June 2019

A divided Fed holds the line on interest rate cuts. How does this affect you in your portfolio? June 19: The Federal Open Market Committee met this afternoon, and they lowered their inflation forecast to just 1.8%. That’s about as close to the sweet spot as an economy can get. All eyes were on the Fed, however, to see how they responded to the European Central Bank’s decision to lower their interest rates. And in what is a thumbs-up for Fed independence, by a nine-to-one decision the Fed decided to hold the line on interest rates, while noting that it’s very possible in the next 12 months that they would be dropped by maybe a quarter of a percent. So there are two threads going on here that are important to you as an investor. First and foremost is the issue of Fed independence. As the president makes thinly veiled...

As we know, Occidental is purchasing Anadarko. And ever since the purchase has been announced, their stock has been pummeled. In fact, June 5th, the stock dropped a full 4%. What's going on here? I mean there's nothing wrong with Anadarko. What's going on here is leverage. Occidental is using an enormous amount of leverage to make this deal happen. We actually had a video about a week or two ago where we discussed some of the components of this deal. But, long story short, Occidental is going to be under intense pressure to sell assets. They've already got assets for sale in Africa to Total Energy out of France. They're probably going to have to sell those towers. They've got to get the debt under control. So where does that leave the employees? Well, unless you're out in the Permian Basin or there's something unique about your skillset, you're...