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Alliancebernstein Income Fund Message Board

  • c_wallis_jr c_wallis_jr Jul 6, 2013 2:16 AM Flag

    Don't panic. The Fed will continue to buy bonds longer than anyone imagines.

    -- The unemployment rate U3 REMAINED at 7.6%.
    -- U6, the broader measure of unemployment that includes discouraged workers and part-time workers seeking full-time employment, INCREASED to 14.3% from 13.8% the prior month. This is highest percentage rise since 2009.
    --The number of persons employed part time for economic reasons- involuntary part-time workers- INCREASED by 322,000 to 8.2
    --Among those currently counted as unemployed, 36.7% of those have been out of work for six months or longer, well above pre-recession levels of less than 20%.
    --Over 1/2 the jobs created were in the retail and hospitality / leisure sectors which are generally lower- paying* and may not be sustainable due to seasonality, higher credit rates, etc.
    --Average variable credit card rate at 15.2% (ridiculous) could easily slow consumer consumption.

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    • Appreciate the feedback. Did some research on 10 yr interest rates. There was a spike in 1994 at 8% then gradually downward until current levels. The average high spike from 2001 to 2013 was 4.1%. My wife calmed me down by saying that rates will only go up to a given level and then will come back down when it becomes unsustainable (common sense) for the economy. Looks like these bond funds should be able to weather any storm. Also, portfolios can be restructured over time.

 
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