Moody's downgrade of U.S. government debt is kind of a non-event.
The other two major credit rating agencies already downgraded this debt years ago.
However, we should heed Moody's rationale.
Here is their rationale, in part:
"Over more than a decade, US federal debt has risen sharply due to continuous fiscal deficits.
During that time, federal spending has increased while tax cuts have reduced government revenues.
As deficits and debt have grown, and interest rates have risen,
interest payments on government debt have increased markedly."
"Without adjustments to taxation and spending, we expect budget flexibility to remain limited,
with mandatory spending, including interest expense, projected to rise to around 78%
of total spending by 2035 from about 73% in 2024. If the 2017 Tax Cuts and Jobs Act is extended,
which is our base case, it will add around $4 trillion to the federal fiscal primary
(excluding interest payments) deficit over the next decade."
"Underpinning the rating is our assumption that the US' institutions and governance will not materially weaken,
even if they are tested at times. In particular, we assume that the long-standing checks and balances
between the three branches of government and respect for the rule of law will remain broadly unchanged. In addition, we assess that the US has capacity to adjust its fiscal trajectory,
even as policy decision-making evolves from one administration to the next."

Hi @Mark Thank you.
Total Return link is interesting and useful.
We've always performed simple math for inflation and eventual taxation of our investments and what the 'real return' will become.
In the pre-internet days with access to data via the WSJ and Baron's, I used 5% for annual inflation impact to be ahead of the curve (hopefully). The was during the period of some very serious inflation for many of we 'older' investors.
However, equity/bond investing has provided more than the bank/cu accounts so many folks have used for many years. And the knowledge gained in all things financial over the years has allowed us to award our own degrees in 'economics' to ourselves. :) We've been able to share and pass along the knowledge.
Compound, compound, compound !!!
Remain curious,
Catch

yes, crypto crime utility has many years of growth ahead, boosted with support by politicians and traditional institutions that want a cut of transactions..
criminal 'B2B' volume dwarfs all other activity, and probably most nations' currency.

Treasury yields rise as expected from Moody's downgrade on Monday, May 19, 2025. 30 years yield rose over 5.0%, all time high for the year.
https://cnbc.com/2025/05/19/us-treasury-yields-moodys-downgrades-us-credit-rating.html

Jason Zweig believes alternative assets do not belong in 401(k)s.
"Whether we’re talking about a smaller firm like Redwood or the giants of alternative investing,
the same rule applies: Assets that don’t trade every day aren’t low risk just because they don’t trade every day.
And, until costs come down and conflicts of interest are ironed out, stuffing private assets inside a fund
that does trade every day is a rotten idea for retirement savers."
https://www.msn.com/en-us/money/savingandinvesting/this-new-investing-idea-isn-t-right-for-your-retirement-plan/ar-AA1EUSqV

Other than TIAA RE, which has proven itself over the years, I think Jason is spot-on correct, as I mentioned earlier. The average person is not in a position to research (or understand) the nuances and intracasies of illiquid investments ... heck, most people have no idea about things like 'fundamentals' or 'moats' or whatnot when it comes to just buying *stocks*.

"Lagging." Grinning, here. Is that meant to reassure? Or admit to the fact that our debt burden has been astronomical for MANY years? So, we're totally screwed.

Nice chart @bee / Pretty bubbles. I didn’t realize Franklin is so high. Must be their legacy OEFs. Their etfs are quite reasonable. One good one I’ve held before is LVHI which continues to ”shoot the lights out.” I track it expecting it to falter - but it hasn’t.
I wonder if fees become less significant with age? Yes, at 35 years of age with 30 years until one begins pulling IRA distributions a tenth or quarter of a point is a big deal due to the long term compounding. No argument. But for a 75 or 80 year old picking a fund (often hybrid types designed to hedge risk) I’m not so sure fees are a big deal. OTHO if that 75 year old is investing only in short term credit or cash, I suppose a quarter point is still a big deal.

