“Federal Reserve Chair Janet Yellen said too many Americans are still out of work even after gains made during the five years of economic recovery…“underutilization of labor resources still remains significant.”…Yellen’s remarks appeared in line with the message from minutes of the July FOMC meeting, which showed officials growing more aware that labor markets are approaching full employment. Yet determining when the job market has recovered fully is difficult, given the “depth of the damage” from the recession, she said, and policy makers must look at a “wide range” of indicators…The median estimate of policy makers released after their June meeting shows they project the benchmark federal funds rate to rise to 1.13 percent at the end of 2015 and to 2.5 percent a year later.” Story at…
http://www.bloomberg.com/news/2014-08-22/yellen-says-fed-sees-significant-under-use-of-labor-resources.html
ATA TRUCKING TONNAGE IMPROVES (American Trucking Association)
“American Trucking Associations’ advanced seasonally
adjusted For-Hire Truck Tonnage Index rose 1.3% in July, following a decrease
of 0.8% the previous month…American Trucking Associations’ advanced seasonally
adjusted For-Hire Truck Tonnage Index rose 1.3% in July, following a decrease
of 0.8% the previous month…Trucking serves as a barometer of the U.S. economy,
representing 69.1% of tonnage carried by all modes of domestic freight
transportation, including manufactured and retail goods.”http://www.truckline.com/article.aspx?uid=2956bbac-8668-41c4-8b18-f7891a82be69
No sign of recession in trucking.
JAPAN IS A VICTIM OF KEYNESIAN ECONOMICS (CNBC)
“Japan saw its economy shrink at an alarming 6.8 percent annualized rate
in the second quarter, proving its greatest national disaster, Abenomics, has
failed and the Japanese economy has fallen victim to the scam called Keynesian
economics. (Defined as the belief that a country can tax, spend, devalue and
inflate its way to prosperity.)… As one lost decade turned into two, in the
year 2000, they coupled their fruitless spending efforts with massive amounts
of money printing. And despite two decades of low growth, the nation stubbornly
held on to the popular Keynesian excuse of "if only" … If only our
stimulus was larger, if only we weakened our currency more, if only we kept
interest rates lower for longer; economic nirvana would be achieved…if we
persist in following the Keynesian counterfactual, our fate will be worse than
that of Japan, as the deluge of debt being dumped by our foreign creditors
causes the dollar to be dethroned, interest rates to soar and inflation to
skyrocket.” Commentary at…http://www.cnbc.com/id/101937458
NOTE TO FEDERAL EMPLOYEES: TSP IS A GREAT PLACE TO KEEP CASH (CNBC)
The Federal Government employee deferred retirement account, TSP, (similar to a 401-k) doesn’t have very many investment options, but it does offer a great place to park cash. That would be in the “G”-fund. The website says, “The G Fund interest rate calculation is based on the weighted average yield of all outstanding Treasury notes and bonds with 4 or more years to maturity. As a result, participants who invest in the G Fund are rewarded with a long-term rate on what is essentially a short-term security. Generally, long-term interest rates are higher than short-term rates.” From TSP at…
https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_G_Perf.shtml
As a result, the G-Fund has returned 1.9% over the past year and for risk-free cash that is really good. A typical money market fund is paying close to zero interest on the year. To get a similar return outside of the TSP, one would have to invest in a short-term bond fund. That’s where a good bit of my cash is, but it is not without risk since the principle will fall if interest rates rise.
Another good tip for the TSP: It is always best to
maintain contributions into stocks each month. To be clearer, 100% of monthly
contributions should always be into stocks.
A 75-25 split between the C and S funds (respectively) would present a
good “total market” choice. That means if
the market rises or falls, you are buying stocks. You can always do an interfund transfer to
cut overall stock exposure.
