  Update - 1/26/2012
Phillip Cochran, Series 7 and 63VP/Chief Investment Officer Good morning. The market is already getting hammered this morning. The 2yrTSY opened at .223 (.240 yesterday) and it is already down to .211 this morning. This month the 2yr TSY is averaging .24% and just last September we averaged .20 for the months, hitting the low of .15% on 9/21/2012. The point being, it can get worse. Current Treasury Yields:
If this seems really bad it is. Yesterday The FOMC told us to expect the target rate to remain low, presumably where is has been at for years, until the end of 2014. This is only the second time in history that they have told us not to expect a change for years to come, the first time being just months ago (then it was mid-2013). Expect there to be another quantitative easing by the Fed to come this year (QE3). They site poor economic recovery, and extended unemployment for years to come after disappointing results from past stimulus. The economy is worse than it was a year ago, despite what anyone wants to believe. Are we closer to a bottom, sure we are, that stands to reason. Are we close to a bottom, who knows? Large companies are still declaring large layoffs, and expect states to have a lot of layoffs coming in the near future. Initial jobless claims have posted this morning worse than expected at 377K versus the 370K expected. I suspect this number will be worse once they are revised. Continuing claims are also worse than expected at 3.554MM. The last remaining original member of the President's economic team, Timothy Geitner, has announced that he does not expect the President to keep him if he is re-elected. That is a basic announcement of his resignation. If the President didn't want him he would be fired, no one says we plan to fire you after the season and expects you to stick around. I suspect this is the Treasury Secretary's decision. |
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