective of Suncor and CNQ (the two largest holdings in the Canadian energy sector ETF) offers a glimpse of the mean reversion that is possible (green band lower left) now that the secular energy boom since 2000 has bust.
