Juggling Dynamite

St. Louis Federal Reserve Bank President James Bullard said Friday that the Fed will need to raise interest rates by the end of the first quarter of 2015. However, Pimco’s Tony Crescenzi doesn’t see that happening so soon.Here is a direct video link.

Key factors pressuring rates lower today remain an aging population and the gifts of 30 years of reckless credit policies from global bankers and governments that resulted in stagnant wage growth courtesy of globalization and excess capacity leading to an indebted, under-saved, aging western populace along with an under-employed and already indebted youth. 

Our own work suggests that bond yields may well be rolling over again as shown below in the chart of the US 10-year Treasury. 2.50 is the next key test level and if that support fails, then the 2% range is back in view.  This will mean that under-capitalization rates in savings and pension plans will continue to grow and in turn, continue to suppress spending in the future.  The credit bubble is the gift that keeps taking future demand.

Corporate Board posts are cozy clubs of networking and socializing. Unfortunately attracted by the perks, pay, and status, the role frequently devolves into a cesspool of collegiality and yes-men to the c-suite, where no one is asking the tough questions–until its too late. Here is a direct video link.

I have long appreciated Daniel Kahneman’s work in Behavioral Finance and the importance of EQ (“emotional quotient”) over IQ. We are presently enjoying his 2011 book “Thinking Fast and Slow” on audiobook. He appeared on Charlie Rose in 2012 to discuss some of the material. Here is a direct video link.

There are also several excellent video lectures available here. This one is a worthwhile sample for long weekend fun. Enjoy:

Daniel Kahneman is an internationally renowned psychologist whose work spans cognitive psychology, behavioral economics, and the science of well-being. In recognition of his groundbreaking work on human judgment and decision-making, Kahneman received the 2002 Nobel Prize. In this program he explores the idea of happiness. Here is a direct video link.