Phil Grossfield's Blog

Frivolous Spending. Parenting Advice Requested.  Yesterday I told you about my son’s offer to pay me $57 so he wouldn’t have to take a bath. Despite my acceptance, he breached our verbal contract…but that was a different story.  But now he wants to spend $20 on Animal-Jam, an online gaming site for kids.  I am already spending $5/month for each of my kids to access this site, but now they are enticing him to spend more money for “diamonds” whatever the hell that is.  And here’s my dilemma, do I let him spend his money on this crap or forbid it?  I mean, it’s his money…he earned it.  But how do I teach him that this is throwing his money away?  The way I see it I have 3 choices:  (1) let him spend his own $20 and learn the hard way, (2) just flat-out tell him he can’t spend his money on that crap, and/or (3) tell him that if he wants to spend his money on frivolous stuff I will end his membership to the site. Any parenting advice?

MARKET UPDATE (April 3, 2015)
The Fannie Mae 30-year bond is up +36bps since yesterday’s close.  Generally a lender’s pricing improves when the bond is being bought.  Bonds reached +56bps but traders sold off some of those gains and it settled at +36bps.
SURPRISE SURPRISE SURPRISE!  This morning’s Jobs Report came as surprise:

Market expectations: 230,000 new jobs, 5.5% Unemployment Rate
Today’s Report:  126,000 new jobs; 5.5% Unemployment Rate

That’s significantly less than expectations and traders jumped all over it by investing in safe bonds.  If traditional behavior is any indication of what would happen, then traders would have sold off stocks upon hearing the negative economic report, thus paving the way for investments into bonds, but the stock market is closed for Good Friday, or Passover if you please.  What will happen Monday morning?  Will traders sell off stocks in respond to this morning’s report?  Monday is a long ways away…a lot can happen between now and then…if anything dramatic happens over the weekend it will influence trading Monday morning.

In the meantime, since the Jobs Report was so far off expectations with 104,000 fewer new jobs, I can’t help but think that traders will sell stocks on Monday.  If they do, we could see more investments into bonds and if that happens, our rates will get even better.  If you follow my analysis, then you would float your locks and wait to see what happens Monday morning.  But I must remind you, by the time the market opens Monday morning, things could have already shifted and today’s bond gains could be wiped quickly.  It’s a tough call. I can’t remember this scenario of bonds trading without any movement in stocks…it will be interesting to see how it plays out…

Read this:  U.S. Economy Gained 126,000 Jobs in March, an Abrupt Slowdown in Hiring