“Starving for Yield”

From Yahoo Finance ‘Starving for Yield on Savings’ by Laura Rowley:

“As of this week, savings accounts are averaging returns of 0.20 percent; one-year CDs are yielding 0.77 percent, according to the Federal Deposit Insurance Corporation. “The Fed is determined to keep rates very low, and while it’s painted as fiscal stimulus I think it’s really a stealth bailout of the banks,” says Richard Barrington, a certified financial analyst and expert with the bank comparison site Money-Rates.com. U.S. savers have lost $140 billion in purchasing power to inflation over the 12 months ending in March, according to a Money-Rates study released last month. “If you tried to raise $140 billion in taxes there would be massive outrage and protests but they’ve taken the equivalent of that out of the pockets of depositors by keeping rates below inflation,” Barrington says. “Depositors are really getting the shaft in this environment and it’s something that’s not really talked about. There’s sympathy for borrowers who are overextended, but they contributed to the financial problem. The sympathy should be with people who did the right thing and saved their money, and are getting teeny tiny interest rates.”

We just don’t have free markets. We have suits in DC picking winners. Oh sure, trend following is the best way to deal with this uncertainty, but politically it all makes me pissed.

---
You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content.

4 thoughts on ““Starving for Yield”

  1. Yes, this sucks BIG time…this has been happening for YEARS now. For the govt lovers, the Consumer Protection Agency will save the day – yeh right.

    One good side effect of this crisis is the number of credit card applications sent to my home have decreased dramatically. At the height, seems like I was receiving a couple of apps everyday. Don’t need a consumer protection agency to recognize that something is wrong. If only our Congress would have recognized this instead of now blaming every business of their ineptitude.

  2. Covel said: “We just don’t have free markets. We have suits in DC picking winners.”

    Truly free markets cannot exist because business cannot be trusted to do the right thing. Since business cannot be trusted, but will have power, government must exist to shield citizens from business. That’s the function of government, but since they have been compromised, they are doing a bad job of just about everything. In a very big-picture view, American hegemony is in decline, we are deep within some type of world political shift, but we don’t know what we are shifting to…so follow the trend.

    Jim said: “Congress would have recognized this instead of now blaming every business of their ineptitude.”

    Nobody is blaming ALL business, and the blame that IS going around is about business being full of criminals, not incompetents. But don’t worry, nothing will ultimately get done. There will be a few sacrificial lambs, but business will get back to it in due time, wealth disparity will continue to increase until the people have absolutely nothing to lose. And then there will be revolution. It has worked that way all through history, and we will see it again.

  3. BP? Suits failed there.

    The issue is not business, but government. Too much government bastardizes and pushes business into government desired directions. That never ends well.

    Notice I am saying government and not a political party.

Comments are closed.