Lenders and Borrowers "Just Say No" to New Credit
Why low interest rates are not stimulating the economy

By Bob Stokes
5/16/2013 4:30:00 PM

The desire of lenders to lend and of borrowers to borrow has shriveled dramatically. Interest rates have been historically low for years now, yet the economy is barely treading water. History shows that low interest rates are rarely bullish for the economy. Learn why.

Filed Under: conquer the crash, deflation, economic indicators, home sales, Interest Rates

Category: Interest Rates

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The Lurking Danger Behind Ultra-Low Interest Rates
The quest for higher yield can lead to a damaged portfolio.

By Bob Stokes
4/22/2013 5:30:00 PM

Risk-averse investors who depend on fixed income have been hurt by ultra-low interest rates. To make ends meet, many resort to riskier vehicles like bonds. Some fixed-income investors have been sold on the idea that bonds are relatively safe compared to stocks. But The Wall Street Journal recently noted that, "Safety has rarely been more expensive -- or more dangerous." Learn about two risks that bond investors currently face.

Filed Under: Elliott wave, Interest Rates, junk bonds, money markets, municipal bonds, Robert Prechter, Treasury bonds, treasury yields, U.S. STOCK MARKET

Category: Interest Rates

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An Epic Economic Trend Change is Underway
Persistent economic weakness sends a message.

By Bob Stokes
4/15/2013 6:15:00 PM

The earlier you spot a market trend, the more likely you can benefit from it. Is there an emerging economic trend in its early stages today? From the evidence, it appears so. Call it a seismic shift in the entire U.S. economy. Despite the evidence, most economic observers still do not expect what is about to swiftly unfold.

Filed Under: bloomberg, CNBC, conquer the crash, consumer confidence, consumer price index, consumer spending, deflation, economic depression, economic indicators, Elliott wave, gross domestic product (GDP), Interest Rates, recession, supply and demand, unemployment

Category: U.S. Economy

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Every Big Economic Collapse Has a First Domino
When will the dominoes begin to tumble, or has it already begun?

By Bob Stokes
3/26/2013 4:45:00 PM

Financial history shows that every major credit boom is followed by a credit bust. The latest round of financial headlines remind us that unsustainable debt is crippling Europe. In the U.S., heavy debt burdens have put local and state governments in deep financial trouble. Federal debt rapidly approaches $17 trillion. What will be the first financial domino to fall?

Filed Under: 1929 Stock Market Crash, banks, Ben Bernanke, bloomberg, central banks, debt, economic indicators, Elliott wave, European debt crisis, gross domestic product (GDP), Interest Rates, monetary policy, quantitative easing, Robert Prechter, soverign debt crisis, U.S. Federal Reserve (the Fed)

Category: U.S. Economy

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Suburban Poverty Up Nearly 64%
If this is an economic recovery, what will the next contraction look like?

By Bob Stokes
3/25/2013 4:45:00 PM

New research shows that poverty has spread faster in the suburbs than the inner city. Many Americans still haven't recovered from the real estate bust. Unemployment and under-employment remain historically high. Robert Prechter writes, "The Fed is doing everything it can to try to keep the credit balloon inflated. But it’s failing, because the markets and the economy are certainly not zooming, despite all the QEs and 0% interest rates." In the new Elliott Wave Theorist, you'll find 11 charts. Six of them, accompanied by Prechter's unique commentary, show why Americans should brace themselves for a major change in the economy.

Filed Under: CNBC, debt, deflation, economic indicators, Elliott wave, foreclosures, housing prices, Interest Rates, liquidity, personal finance, quantitative easing, Robert Prechter, stimulus package, U.S. STOCK MARKET, unemployment

Category: U.S. Economy

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As Home Equity Lines of Credit Surge, The Low-Interest Rate Trap is Set
Borrowers feel confident about the future

By Bob Stokes
3/12/2013 6:00:00 PM

Americans borrowed roughly $1-trillion against their homes in the decade leading up to the housing bubble burst. That dollar figure remains well above recent home equity loan levels, however, CNBC reports that home equity loans are expected to increase in 2013 as homeowners take advantage of low rates. Will a second wave of price declines in real estate come, just as most homeowners think the market has recovered from the first wave?