Anent the fantasy of US "reindustrialization," Krugman today:
The economy changes over time, and so do the industries in which people work. A century and a half ago, despite rising industry, America was still largely a nation of farmers; today hardly any of us work on the land:
Oh, and many, possibly a majority of farm workers are foreign-born, with many of them undocumented.
You don’t hear a lot of nostalgia for the days when agriculture dominated employment, although some politicians still portray rural areas and small towns as the “real America.” (If you ask me, Queens, New York comes a lot closer to being who we are now.)
There is, however, a lot of nostalgia for the 1950s and 1960s, when more than a quarter of U.S. workers were employed in manufacturing. Income inequality was much lower in that era; many blue-collar workers considered themselves middle-class. And there’s a widespread narrative that
(a) attributes those good times for workers to the availability of well-paid jobs in manufacturing, and
(b) attributes the relative decline of manufacturing to outsourcing and trade deficits.
But is this narrative right? It’s a simple, compelling story, but as I tried to explain to Clinton all those years ago, the math doesn’t work. To preview the conclusions: Even if we could somehow eliminate our trade deficit (which Trump’s tariffs won’t do, but that’s another story), America wouldn’t reindustrialize — our manufacturing sector would be slightly bigger, but nothing like what it used to be. And any wage gains for ordinary workers would be trivial at best. ...

Thanks @yogibearbull. Nuveen’s “CEF Connect” site does display not only the chart view but also the actual gain / loss for NAV and price in table form. 20 years appears to be the max allowed. I just needed to dig deeper. . M*’s chart wouldn’t work when I tried it. Refused to lock in both start and end dates selected.
We are fortunate to have participated in the 07-09 financial disaster - in the sense a lot can be learned from the experience. 17-18 consecutive “down” months doesn’t sound like a long time until you’re experiencing it.

Make if Off topic, but a lot of this has significant investment implications.
Methinks there should be more facts of the Middle East trip, for one. Barron's reports today that Trump canceled all of the in place limitations on those countries transferring to China or facilitating China's use of the high end NVDA chips. Any connection to Patel, Wise and Bondy previous lobbying fro Middle Eastern nations? Why does this or the other severe cuts to cyber security and national security staff and funding make any sense?
A Chinese firm with no revenue linked to Tik-Tok somehow bought $300 million of Trump's coin. If this is not a bribe, I don't know what is.
Moody's just cut USA credit rating.
The facts about the cuts to cancer, Alzheimer's and other biomedical research are undeniable, and will have significant negative implications on USA biotech and health companies and on your and your family's health.
https://www.science.org/content/article/nih-insiders-trump-dismantling-and-destroying-everything#
30% of research grants have been cut, in some cases many more. These are not "DEI" grants as MAGA claims. These are basic research into the mechanism of diseases and cures and into individual susceptibilities.
RFK lies in public claiming " no working scientist" was fired when the heads of at least four Research Institutes were terminated, along with hundreds of scientific personnel.
https://www.science.org/content/article/trump-proposes-massive-nih-budget-cut-and-reorganization
The 2026 Trump budget proposal is seeking to cut $33.3 billion in discretionary funding for HHS, representing a 26.2 percent reduction compared to the fiscal 2025 budget.
This includes a $3.6 billion reduction in discretionary funding for the Centers for Disease Control and Prevention (CDC), an $18 billion reduction ( 37 to 45% ) for the National Institutes of Health (NIH).
Never before have the major Government health institutions been lead by people (even if they have an MD) who have never seen a patient and who do not have medical licenses, much less people who not only know nothing about science and medicine and research but who endorse views and beliefs about science and medicine that have not been accepted since the 18th century or earlier.
While some on this board may think research funding is a spigot that can be turned on easily, I know better, having spent my career in medical practice and research. I have sat on NIH review boards determining which grants get funded. These research labs have taken years and decades to put together, with dozens of specialized staff. They have made the US the envy of the world in biomedical research and medical treatments.
No more. Many of our best people are leaving for Canada, Ireland, UK and Europe where they are assured the funds they need will be there.

At Observant1. I took note of the fact that D&C Global has out performed their domestic bond fund DODIX for all periods going back ten years.

