Treasury Bond Yields are Falling

Treasury bond yields are falling following a sharp drop in U.S. Nonfarm
Payrolls numbers. 10-year Treasury bond yields fell below 3% for the first
time since the depths of the financial crisis.

Interestingly, the weak employment numbers and the drop in Treasury yields
coincides with the end of the Fed’s bond-buying program known as QE2.

QE2 was designed to increase the supply of cheap money and encourage
investors to enter the stock market. But with QE2 scheduled to end in just
a few weeks, investors are beginning to exit the most risky stocks.

When uncertainty rises in the stock market, investors start buying
defensive assets like dividend stocks. High-yielding dividend stocks are
especially attractive in the current environment because they are among the
only assets that can guarantee investors a return that will beat inflation
and Treasury bond yields.

To learn how you can secure your future wealth with top-paying dividend
stocks with yields as high as 7%, 8.5% and 10.8%, please click
HERE.

Wall Street’s Herd Mentality

As expected, today’s Nonfarm Payroll number was
just as bad as the ADP Payroll indicated it might be. Expectations were
that 165,000 jobs were added in May. The reality is that we got only
54,000 jobs.

Soft patch, indeed.

The economy has been adding an average of 220,000
jobs for three months running. 54,000 is a big miss, big enough to push
the unemployment rate up to 9.1%.

Lost in the Shuffle (intc, rtn, msft, tlt, aapl)

It was somewhat lost in the shuffle in Wednesday.
Investors were so stunned at Fed Chief Ben Bernanke’s admission that
commodity inflation might accelerate over the next few months before the
Fed is forced to act on interest rates, they missed the part where the
Fed lowered its 2011
GDP
growth estimates from a range between 3.4% — 3.9%
to 3.1%.

For anyone pinning his or her hopes on 3.9%,
that’s got to be disappointing.

But after yesterday’s first read of Q1 2011
GDP growth — a
measly 1.8% — investors are likely to take another look at the total
message delivered by the Fed.

What Obama’s Budget Speech Means for Your Retirement

In a speech at George Washington University today, President Obama outlined
his proposal to cut the federal deficit by $4 trillion in the next 12
years.

And with $65 trillion in current unfunded liabilities for Medicare,
Medicaid and Social Security, it should be no surprise that cuts to these
programs are in the works.

Medicare and Medicaid spending alone amount to $12,000 a year per recipient
right now. At the current rate, that amount will balloon to $44,000 a year
by 2040.

Indeed, according to a study done by Mary Meeker from Kleiner Perkins
Caulfield & Byers, the Congressional Budget Office reports that if
nothing is done about entitlement and debt, “…entitlement and net
interest payments combined will equal all federal revenue by 2025, just 14
years from now.”