Filed Under: CNBC, commercial real estate, deflation, Elliott Wave Theorist, financial forecast, foreclosures, home sales, housing prices, Interest Rates, market forecasts

Category: Interest Rates

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Investors in Student Loan Securities Take on Big Risk
The higher-education bubble is set to burst

By Bob Stokes
3/6/2013 5:30:00 PM

Despite the growing percentage of students who are behind on their loan payments, investor demand for the securities derived from student loans also continues to grow. This grab for yield will likely end badly. The eventual bursting of the student loan bubble will contribute to the larger deflationary trend.

Filed Under: bailouts, debt, deflation, financial forecast, Interest Rates

Category: U.S. Economy

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Will the Fed's Next Move Decide Whether Gold Prices Rise or Fall?
Does monetary policy really drive the precious metal's trend? See the answer with a look at the recent past

By Nico Isaac
2/25/2013 6:15:00 PM

So far this year, gold prices have fallen 10% -- the lowest level in seven months. So it's no surprise that precious metal investors are now asking out loud what they've been quietly wondering for some time: Is 2013 an unlucky number for gold bulls? According to the mainstream experts, the Federal Reserve's future stance on monetary policy holds most of the answer. The way they see it now is the way they've always seen it. The central bank's decision on interest rates pulls the strings of gold prices the way Geppetto controlled Pinocchio.

Filed Under: Elliott wave, Gold, Interest Rates, monetary policy, precious metals, Traders, U.S. Federal Reserve (the Fed)

Category: Gold and Silver

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The Key Factor That Leads Directly to an Economic Depression
Stock market action leads the economy

By Bob Stokes
2/7/2013 4:15:00 PM

Some argue that trends like mounting debt and an ever-widening deficit will trigger a depression. Others say it can happen if the Federal Reserve aggressively raises rates. Then again, the culprit might be chronically high unemployment or plunging home prices. In truth, however, the correct answer is ...

Filed Under: Bob Prechter, CNBC, deficit, deflation, economic depression, economic indicators, Elliott wave, great depression, Interest Rates, recession, U.S. Federal Reserve (the Fed), U.S. STOCK MARKET, unemployment

Category: U.S. Economy

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"Control of Interest Rates" is the Biggest Myth About the Federal Reserve
Bond investors need to prepare for a major change of trend

By Bob Stokes
1/31/2013 4:45:00 PM

Many observers of financial markets hang on the Federal Reserve's every word, and believe the central bank determines interest rates. However, the evidence shows that interest rates are not controlled by the Fed. Bond investors need to prepare for a major change in trend.

Filed Under: all the same market theory, central banks, conquer the crash, Elliott wave, herding, Interest Rates, market myths, Short Term Update, Treasury bonds, U.S. Federal Reserve (the Fed)

Category: Interest Rates

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Does More Monetary Stimulus Mean Higher Gold Prices?
Central bank charts of gold prices & stimulus initiatives since Sept. 2011 set the record straight

By Nico Isaac
1/30/2013 5:45:00 PM

Ask any mainstream economist worth his or her salt about the relationship between central bank monetary policy and precious metals, and you'll probably hear something like: Stimulus is to gold prices what doping is to Lance Armstrong's cycling speed. Stop the money printing and low interest rates, and you significantly slow down gold's gains. Are they right? Is there a correlation between monetary easing and rising gold prices?

Filed Under: Bank of England, central banks, Elliott wave, Federal Open Market Committee (FOMC), Gold, Interest Rates, monetary policy, quantitative easing, stimulus package, Traders, Treasury bonds, U.S. Federal Reserve (the Fed)

Category: Gold and Silver

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The Tortoise is About to Cross the Financial Finish Line
Slow and safe wins the race

By Bob Stokes
1/4/2013 5:00:00 PM

It's true that a Treasury-bill account yields next to nothing. But at this financial juncture, the well-known saying of humorist Will Rogers has never been more relevant: "I am more concerned with the return of my money than the return on my money." Learn why Bob Prechter says that embracing financial risk because interest rates are low can be a trap.

Filed Under: all the same market theory, Bear market, conquer the crash, derivatives, Elliott wave, history, Interest Rates, investment strategy, long-term trend, market forecasts, mutual funds, personal finance, risk management, Robert Prechter, safe haven, social mood, stock indexes, Treasury bills (T-bills), treasury yields

Category: Classic Prechter

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Will 2013 Be the Year of Municipal Bonds?
A memory jog recalls what happened the last time the mainstream experts extolled munis for their immunity to default. Will history repeat itself now?

