Friday, June 22, 2012

Where Are Interest Rates Headed?

This post describes a methodology for using the current yield curve to forecast future interest rates.

In the current economic environment, the direction of interest rates is a critical issue for many investors -- especially for retirees. You probably know that you can use the yield curve to forecast the direction of the economy. But, did you know that you can also use the current yield curve to forecast the shape of the yield curve one, two or three years or more in the future? Read on.

The Bond Market's Forecast of Interest Rates 1, 2 & 5 Years From Now

Future interest rate forecast: Yield curve 5 years from now
Market Forecast of Future Yield Curve/ Interest Rates

In the graph above (click to expand), the heavy black line is the current yield curve (as of June 15, 2012). The other three lines are the yield curves as they are expected to be 1, 2 and 5 years in the future. The shape of the future yield curves was derived directly from the current yield curve.  As you can see from the chart, the forecast is for rates to remain depressed, even as they rise gradually over the next five years. Two years from now (the green line), the one-year rate is forecast to be barely above 0.5%; five years from now (the dotted red line), the five-year rate is forecast to still be less than 3%.

Deriving Future Yield Curves From the Current Yield Curve

To understand how this model/spreadsheet works, consider the following. If we know the current one year interest rate and the current two year interest rate, we can calculate

Friday, June 15, 2012

Syncing Android Calendars with PCs (MS Outlook)

This post describes a method for keeping Android calendars and MS Outlook PC calendars in sync that works for most Android smartphones. {Note: The Google Calendar Sync software described in this post has been discontinued.  Instead, consider the software described in the contact sync post. Please leave a comment if you have found an even better alternative.}

My Motorola Droid RAZR has been a valuable addition to my computing capabilities. However, my desktop PC is still the center of my computing world.  With the advantages of multiple computing platforms comes the burden of keeping Microsoft Office in sync with my phone. This post describes how I synchronize my calendars/ appointments.  (procedures are included for Jelly Bean, ICS (ice cream sandwich), and Gingerbread)

Synchronizing PC (MS Outlook) and Smartphone Appointments: Using Google Calendar as an Intermediary

synchronizing Android smartphone appointments & calendars with PC (MS Outlook) calendars / appointments
Syncing Android Smartphone & PC Calendars

The key to this approach was to use my Google calendar as an intermediary. Since all Android phones can communicate with Google/Gmail accounts, and Google accounts can communicate with Microsoft Outlook, all Android phones should be able to communicate with MS Outlook. First we'll look at syncing the Google calendar with the Outlook calendar, then syncing the Google calendar with the phone calendar.

Sunday, June 3, 2012

May 2012 Stock Market Update

Stock market (DJIA) monthly performance / closing prices for last 12 months
Dow Index Monthly Closes Through May, 2012


A month ago, I reported that we had just completed a month that, for all intents and purposes, ended right where it started.  Not the case this month. This month was -- ugly.  It started with a new 52-week high on May 1, and then went south. The first half of the month was characterized by continuing concerns about Europe.  By the end of the month, the concerns were much closer to home given increasing evidence that the recovery may be stalling.

The result was a month awash in red. For the whole month of May, there were only five days when the market finished in the black. Predictably, there was another rush to treasuries.  So much so that by the end of the month the 10-year note had established a new all-time low;