Seymour Zises, President and co-founder of Family Management, writes bi-monthly opinions on issues and observations of relevance to clients and investors.
There is no “Disputin” that Vladimir has run rings around President Obama.
Whatever the outcome is, there is little doubt that America has been diminished in the eyes of its allies and its foes.
December 2013 capped off a tremendous year for U.S. equities. The Federal Reserve has provided cheap money which has created rising asset prices. The question remains, “Is the real economy actually improving at the rate asset prices have risen?”
This past year may be marked not for what happened, but for what did not happen. The United States did not go over the fiscal cliff, nor did it default on its debt. The Federal Reserve did not stop buying bonds and mortgages, pushing the market to new highs, and inflation did not rise as many had predicted.
The Federal Reserve and its Chairman, Mr. Bernanke, decided last week to continue their bond buying program which has helped keep interest rates low and is supposedly keeping the economy from falling into another recession. With unemployment creeping lower due to the fact that people have decided to give up looking for jobs, the Fed is concerned about the possibility that housing will slow and that a showdown in Congress could lead to a government shutdown.
The summer surge in the stock market has brought the averages up approximately 20% to date, a significant year by any measure. More notable is that the interest rate on the U.S. government’s ten year note hit 2.7% in the last week of July — indeed a huge percentage increase in the benchmark interest rate over the past six months.
