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Aunt Janet Blew It



March 19, 2014 – Comments (11) | RELATED TICKERS: BLEWD.DL , IT

I got Ben Bernanke.  I always understood what he meant and I profited accordingly.  My one concern about Yellen was if I could do the same with her.  But I smell trouble there.  Everything was going as expected then she mentions how it would be "considerable time" after the tapering ends that interest may be raised.  Now If Uncle Ben would have said that I would have taken that to be a year or 2.  But when questioned, Yellen says "maybe six months or so."  Well market tanked because people weren't modeling that soon.

Personally I would like to see higher interest rates eventually.  1-3% raised slowly, depending on data.  But maybe this time next year?  I don't think it would be wise.

11 Comments – Post Your Own

#1) On March 19, 2014 at 10:41 PM, rd80 (95.57) wrote:

I saw the coverage of the 'maybe six months or so after tapering ends.'   She didn't say when the tapering would end.

Maybe that means something, probably not.   But, sometimes what they don't say is every bit as important as what they do say.

Off to adjust the tinfoil in my hat. :)

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#2) On March 19, 2014 at 11:01 PM, awallejr (35.23) wrote:

Well she was implying tapering was ending 10 billion per month so 5 months to go. She needs to learn that now that she is topdog at the Fed the world will scrutinize everything she says. 

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#3) On March 20, 2014 at 12:18 AM, jiltin (46.00) wrote:

DEC_2013 10B 75B

Jan_2014 10B 65B

Mar_2014 10B 55B

Apr_2014 10B 45B

Jun_2014 10B 35B

Jul_2014 10B 25B

Sep_2014 10B 15B

Oct_2014 10B 5B

Dec_2014 5B Zero

Jan-Mar_2015 Watch for rate increase

Mar_June_2015 Mandatory Rate Increase


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#4) On March 20, 2014 at 10:15 AM, ThisIsFor2053 (27.31) wrote:

If the plan is to raise rates first half of 2015, then I will be selling a majority of my portfolio come the end of 2014.

It will be a mistake to raise the rates during a very slow, very slight recovery. 

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#5) On March 20, 2014 at 3:17 PM, awallejr (35.23) wrote:

Well I wouldn't expect any big rate hike.  No reason to liquidate since there still wouldn't be any better alternatives.

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#6) On March 21, 2014 at 1:39 PM, ThisIsFor2053 (27.31) wrote:

I have positioned myself into some REITs that should do well in a rising rate environment (NCT, NRZ, RAS, ARCP) however I would likely reduce my exposure to growth stocks, as I firmly believe that rising rates will slow any type of recovery we have going. 

Nothing wrong with having a position of cash in uncertain times.  And I truly believe that a rising rate environment would be very uncertain times. 

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#7) On March 24, 2014 at 2:16 AM, jiltin (46.00) wrote:

Well I wouldn't expect any big rate hike. ==> It may not be abrupt, but phased way. Even 1% every year like 2015 (0.5%),2016(1%) and 2017 (1%) bring down the profit margin. 


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#8) On March 24, 2014 at 10:56 AM, awallejr (35.23) wrote:

I guess having lived through 18% interest rates, 3 % seems extremely tame.

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#9) On March 25, 2014 at 9:45 AM, drgroup (67.63) wrote:

So if you are paying 19% already on your credit cards ( which is mafia like) you'll be left to the mercy of these credit card thieves who will use this opportunity to double/triple the rate increase. This will damage a lot of peoples ability to pay on a timely basis when they are stretched to the max just trying to exist. Jimmy Carter all over...

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#10) On March 25, 2014 at 10:38 AM, awallejr (35.23) wrote:

Not really since during Carter we had double digit inflation which is why Volcker kept jacking up the interest rates to double digits.  We don't have anything near that inflation and we probably won't for awhile.  Demographics being the reason and the lack of wage growth.


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#11) On March 25, 2014 at 12:26 PM, drgroup (67.63) wrote:

Todays inflation has been smoothly disguised in smaller packaging, less quantities, substitution of essential products etc. But make no mistake, it is alive and kicking. Great points though...

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