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Online Savings & Money Market Account Rates 2020

Online Savings & Money Market Account Rates

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Not A Single American Hero

Throughout the long, ugly election campaign, no one stood up, save Mitt Romney who after the election seriously undercut the singular role he had fashioned.  One can make the case that no one expected Trump to win, including most Republicans.  Why take the risk, turn off your constituency, and diminish yourself before your peers if Trump was going to loose anyway?

But no one realized how much support Trump had from the white working class and from Russia.  And, now we are living the nightmare.  Every day, we are moving closer and closer to a catastrophic failure of our 200 + year experiment with democracy and world leadership.  And, no one has the courage to stand out. 

Yes, the Democrats are out there criticizing everything Trump does.  But that is not courage; that is the role of a powerless congressional minority.  It takes no courage to criticize when you are out of power and when your constituency is demanding that you do so.

Where courage is needed – where true American heroes are needed – is from Trump’s own party and from other respected voices.  And, the silence is deafening.  There is nothing, no one.  A few like Lindsey Graham and John McCain are making occasional noises, but they are posturing far more than standing up and leading. 

And the few others out there, like George W. Bush or Colin Powell or others, are eerily quiet.   Failing a single voice, we need a group, like a Council of US Presidents.  It is almost too late – almost too late to save America and its people from calamity.  I am not someone who generally says the sky is falling and I do not believe that I exaggerate.  But, as a country, we are at a precipice without a strong voice and sage leadership.  We desperately need an American Hero.

It is Going to End Badly

Alan Greenspan called it Irrational Exuberance.  Others have called it heady or intentional blindness.  But however you look at the stock market’s performance since Donald Trump was elected, it is clear that reason is not operating and that exuberance in winning.

It is going to come to an end, and pretty soon regardless of whether you are enthusiastic or not about the Trump presidency.  That is what is so distressing now – people have put aside rational thinking and have climbed aboard a train that will go over the edge, and soon.

When it all does come to an end, reason will return and folks will be kicking themselves for being suckered into a moment of exuberance.

It always happens that way.  But, never has the rise been quite so dramatic and the fall so likely to be equally steep.

Scratch any investor and they will agree that the precipice is there and that a major drop soon is very likely.

But scratch them again, and they will tell you it is just too good now and they just can’t stop.

So, it will be the few (and it always is) who will step out now and reap the benefits tomorrow, a week from tomorrow, a couple of weeks from tomorrow.

Timing is not perfect, but reason is rational.  It is going to end badly and we all know it.

Why Interest Rates May Not Rise Quickly, or Much at All

In response to this article cautioning against buying long-term municipal bonds, I wanted to outline some reasons that interest rates may rise slowly, or not much at all. Here are some items that also need to be considered when factoring in whether to invest in municipal bonds:

Global interest rates are incredibly low.  The market for securities becomes more global every day and investors worldwide have a choice between buying bonds almost anywhere in the world with low transaction costs.  So if interest rates in Germany and Japan stay minuscule, it is unlikely that Uncle Sam is going to pay so much more.

Economic growth is likely to remain subdued.  Demographics are destiny, and we have an aging workforce and are pretty close to full employment.  Economic growth is largely based on two factors – size of the workforce and productivity growth.  The workforce can get a little bigger, but if GDP growth was under 3% when unemployment went from 10% to 5%, how is it going to rise above 3% going forward?  Also, in a service oriented economy there are limits to how productive we can become.  What tools are making us more efficient at our jobs that don’t eliminate workers and reduce the size of the workforce?

An aging population means people need investment income.  Ten thousand baby boomers turn 65 every day, and they will need income in retirement beyond what they are receiving from Social Security and pension.  Bonds provide a more reliable source of income than stocks, and despite low rates they also offer a higher rate of income.

The stock market is incredibly expensive.  Using long-term valuation measures such as Shiller - PE and stock market capitalization to GDP, investors are paying a very high price for stocks.  If earnings disappoint, some money will come out of stocks and likely into bonds, keeping a lid on rates.

The budget deficit is going to rise, limiting fiscal stimulus.  The Federal Reserve already has a massive balance sheet of bonds and the interest they earn gets paid to the Treasury Department.  As those bonds mature the Treasury gets less income, increasing the deficit.  Then consider increased Social Security and Medicare benefits, and the impact of rates that have already risen nearly 1%, and the ability of our government to lower taxes or increase spending to stimulate economic growth become severely compromised.

Short-term rates may stay fairly low.  The Fed has been extremely cautious in raising rates, largely because they don’t see much inflation or wage growth.  Even if they do raise rates 4 times or 1% over the next 2 years, the longer end of the yield curve may not move up nearly as much as short-term rates, as has been the history during periods of Fed tightening.


Securities offered through Kestra Investment Services, LLC.,(Kestra IS) member FINRA/SIPC.  Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS.  J Matrik Wealth Management is not affiliated with Kestra IS, Kestra AS, or Five Star Professional.