Over the past several months, we’ve seen hundreds—if not thousands—of “on-fire” opinions from posters, pundits, and even Nobel Prize-winning economists. Many insisted these issues were directly tied to the markets.
Among the loudest claims:
• The economy is in shambles.
• Inflation is going to destroy us.
• The stock market is doomed.
• Tariffs will be disastrous for consumers and the markets.
• The southern border can’t be secured, and violent criminals can’t be arrested.
• Boeing is finished.
• Anything going wrong in the U.S. is Trump’s fault.
The Reality:
• The S&P 500 is up—positive performance for the year.
• The economy is stable. Nothing major has collapsed.
• Inflation has declined from 3% to 2.3%. Employment remains solid.
• The southern border is more secure than it has been in years, and many violent criminals have been apprehended.
• U.S. businesses have been and continue accelerating their shift away from China.
• Tariffs, as any reasonable observer would note, were a bargaining chip. The U.K. signed a deal. Others are negotiating. If India signs, it will be a significant milestone. The EU is finally engaging seriously. In the next several months you will see more. Any agreement where the US gets a better deal is a win. It doesn’t matter if it’s 5%, 10% or more. The US is like Amazon or Apple; you pay to sell your merchandise or software.
• China remains a complex challenge, but no one expected a quick fix. Even if an agreement came, skepticism would still be warranted. The broader focus is shifting global trade relationships while collaborating with others.
• The U.S. has seen a surge of private and foreign investment that are fueling job growth, innovation, and opportunity across every corner of the country https://www.whitehouse.gov/investments/
• The Middle East trip was a huge success, more business, and hopefully regional realignment is underway.
• The US brokered a ceasefire fire between India and Pakistan.
• Boeing has secured billions in new business.
• A deal was signed with Ukraine for access to minerals, hydrocarbons, and infrastructure development.
What to Expect from the Left:
• Denial of progress.
• Minimization of any agreement.
• Distractions, instead of cooperation on long-standing shared priorities.
• Focusing on trivial issues while ignoring major developments.
For example, the outrage over Jamal Khashoggi’s killing becomes the headline—while major diplomatic breakthroughs in the Middle East go ignored. Uniting the region against Iran, China, and Russia; increasing U.S. business opportunities; lowering oil prices; and cutting off funds to terrorism and war—those are significant outcomes.
Let’s not forget:
• Who brokered the Abraham Accords?
• Who dismantled ISIS?
The “on-fire” posts will likely continue for years.
The conclusions:
* We should go back and discuss investments.
* Politics and worries don’t have a high correlation to our portfolios and why we should disregard them.
* Your political side can’t be always right, and the other side can’t be always evil and wrong. Why the nonstop 110% on-fire outrage ranting and name-calling? People lose the ability to tell what’s truly serious.

16 May, 2025. Dani Burger is in.
Consumer sentiment at 2nd-lowest level on record. Univ. Michigan survey. Uncertainty is the word, these days. Tony Rodriguez (Nuveen) and Robt. Tipp (PGIM.) Inflation fear is a bit more "legitimate" than the Consumer Sentiment survey, because the UM survey mostly missed the latest info re: trade deal with China. Just a calendar matter, even though the UM survey is a routine institution, going back years and years. Still, a consumer slowdown will negatively affect the economy, though not to the point of a recession. 10-year rate probably around 4.25% by year-end. 30-year maybe at 5%. that would be attractive to would-be buyers.
...Pressure in budget discussions re: federal debt. (And Moody's just DOWNGRADED U.S. debt!) Tipp thinks that HY bonds will not disappoint, with not too much volatility, looking back from 10 years hence. ...Burger addressed the distinction between irresponsible deficits vs. stimulus that could serve its purpose without driving up inflation: Tipp responded with "all things are relative. Look at the Big Picture, compared to France, elsewhere, the EU. We could raise taxes more easily than they could, "if need be." ("If need be???" Are you on drugs?????). "Everyone in the Developed Market club is 100% debt to GDP these days." (I guess the value of the dollar doesn't matter to Tipp very much?)
CREDIT ISSUANCES: Europe, busiest week since January. McDonald's, Pfizer Yankee Bonds. Total, YTD reverse Yankee Bonds out of Europe = 82B euros.
UPS, US Bank, Woodside, SocGen and Truist. Above $40B for 2 weeks running.
JUNK: Kohl's, Carnival.
Credit spreads are expected to remain tight. Amanda Lyman and Winnie Cisar. LYMAN: optimism in the midst of the uncertainty. CISAR: April volatility was short-lived.
Spreads are wider than at the start of the year. No way to time the Market, best to make sure you're not under-invested. We've been experiencing 18 months of momentum. But let's see what happens after the 90-day countdown to the end of suspended tariffs. It's Ok to "selectively" move down in credit quality. Liquidity still looks healthy. LYNAM: all-in yield is still attractive.
https://www.bloomberg.com/news/videos/2025-05-16/bloomberg-real-yield-05-16-2025-video

