Not many remember the interest rate correction of 1994, when rates finally went up after a long decline. But plenty of fixed-income mutual funds and bond-holders got caught by surprise, in part because weird interest rate derivatives that had been placed in purportedly conservative bond funds to boost yield got especially hammered. But shortly afterward the stock market went ballistic, most of those woes were soon forgotten, and the irrational exuberance of the go-go '90s kicked in for the next five glorious years.
We might well have been looking at a similar rake-hike this year, one that despite being anticipated could still, somehow, catch some allegedly professional bond-fund managers and retail holders off-balance, except for one thing: oil prices have gone way down, keeping a heavy lid on inflation worries. Right now, it looks like those prices might remain low for a while:
Oil prices fell towards $57 a barrel on Wednesday after the largest weekly build in U.S. crude inventories since 2001 and as Saudi Arabia reported record output in March. The U.S. Energy Information Administration (EIA) reported that U.S. stocks of crude oil rose in the week to April 3 by 10.9 million barrels - the largest weekly build since March 2001 - to a record 482.39 million barrels. A Reuters poll of analysts had forecast a build of 3.4 million barrels.
"The report is very bearish with the large crude oil inventory build and the somewhat surprising rise in gasoline inventories," said John Kilduff, partner at Again Capital LLC in New York.
- I wrote about my frustration with Windows 8 a few days ago. Based on the supportive email since received and the personal therapeutic value of a good rant, I feel it should be harped on again. More importantly, this community really came through with tons of savvy, helpful comments. In contrast, tomorrow, I write about a very different kind of company, and the amazing effect good business practices can have in securing lifetime customer loyalty.
- Orac fisks the FoodBabe and Vox follows up:
If you needed more evidence that you can basically say anything about health — no matter how nonsensical and ridiculous — and win a massive following, consider the recent rise of blogger Vani Hari, also known as the Food Babe.
Most of the models of the giant-impact theory often say that more than 60 percent of the moon should be made of material from Theia. The problem is that most bodies in the solar system have unique chemical makeups, and Earth, Theia and therefore the moon should as well. However, rock samples from the moon reveal that it is puzzlingly more similar to Earth than such models would predict when it comes to versions of elements called isotopes.