After six months of deliberating, the Federal Reserve yesterday announced a plan to start tapering their purchases of mortgage backed securities and 10 year treasury bonds by $10,000,000,000 per month. Ben Bernanke said that economic data will be the determining factor to determine the momentum of easing egress in the future in our return to normalcy – whatever that is. Stocks surged and bonds plummeted on the news. Gold has also taken of being the last few days, down 3.8% today alone. The value of gold has decreased 31% since the beginning of the year, a little over the margin that the S&P has gained during the same time period. Stocks, bonds, and commodities will continue to suffer volatility while they digest what effect tapering will actually have on the markets. Volatility will be exacerbated as veteran traders will have skipped town for the rest of the year and the neophytes attempt to make a name for themselves by making big moves.
Weekly Initial Jobless Claims rose to 379,000, above the 333,000 expected, and higher than any week since last march. Who wants to look for a job when there’s so much Christmas shopping to do? Existing home sales fell by 4.3% last month, to an annualized 4.9 million units sold. Home Sales were down 1.2% from last year—this is the first yearly decline in 29 months. Because rates have been so low during the last few holiday seasons, it’s hard to remember that home sales are usually slower this time of year. With rates up, and it’s sales down, now’s a good time to buy a home at a discount—especially if you want one made of gold.