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Posts Tagged ‘oil price plunge’

The Plan Unfolds

July 13th, 2017 by Kurt L. Smith

It has been twelve months since the end of the hockey-sticked shape mania of long-term bond prices. Markets don’t trend in straight lines, so over the past twelve months I have used this letter to help you navigate where we are on the journey towards a collapse in long-term bond prices.

The July 2017 letter called the top in long-term bond pricing while subsequent letters followed the initial move to December lows and last month’s call that the correction was over. After a correction price high on June 12th, long-term bonds have declined in price for the past twelve trading days (as of the writing of this letter).

Of course it may be better to be lucky than good, but I will accept any good fortune that comes our way. This letter provides me the opportunity to put forth my opinion, however much in the minority it may be, and I intend to take the opportunity because I believe it is quite important when a collapse in the long-term bond market is involved. (more…)

Thankfully, You Own Municipals

September 9th, 2016 by Kurt L. Smith

While interest rates may appear they will be low, perhaps forever, we are always encouraged when we look back over the past months and years and discover we’ve actually fared well. Municipals are indeed unique and that is why we can continue to scratch and claw, but most importantly make headway by investing in them.

Bonds, particularly municipal bonds have participated in a multi-month rally that was over-extended months ago. As a consequence, we believed stocks would also rally, continuing the tandem performance that has been a hallmark of the financial markets these past thirty-plus years.

Indeed the major stock averages have set many new all-time high marks this summer. Stocks may have a few more months to rally, but the bond rally may be over.  As conviction and certainty for low rates (forever) continued, the bond market appears to have made a top in price that may stand for many, many years. (more…)

Blessed Are Municipals

April 11th, 2016 by Kurt L. Smith

Rare is my newsletter with good things to say.  How about “it is good to be an investor in municipal bonds!”  As I wrote several months back, municipals were one of the top performing sectors last year.  Now we are going to discover how long the ride may be.

I am not recanting my position that Bonds peaked in price (bottomed in yield) way back in 2012.  I stand by my position.  But after a quick swoon in 2013, municipal bond prices have been rising and have remained quite firm (low volatility) as they have made their way back towards the highs of 2012.

Low volatility and rising prices…in this market!?  This is certainly a recipe for those not familiar with municipal bonds to get acquainted.  Municipals appear to be a bright spot, not only in the fixed income markets, but in investing in general. (more…)

Another Step Closer

March 3rd, 2016 by Kurt L. Smith

Markets go up and markets go down.  We all know this.  We should also know that we are fortunate to live in an era in which markets have trended higher for decades.  Unfortunately we now live in an age of asset bubbles with the largest bubbles of all, Stocks and Bonds, on the verge of a massive popping.

We have watched the popping of two asset bubbles over the past several years: According to Bloomberg, Precious Metals (Gold & Silver) and Oil.  Gold peaked in September 2011 at $1920 an ounce, falling 45% over the following four years to a $1046 low.  Silver almost touched $50 an ounce for the second time in its history and sold off to below $14.  Oil peaked at $147 in 2008 but sold at $107 just nineteen months ago and below $27 last month.  Markets do go up and down, but in today’s age of asset bubbles, one must be ever mindful of the tremendous downside risks that exist. (more…)

Rates Rise, Prices Fall

August 12th, 2015 by Kurt L. Smith

Interest rates are moving higher. While markets do not move in a straight line, they do move consistent with the trend. The trend for interest rates is up and the ramifications for investors worldwide will probably be huge. (more…)

Buy The Euro; Enjoy Your Trip

February 6th, 2015 by Kurt L. Smith

Hot on the heels of a plunge in oil prices, the Euro has quickly reached a twelve year low. From 140 in May 2014 to 111 last month, like the price plunge in oil from $107 in June 2014 to $44 last month, we have no idea of the economic disruptions that are now under way. (more…)

Considerable Time Over

January 8th, 2015 by Kurt L. Smith

Long-time readers know we have been waiting for expected change in the bond markets for a…considerable time.  After all, we are in year three of a bond bear market, yet all we seem to hear from bond market participants are interest rates should remain low for a considerable time…until they no longer do. (more…)

NEWS FEED

The $247 trillion global debt bomb washingtonpost.com/opinions/the-2…