The Week in Charts (05/16/25)
The most important charts and themes in markets and investing, including:
00:00 Intro
00:53 Topics
01:52 Both Sides Blinked
04:58 One of the Greatest Comebacks in Market History
08:25 What a Difference a Month Makes
12:49 Lowest Inflation in 4 Years
19:49 Watch What They Do, Not What They Say
26:26 Healthcare Sector Woes
30:55 The New/Existing Home Divide
35:00 Rising Real Wages
Video
Blog

Got to get a kick out of this “all bark and NO bite”.
Asian Leaders See Right Through Trump’s Tariff Man Act

President Donald Trump just taught a masterclass in how to lose a trade war. His spectacular retreat on China tariffs in Geneva this week—for very little in return—has officials across Asia sighing with relief.
Trump’s slashing import taxes on China from 145% to 30% increases the odds Asia’s biggest economy will achieve its 5% growth target this year. That will be a boon for growth and markets across the region. And other Asian governments now have a blueprint on how to slow-walk Trump’s bilateral trade deal process and avoid giving away the store to America’s most mercantilist leader in 125 years.
A caveat: Trump won’t be happy to read the many headlines about him caving in Geneva, nor will he be pleased to learn China isn’t about to throw big concessions his way. This unflattering news cycle could see the “Tariff Man” return to negotiating tables with a vengeance.

https://apple.news/AATAs-ngPRjqT835j3HvWeQ

UBS is shutting its robo-advisor.
In 2024, JP Morgan shut its digital-only robo-advisor, and Goldman Sachs shut Marcus Invest (robo accounts were sold to Betterment).
While Rohinhood is getting into robo-advising.
More popular are hybrid robo-advisors that add human intermediaries.
Big players are Vanguard, Schwab, Fidelity, Betterment, Wealthfront (few years ago, UBS almost bought it, but now UBS quits this business), etc.
Most buyers of robo-advisors may be fine with traditional allocation funds or TDFs (with glide-paths).
https://www.barrons.com/advisor/articles/ubs-to-close-robo-advisor-45ba41cb?mod=RTA

Katie Stockton?
A month ago she said "Investors should use the relief rally to reduce exposure, says Fairlead’s Katie Stockton"
Watch it at https://www.cnbc.com/video/2025/04/17/investors-should-use-the-relief-rally-to-reduce-exposure-says-fairleads-katie-stockton.html
Just for info, Katie Stockton has been managing a "great" fund, called TACK for over 3 years with a pretty bad performance. See the chart https://schrts.co/ZSnmTnxR
For 3 years both TACK and PRWCX have similar SD about 11, but PRWCX made 90% more (almost double) 19.3% vs 36.6%.
So, what happened if you sold a month ago? you missed about 10% of the SP500

Well stated @a2z
Gambling is a bad habit and very addictive. Over time I’ve gotten reasonably good at keeping myself on a short leash in that and several other respects. :)
As far as sitting tight on savings … when I replace a window in my home identical to the one I paid $400 for 6 years ago and from the same dealer and now pay $720 for it - and with a much longer shipping time (6 weeks vs 3 days) it makes me want to reach a little for return. Each to his own.

That article is from 1/24/2025. (Wall Street underestimating)

Good catch. My goof. However I listened to Ives last evening on Bloomberg repeating the same belief. comment. If I can dig up a more timely citation I’ll

revise my original comment. Thanks @gman57.

It happens a lot, I try and triple check because I sometimes see something and go wow that's interesting not realizing it's a few years old. They don't even put dates on some articles.