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World Markets – Schools – Financial outlooks- Trump goes it alone

Trump – my turn

If Trump cured cancer

45th President of The United States Donald Trump wins HoaxAndChange.com

This is a great read!!! Just wish the American people understood this. Trump does and does his best to correct the problems without any Dem support and in some cases no support either from some Rep.. If he loses the next election, we all had better started looking for a remote island to get away from the insanity. Prophet of doom maybe, but a realist for sure.

For the past ten months we have been deluged by opinions about inverted yield curves. Some recent research was done that shows that as rates dropped, there was a rush to refi, and that means prepay mortgages. That means institutions holding mortgage backed bonds were left with unbalanced portfolios, and had to buy other new hedges, or new bonds of longer duration in order to better match the duration of their liabilities to pay pensions or annuities. That was triggered in most cases by algorithms that manage the portfolio balance. That triggers buying large quantities of longer dated bonds including ten and thirty year maturities as the cash from prepayments rolls in. One expert postulated that rates would be as much as 25BP higher if it were not for the rush of institutional investment to reinvest proceeds from prepaid bonds as rates declined, thereby triggering more ten and thirty year bond buying. Bottom line, don’t take the inversion as a clear sign of pending recession. It might be partially due to technical factors driven by algorithms.

In another study covering whether it is best to float or fix, they concluded several things. Ignore economists’ predictions of rates. They are mostly wrong. In fact, most bond traders, and other pundits, are wrong if they try to predict rates over the next 5 years. Old time bond traders from Solomon Bros days mostly said trying to predict where rates will be over several years is usually a losing exercise. We have seen this to be true over the recent periods. So as a general rule, when rates are very low, as now, fix, and when rates are high and rising stay floating, and over time the net cost of interest will be lower than if you fix at high points and pay the premium that long term fixed carries over floating. If you fix when rates go high thinking you will protect from even higher rates, you will likely make the wrong decision. There has been extensive long term research to show this. It pays, if you float, to examine if a good hedging strategy is needed, and at what strike price. I am not an interest rate expert, nor very knowledgeable about hedging, so go to a good firm that does those things for specific advice. Just keep in mind that when a bank sells you a cap or hedge, they are trying to make a profit on that trade, so it is best to go to an independent firm that does interest rate management, and let then help you decide, and then let them buy the hedge for you. It will normally be less costly and will be documented better for you.

What to make of Brexit now is another impossible exercise. Johnson has lost control of events. Johnson was right to threaten the EU with a hard Brexit, but Parliament, like Congress had no understanding of how to negotiate these things. Parliament made a mess of this, again. I thought nobody was more stupid than the US congress, but now I think Parliament has surpassed us. The deal May struck was terrible, and what Johnson was attempting to do was materially improve it to make it the Brexit that people voted for. By trying to force another 3 month delay, Parliament told the EU, just stand firm, and it is OK to screw us. Similar to what the Dems are trying to with Iran negotiations, USMCA, and the border. It is now unclear if Brexit ever happens, given that the deal on the table was rejected three times, but now the EU has no reason to agree to any changes. It is clear now that the UK is a mess, and it is not going to get better for quite a while. In the US, since there is no longer any bipartisanship, Trump has to go it alone. If he let the Dems have their way we would be back to the terrible Iran deal Obama made, and the bad NAFTA deal, and the Iranians, Putin and Chinese would run all over us, as they did with Obama. The world would be much worse off. Just look at Micron trying to help Iran cheat and get $15 billion cash so they agree to comply with what they already agreed to do, and nothing more. How stupid is that. Macron acts just as Obama did, so the Iranians can continue to pay Hezbollah and Hamas, and support attacks on Israel, and the Saudis. Macron is who the liberals want as part of the US negotiating team with XI, along with others from the EU. It demonstrates how weak the EU really is. I am sure Putin is noting all this. They have the same issues in Britain as we do- a legislative branch that has no clue about how to negotiate, and is trying to undercut the chief executive to the detriment of the country.

The teachers union has now convinced virtually every Democrat governor and Mayor to stop charter schools. None are being opened at this moment. The waiting line of minority kids to get in is very long and growing. No matter what teaching methods are introduced, including all kids having computers and online work, reading and math scores in minority schools have not improved, or have declined. More computers and more money has done nothing for the kids. They are still failing, and their futures are being sacrificed to the teachers unions and pensions. Disruptive kids are not punished now in urban schools because that is deemed to be racist and unfair. So all the kids suffer badly because learning is disrupted. Political correctness is destroying thousands of minority kids hope for a better future. Charters do not tolerate that crap. The well run charters way out perform public schools. Until minority parents take an active interest, and demand a change of polices, and a change to non-union schools, and until the community culture of assumed failure is ended and replaced with the hard work drive for success of the Asian culture, we are going to have failing schools and a lack of opportunity for thousands of black kids. It is not discrimination that has the Asian kids outperforming even white kids in school, and black kids being materially behind as measured by the standard tests. There is no evidence that diversity in university makes education and future success any better for anyone, and there is plenty of evidence it makes it worse for black kids who are accepted to schools where they are not qualified just to fill the black quota.

There were 7 young black men murdered this past weekend in Chicago. 30 more were shot, in just one weekend, in just this one city. That is the same number who died in the random shooting in Odessa. There were lots more black on black murders last week in Baltimore, St Louis, Newark, LA, and other urban cities run by Democrats. Over the past 5 years there were 65 US soldiers who died in Afghanistan in combat. They kill that many young blacks in Chicago in less than two months. Do you hear a word from any Democrat about this carnage. All you hear is attacks on Republicans and Trump over gun laws. Shooters in Chicago do not buy guns legally. They buy them on the street where they are readily available. Yet Chicago has some of the toughest gun laws in America. So now the mayor blames the Republicans for the gun violence claiming it is because gun sales are legal in Indiana. Classic. She takes no responsibility at all, and does nothing, but blame the GOP. The real problem is the city agreed to an ACLU agreement which keeps the cops from doing their job. Now judges let them out with no bail or minor bail, so the violence continues. A step NYC has just taken to have no arrests for many misdemeanors and no bail. Congrats to the ACLU for materially increasing the number of murders and shootings in Chicago. In the past two weeks the arrest rate in NYC dropped 13% since the Pantilo decision by the commissioner. The Dems just do not get it. Giuliani showed how it is done, but the left thinks letting cops stop and frisk and take guns off the street, and be aggressive, is racist, so instead black kids die or get shot, and black neighborhoods become worse than actual war zones. And you wonder why these kids act out in school? It is just like the school problem. Do not touch the black kids, and do not really punish them, so instead they all fail or die. That is current left wing policy at work.

George Banks // Managing Partner// Priderock Capital Partners, LLC 525 Okeechobee Blvd. // Suite 1650 // West Palm Beach // FL // 33401 T: 561-653-9332 x222 // C: 561-379-9178 // F: 561-653-9942

World Markets – Schools – Financial outlooks- Trump goes it alone World Markets - Schools - Financial outlooks- Trump goes it alone This is a great read!!! Just wish the American people understood this.

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