Friday, June 17, 2016

FOMC Statement Countdown, New Regulatory Rules For Lg/Sm Banks, Construction's Up, Employee Retention's Up & Ohio-based Firm Caught In Ponzi Scheme


  • Waiting on the FOMC to release a Statement about the fed funds rate hike at 2pm today. In the minutes from the last meeting, the Committee alluded to providing more information in the Statement regarding rate hike timing so this could be a very interesting read. The fed funds rate, which has been hovering around .12% - .13% for the past 6 months, popped up to .14% yesterday confirming that banks are easing on lending even without a rate hike.
  • The Federal Reserve Board, FDIC, and OCC finalized revisions to regulatory capital rules adopted in July 2013. The rules apply to bank holding companies with at least $250 billion in total assets and will go into effect on October 1, 2015.  
  • The FDIC approved a proposed rule on risk-based assessments for banks with less than $10 billion in total assets. "In particular, the proposal would base assessments on a model estimating the probability of failure using data from the financial crisis and prior years," said FDIC Chairman Martin J. Gruenberg at an FDIC Board Meeting. "These contemplated improvements would allow assessments to better differentiate riskier banks from safer banks, and allocate the costs of maintaining a strong Deposit Insurance Fund accordingly," he said. It is important to note that the rule appears to be "revenue neutral", but it will add a premium to small banks with riskier profiles which will increase the cost of capital.  
  • The Department of Commerce released the New Residential Construction report for May 2015. Building permits for private owned subdivisions were up 25% over last year, and 2.6% for single family approvals. Housing starts are up over 5% and housing completions are up over 14%. New Residential Construction data for June will be released on Friday, July 17. 
  • The supplemental survey to the June Empire State Manufacturing Survey and Business Leaders Survey was published yesterday and focused on recruitment and retention of workers. ~44% of those surveyed in the service sector and ~34% in the manufacturing sector said that their firms planned on increasing headcount. Only 11% and 13% of manufacturers and service firms reported that they planned on reducing employment. 
  • The SEC announced charges against Ohio-based Equity Trust Company which allowed Ephren Taylor and Randy Poulson to push a Ponzi scheme on more than 100 investors. “We allege that Equity Trust failed to protect the interests of its customers when it acted as more than a passive custodian,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.  “When custodians like Equity Trust are aware of red flags suggesting an ongoing fraud, they must take action to try to prevent it.” A public hearing will be scheduled before a law judge.  


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If you like what you're reading, please join my mailing list to receive blog posts and updates as they occur. If you're an investor with all of your assets tied up in the stock market and cash, you might want to consider a few diversification strategies. Gold is the oldest asset in the world and it's inflation proof. Bitcoin is the gold standard for the cryptocurrency world, which is the fastest growing asset class in the world. Diversifying your portfolio into one or both of these assets can help to insure your portfolio against a stock market crash or inflation. Most importantly, it can help to safeguard the gains you've made over the last 10 years.

Please note that there are other companies that sell gold and Bitcoin on the market, and you should always do your research when making decisions about your portfolio. Just like your personal health, if you're planning on having major surgery, you need to get a second, and sometimes a third, opinion. You want to make sure your surgeon is good and has performed the procedure many, many times.  In the same way, you need to trust your broker and you need to make sure they are reputable. This is the process I used when looking for a broker to recommend.

Full disclosure: RegalAssets compensates me for everyone I send their way, but I would receive compensation from any company I chose to recommend. The only broker I'm recommending is Regal, primarily due to its innovative product offering in my favorite commodities - gold, precious metals and cryptocurrency like Bitcoin. They also have a distinguished track record for success (see below).




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