Just looking at equities today I guess I have to conclude that all is good in the U.S. and the global economies.
Forget that the whole world is operating on quantitative easing (QE) as central banks keep trying to pump up global economies and growth is slowing everywhere. Oh well this game will work until it doesn’t and these things can go on for years and years–actually they have already gone on for years.
Right now we are awaiting the 1/4% rate cut next week to the FED Funds Rate. Hey-maybe they won’t cut–but really we all know that equities would tumble hard if no cut came and we know who is seemingly calling the shots at the FED-and it isn’t the FED.
Of course us that have been happy to at least get paid some amount when in cash (money market) will take a hit. Just checking the Gabelli US Treasury Money Market AAA (GABXX) we have in eTrade it is currently yielding 1.82% while the Fidelity Government Cash Reserves (FDRXX) is paying 1.6%. These will begin to trend lower with a rate cut–the speed to be determined by the maturities of the holdings.
It has been a busy week for us as we lock down some of the profits in individual issues. We went ahead and let the New Residential Investment 7.125% (NRZ-B) preferred go early today-seems like for now it is running out of steam and locking down the 3.5% gain seems like the right thing to do. Also the account this holding was in was almost fully invested and I wanted to raise a little cash in that particular account in case an opportunity comes up. My eTrade accounts are almost always fully invested, while the Fido account usually holds too much cash–caused by restrictions Fido has on some baby bonds and preferreds.