What Are Investors Thinking?

 

Investors did not want "Junk Bonds" in 2009 when rates reached 24%. Now, just five short years later, these same investors are buying all they can at rates around 5%.  They are completely ignoring the inherit financial risk in these types of investments. It is all about reaching for yield at the risk of ever getting their principal back. But, I know it is different this time!  Right?  Complacency is all the place, simply look at the major disconnect between the stock market and the economy.  Yesterday, the GDP for the first quarter came in at a negative 2.9%. What did the stock market do? Oh, of course, it was up. The rationale put forth by the pundits was that the GDP for the first quarter would have been positive, if it was not due to the snow.  Did you read that?  Snow caused the decline in GDP.  Like, we have never had snow before in the winter.

Manufacturing Jobs: Facts to Ponder

Since 2001, the United States has lost more than 56,000 manufacturing facilities.  On average, 15 U.S. factories close every day.  Consequences of such losses are an epidemic of unemployment in this country and the loss of good paying jobs to overseas workers.  (The "Civilian Labor Force Participation Rate" is currently at 62.8%, which is the lowest since December 1978.  In regard to wages,  half the country makes $27,520 a year or less from their jobs.)  Back in the 1980s, over 20% of the jobs in the U.S. were manufacturing jobs.  Today, only about 9% of the jobs in the U.S. are manufacturing jobs. 

$SLV: Somethings Never Change