Peter Yastrow's Blog

The Way to View the Market

It always fascinated me, when the catburglar would slip undetected into the vault and freeze up against the wall. Then, he would pull out a special battery powered pair of glasses, and the laser beams that had been invisible, were suddenly visible. With the glasses on, the burglar slipped by all of the beams that might have otherwise fried his onions.

The recent moves in the markets have fried some onions as well. The rally in stocks caught many by surprise and has frustrated even the bulls, who never bought all the shares they wanted (needed). Commodities have rallied. The Yen, EURO and Pound have rallied, and bonds are rallying. Certainly these crazy markets are out of control… until you put on the cool battery powered glasses.

Look at everything through the lens of interest rates.

Interest rates in this country have been driven lower through a concerted effort by the Federal Reserve Bank and the U.S. Treasury. In response to the recent economic woes we are suffering, our government responded.

Low rates – we are in an “artificially low” interest rate environment.So when we look at any market, we should look at how extremely low rates will effect it.

Commodities will rally. The economy is awful, and you might think that no one has money to by gold or gas. WRONG. Lower borrowing costs make it easier to buy and hold these non-financial assets.

Bonds will rally. Printing money should lead to inflation, which leads to blah blah blah- too complicated. Interest rates low = bonds rally.

Stocks should also rally. Many people over-think this one too. They say the rates are low because the economy is bad, and stocks should be bad…yadda, yadda. NO!

Interest rates low means stocks go up. The future earnings are more valuable today because of low rates. Period.

No matter what the aspect of the market you want to look at: Use the Interest Rate Glasses. Understanding how amazingly low interest rates impacts these assets is the key to understanding the current market conditions.

Tags: bonds, catburglar, commodities, housing market, interest rates, investing, stock market

The Right to Choose

(or, Get Your Laws Off My Body)

We have an impassioned country arguing about health care. Nobody wants to see anyone denied healthcare. I’ll say it again, nobody wants to see anyone denied healthcare. People are just as compassionate on both sides of the political aisle; they want to help their fellow man just as deeply. The concern is over cost, and the amount of money we will spend on every patient.

How much healthcare do we provide?

Does a homeless person, who comes into the hospital emergency room, get the following treatments?

1. Stitches

2. Casting for broken bones

3. Physical therapy

4. Follow up x-rays

5. Medicine

6. Massage therapy

7. Joint replacement

8. Acupuncture

9. Crutches

10. Wheelchair

11. Viagra

At what point will we draw the line?

More importantly, who will draw the line, and based on what criteria?

Suppose we are not talking about a homeless person. Suppose it is your neighbor. She is a working mother, with two kids and a dog. She takes the dog for a walk, and when she wakes up the next day, her arm hurts. Her arm hurts so badly, that she calls into work, and says she’ll be late because she is going to get her arm checked.

The neighbor goes to the doctor. The doctor examines the woman for a few moments, and says that it looks like tendonitis, but they should get an X-ray to be sure. The X-ray is inconclusive, and the doctor suggests an MRI. The woman gets an MRI that very afternoon, and it confirms the doctor’s suspicion– tendonitis. The doctor gives the woman a fitted arm brace and a prescription for a pain reliever.

The woman has used the services of nurses, doctors, X-ray technicians, MRI technicians, radiologists and orthopedists– not to mention the insurance company. They all need to be paid. The neighbor could easily have spent $2,000 of our healthcare system money all because she had a little pain in her forearm.

Were these costs justified, necessary or excessive? Who should decide whether or not the neighbor is taking advantage of our system?

That’s exactly why we can’t have a system. The individual should decide, not a huge bureaucratic entity.

The freedom to decide what treatments a person will receive and what treatments a person will forgo should be an inalienable right. We speak of our freedom of speech, and to gather; we take pride that we are the land of the free.

Which freedoms are included? The freedom to determine the course of treatment or will that be sacrificed? The freedom to pursue more tests or will that be sacrificed?

The freedom to decide must be preserved. Preserve the freedom of decisions regarding our healthcare. Do not let the government decide if you need an X-ray, a brace, a shot… The government will be forced to take away our freedoms, in order to achieve a more efficient, cost-effective system. The protocols will be pre-determined. The doctors will be forced to follow regulations and rules. As the government improves our healthcare with more efficient decision making and streamlining, our individuality will be sacrificed.

J.o.y. to the world - Peter

Tags: freedom, healthcare, individuality