Joseph G. Witthohn, CFA
VP of Product Development Emerald Asset Management

Good morning.

Stocks are down this morning as the possibility exists that the 10-year bond yield jump above 3% woke up a few investors who had been happily unfocused on bonds (and the effect they can have on equities) for quite some time.

Why does this bring worry?

An interesting comment from Goldman Sachs, reported via CNBC, not only gives the view that rates could rise to 3.6% next year … but “the deficit growing at a time when the unemployment rate is falling … hasn’t happened in peacetime since World War II.” The morning article (same sources) points out that more bonds will need to be issued … and with the U.S. “no longer a player in the market” … will introduce us to the scenario of greater supply and few buyers. The result of course? Higher interest rates!

So those who look at our growing national debt and shrug their shoulders, feeling there will be little effect … might soon think otherwise … as a pop in rates would be expected to have an effect on so many things.

Borrowers of the future, beware!

Wow, I didn’t mean the above to sound so negative. Mornings when the Dow is down over 200 points does tend to put me in a bad mood, but I’ll get over it. We still have the rest of the day … and the days ahead …for optimists to focus on positive aspects of the economy … of which there are many … and hopefully turn this boat around.

There is one more thing that is quite interesting to point out this morning.

Mark Zuckerberg turned 34 yesterday. Why am I mentioning this? His net worth is listed at $74 billion.

Let’s think about this a moment … and get ready to impress those gathered around the water cooler today.

… for every day Mark Zuckerberg has been alive … he has made:

$6 million dollars!

Now I am more depressed than before.

Have a great day,

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
wit@teamemerald.com

… as of 10:20 AM …

Quick Look at the News

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