Home Forums Hunting & Shooting Hunter's Campfire Looks like they're going to shut it down

Very likely.

They will not be allowed to fail by the Fed or Congress. This leads nowhere.

They never thought that Trump could turn it around this quickly. Now they need to do what they can to slow it down and Make America Poor Again.

Losers can't keep themselves from losing, and winners just keep winning.

Read my lips No new taxes

I sure hope interest rates are raised soon and often.

The FED could be shut down..........


and put Congress in charge of the $$$$$$$$$$$$




The FED has TOO much power!

I've always thought all the artificial stimulus for so long was to prop up and otherwise abysmal presidency.

well back in those days i was issuing certificates, short term for over 20%, and making commercial loans at that rate. It cracked some business.
I should mention that the treasury market changed since then too. Almost all the treasury paper is relatively short term, and up rates will effect a deficit like nobodies business. Personal debt at that time is nowhere at the level it is today either.
timing is something with this stuff and bristoe is right.

Can anyone tell me why the forming of the Federal Reserve system was a good idea? I know that the worst financial upheaval in U.S. history took place on their watch. Also the Federal Reserve issued gold certificates between 1913 and 1933 which were used as currency. If I read correctly the U.S. did not own 1/3 of the gold required to redeem said certificates, and therefore in 1933 effectively declared bankruptcy by outlawing the private ownership of the certificates or gold. We worry about our gun ownership rights and very few seem to worry that we really do not have the right to own or require payment in real money.

[b][/b]

Yep

Raise baby raise, be nice to get something on your money again, instead of thinking they are going to charge you for keeping it!!

I bought my first house in 1985. Rates were so high(+15), I had to get an ARM to get in. My rate went down every every year until we sold the house, plus we came away with $40k in five years.

Five Ways To Profit From Rising Interest Rates - With High Dividends

Dec. 4, 2016
Rida Morwa - Seeking Alpha

Summary

- Treasury note yields have been spiking on expectations that Mr. Trump's economic stimulus plans will create inflationary pressures.

- A new U.S. interest rate hike is also looming in December, with possibly more to come in 2017.

- Making the right investment decisions can help boost your portfolio’s profitability.

- Investing in dividend stocks that have a positive correlation with higher interest rates will pay off.

- Here are five ways to profit from future interest rate hikes by the Fed - with high-yields.

Now that Mr. Trump has been elected president, investors' interest in "Inflation Protected Funds" has been soaring lately. This is due to expectations that economic growth plans by the president-elect are likely to create inflation pressure and possibly result in further rate hikes by the Fed. At the same time, a 0.25% interest rate hike by the Fed is expected in December 2016 with possibly more to come in 2017.

Following this new trend, it was reported on CNBC that major cash inflows from investors are currently going into "Inflation Protected Securities". These tend to be securities that are either hedged against rising interest rates or that actually benefit from them. This article is about those securities that we hold and which are well positioned for periods of rising interest rates.

Repositioning One's Portfolio

At this point high-yield investors need a strategy for repositioning their portfolio to maximize dividends and total returns. Part of this strategy should also include selling securities that are negatively affected by higher interest rates, such as long-term bonds and preferred shares. The vast majority of preferred shares are perpetual, which means that they may never be called, making them particularly sensitive to rising interest rates. During periods of rising interest rates, the issuing company of the preferred shares has no incentive to call them, as it may be more expensive to replace them in the future. This makes them highly vulnerable as interest rates increase, and they can see their prices fall significantly.

Also, part of repositioning one's portfolio should include allocating to asset classes that will benefit from interest rate hikes. Fortunately, there are 6 types of investments to hedge one's portfolio against interest rate hikes, and even profit from them.

Five Ways That Can Set Your Portfolio To Profit From Future Rate Hikes by the Fed

The following are five "High Yield" investment classes that can actually make you more money as interest rates rise:

1- Business Development Companies

For high-yield investors, this sector is particularly well positioned for interest rate hikes by the Fed. Studies have shown that most BDCs, and in particular larger ones, do not exhibit statistically significant sensitivity to small interest rate hikes. This is due to the fact that most BDCs have their assets invested in short maturities. As a result, they possess a more favorable asset-liability structure.

Furthermore, the majority of BDC investments consist of floating rate loans which are primarily funded with fixed rate term debts. This makes BDC loan portfolios better positioned for rising interest rates when compared with the majority of fixed income products. It is estimated that about 77% of BDC debt investments currently bear floating rates. Their potential for growth during periods of rising interest rates is tremendous. Some companies are currently offering a large discount and very generous yields.

2- Short or Medium Duration Fixed Income Closed-end Funds

In the current interest rate environment, high-yield investors are better off investing in CEFs, which hold a pool of fixed income securities with a short average duration. This will greatly mitigate the risk of future interest rate hikes.

The Importance of Duration: The decline in the value of a bond due to rising interest rates is known as interest rate risk, and all bonds are subject to it. But bonds with similar stated yields are not equally affected when rates change. Generally, the longer a bond's maturity, the more sensitive it is to interest rate changes.