By Nico Isaac
12/31/2012 9:45:00 AM

Filed Under: credit crisis, debt, Elliott wave, Interest Rates, investment decisions, municipal bonds, pension funds, safe haven, U.S. Treasuries

Category: U.S. Economy

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U.S. Stocks: "The Only Game in Town for Investors"?
Low interest rates don't translate into high stock prices

By Bob Stokes
12/19/2012 5:30:00 PM

The central bank wants people to invest in risk-assets like stocks, so the market will go up and make people feel wealthier. Then investors will spend more and stimulate the economy. Maybe the Fed's grand plan will work. Then again, maybe it won't.

Filed Under: Bob Prechter, Elliott wave, Interest Rates, investment strategy, investor psychology, long-term trend, sentiment, U.S. Federal Reserve (the Fed), U.S. STOCK MARKET

Category: Stocks

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The Trap is Set for High-Yield Bond Investors
"Junk" bonds have that name for a good reason

By Bob Stokes
12/12/2012 5:45:00 PM

Low interest rates have attracted a swarm of yield hungry investors into junk bonds. Learn why these investors may have stepped into a soon-to-shut trap.
 

Filed Under: all the same market theory, credit rating, debt, Elliott wave, Interest Rates, junk bonds, risk appetite, Treasury bonds, treasury yields, U.S. Treasuries

Category: Interest Rates

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Why the Door May Slam Shut on the Residential Real Estate "Rebound"
How the mortgage-crisis still haunts the economy

By Bob Stokes
12/10/2012 4:30:00 PM

A securities lawyer told the New York Times that "We are at an all-time high for mortgage litigation." The lawsuits involve some $1-trillion worth of mortgage-backed securities; banks stand to lose as much as $300-billion. But this "fresh torrent" of mortgage lawsuits against banks is just one headwind that the so-called housing recovery faces. Learn what else may trip up the so called housing "recovery."

Filed Under: economic indicators, Elliott wave, foreclosures, great depression, home sales, housing prices, insurance industry, Interest Rates, subprime lending

Category: U.S. Economy

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U.S. Stock Market: Beware the Shopping Season Hype
Retail sales reports don't drive stock trends

By Bob Stokes
11/26/2012 5:30:00 PM

Positive news about holiday season sales can give investors the idea that the economy is doing well, which in turn translates to the stock market. It may appear that the recent stock market bounce and retail sales are linked. But the simple truth is, correlation is not causation.

Filed Under: economic indicators, Elliott wave, fundamental analysis, history, Interest Rates, market forecasts, stock indexes

Category: Stocks

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Why Billions in Bond Portfolios May Soon Evaporate
Muni and junk bond investors rush in when it may be the worst time

By Bob Stokes
11/15/2012 6:00:00 PM

Many who have recently rushed into muni-bonds fear the tax hikes that will be triggered if lawmakers go off the "fiscal cliff." Junk bond investors, on the other hand, want high yields. However, EWI sees financial danger ahead for bond portfolios. Learn why.

Filed Under: all the same market theory, credit rating, deflation, economic indicators, Elliott wave, Interest Rates, junk bonds, municipal bonds, risk appetite, Treasury bonds, treasury yields, U.S. Treasuries

Category: U.S. Economy

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How the Federal Reserve is Showing Financial Fear
Have you heard about the Fed's 180 degree turn?

By Bob Stokes
11/1/2012 5:00:00 PM

The central bank has thrown everything in its arsenal at the economy, but most key economic metrics have barely budged. In the epic struggle, the Fed's policy has been turned upside down. In the latest Elliott Wave Theorist, Bob Prechter noted...
 

Filed Under: Bob Prechter, central banks, Interest Rates, quantitative easing, U.S. Federal Reserve (the Fed)

Category: U.S. Economy

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How to Protect Your Wealth If An Economic Winter Descends
An old fable for modern financial times

By Bob Stokes
10/25/2012 6:00:00 PM

An economic winter may be ahead, and the best prepared households will have set aside sufficient cash or cash equivalents. It's true that actual greenbacks yield no interest, and cash equivalents earn next to nothing. Yet consider that the value of cash...
 

Filed Under: Bob Prechter, cash, conquer the crash, deflation, economic depression, Elliott wave, great depression, Interest Rates, safe banks, safe haven, U.S. dollar

Category: U.S. Economy

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