Investors who hold fixed income closed-end funds can measure the interest rate risk or price sensitivity of the particular security by looking at the "Average Duration," which is expressed in years. It can reveal approximately how much the CEF's bond portfolio will change in price due to interest rate movements. For example, the U.S. Fed may hike rates by another 0.5% over the next 6 months; this can result in a fixed income CEF with an average duration of 10 years falling by 5%. However, a fixed income CEF with an average duration of 2 years will only fall by 1% and will readjust itself to higher interest rates by replacing each bond that matures with another one with higher yield. This space is looking very attractive today following the indiscriminate selloff in fixed-income CEFs.

3- Floating Rate Corporate Loan Closed-end Funds:

Floating rate Closed-End Funds offer a timely alternative for investors seeking the potential for high current income. These CEFs hold securities with interest rates tied to various moving benchmarks, including U.S. Treasury bills, LIBOR and the prime rate. They can offer protection against interest rate increases because the coupon resets periodically (usually every 2 to 3 months) along with changes in the related benchmark index. As interest rates go up, profits and distributions made by these CEFs are set to increase. These CEFs can offer investors a great "hedge" against rising interest rates.

4- Commercial REITs with a Floating Rate Portfolio

Commercial REITs invest in loans which are backed by solid real estate fundamentals and should see a favorable macro-economic outlook as Mr. Trump implements his economic plans. An improving U.S. economy will give those companies access to more transaction volumes. It is important to note that although the majority of Mortgage REIT companies underperform during rate hikes, some "Commercial Mortgage REITs" have their portfolio well positioned to benefit from higher interest rates, notably those which invest in a portfolio with a floating nature. These companies have their loan portfolio tied to short-term rates rather than long-term ones, and will be beneficiaries from rate hikes.

5- Baby Bonds with a short maturity

"Baby Bonds" are exchange traded debt instruments that trade on the stock markets just like stocks. They can provide a great alternative to preferred shares, especially during periods of rising interest rates. Unlike most preferred shares which are perpetual, baby bonds have a fixed maturity and therefore are less affected by rising interest rates. In general, bonds with short maturities are safer than long-term ones because they carry less interest rate risk. Furthermore, during periods of rising interest rates, the closer we get to the maturity date, the higher the prices of Baby Bonds become. Baby Bonds provide a great hedge against rising interest rates. Choosing the right baby bonds can help boost one's high yield portfolio with minimum interest rate risk. At "High Dividend Opportunities", my Premium Service at Seeking Alpha, we are currently reducing our exposure to preferred shares and replacing them with short-term "Baby Bonds," as they offer income seekers more safety and a better hedge against rising interest rates.

Conclusion

In order to achieve a successful investment strategy, investors should be flexible and willing to readjust their portfolio to benefit from changing economic trends. With rising Libor rates and higher interest rates on the horizon, some high-yield stocks which used to be winners can quickly become losers, while others which lagged the markets during periods of interest rate decline can be tomorrow's winners.

It's true that the prime rate should be higher. It should be much higher. That's not the problem. The problem is _raising_ it.

You know that the government has to constantly borrow money in order to pay off the people it has already borrowed from when their debts come due, right?

If interest rates go up, then it will cost the government more to borrow that money, which means the debt will increase faster, which means the government will have to borrow even more newly-expensive money, and so on.

Eventually, the people who lend money to the government will see the way the debt is increasing and become fearful that the government will go bankrupt and not be able to pay them back, so they won't lend it more money, no matter how much interest it promises them.

When that happens, and the government can't borrow enough money to make the payments on its debt, it _will_ go bankrupt, and lots and lots of people will die.

However, I have been persuaded for many years that repudiation of the national debt will result in less mass death than any other course.

Slow it down?

Ya, a frickin runaway locomotive just about to come off the tracks with old a buck twenty Obummer and his 11" biceps a towin'.

Give me a break.

It's called a dose of reality.

Edited to add:

Go back and look how long it took Reagan's changes to actually kick in. This is the Kenyan's economy still and it certainly isn't 4% growth.

What is good for me is good for them, nothing like collecting that 42 cents of interest on my $25,000 in the savings account.

Back in those days a lot of farmers and other small businesses as well were led to believe they had to be constantly growing if they wanted to survive and borrowing money to do it was the modern day American way.

Many who did went bankrupt and lost everything.

The interest rates got so high and stayed high for so long that they not only couldn't pay anything on their loan principal, they couldn't borrow to plant new crops, buy new or repair existing equipment, pay vendors, restock inventory, etc., let alone 'grow' their business.

Many acres of prime farm ground and real estate were sold at foreclosure auctions, snatched up by mega corporate farms, private speculators and developers.

On the other hand, old school, die-hard, financially frugal folks still fared quite well by putting every dollar they could afford just into CDs alone.

Well I don't think crashing the economy is a good thing regardless of who's in office.

But as long as we're able to protect the only man crush that got you out to vote......

yep , post of the week