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Jerome Powell and the Fed gave everyone a holiday gift as expected this week by keeping interest rates right where they were. After three defensive rate drops in 2019, and with unemployment low and earnings better than expected, it could be a green Christmas season for investors. Can the longest running bull market in history keep the conga line going in 2020?

Now with the election less than a year away, the rhetoric around the huge wealth spread between the super-rich and everyone else is heating up. On CBS’ 60 Minutes last night, Jamie Dimon, CEO of JPMorgan, was taken to task for making $31 million last year and asked whether he should give some back, for the good of the bank or the country or something. It makes you scratch your head given the fact that Dimon is responsible for a company that is worth over $400 billion, employs over 250,000 people around the world, made over $30 billion over each of the past two years, and paid over $7 billion in taxes in each of those two years. You scratch your head a little harder when you realize that two pitchers from the Washington Nationals made more than Dimon, Taylor Swift made $185 million last year, LeBron James makes about $35 million for playing hoops, and CBS’ own former CEO, Les Moonves, made $69 million in 2017. This issue is way more complicated than having rich CEO’s sprinkle money on it.

According to a recent Wall Street Journal article, people talking on their cell phones is a thing of the past. In fact, during the spring of 2019, a survey indicated that only 45% of people used their phones to make a voice call over the previous week. Think of that, less than half of cell phone users were using their phones to speak with each other. Now compare that with the incredible recent market action of Apple, which has risen over 50% this year, and is now well over a trillion dollars in valuation, and just got an upgrade to possibly go up another 30%. Apple has become the most valuable company in the world in large part because of the iPhone. For investors, huge success sometimes comes from the less obvious paths that great companies take to satisfy the need of their clients.

The year 2019 may go down as the year of zero for our nation’s capital, Washington, DC. It begins (and ends in his mind) with our President, as he continues to bait and bash the Fed chairman about getting interest rates down closer to zero. He is certainly not the first president to want low rates but definitely is the most outspoken. Speaking of outspoken, as the opposition begins to mount their presidential challenge in 2020, the talk is again zero, zero cost tuition, zero cost healthcare for all, and zero gas emissions. Not to be outdone, the hometown Redskins, jumping on the bandwagon, have a legitimate chance to have zero wins by the end of the year. Alas, Wall Street cannot miss a party and late last week the large discount firms embraced zero commissions. The Skin’s can’t go less than zero, can they?

Today we are going to talk about negative interest rates. In Japan, Germany, and France, to name the three big ones, interest rates are negative, which means their central bank will charge you for the privilege to hold and use your money. Currently, there is approximately $17 Trillion (with a T) invested in negative interest fixed income. So, you give me $1000 today and I agree to give you your money back in ten years, less about $5 per year as a cost to the investor. Amazingly, and for now, investing in ultra-low or even negative bonds has worked. If you buy a bond with negative rates, you just need it to go a bit further in the red…If this is a hard concept to get your arms around, you are not alone, because it has never acted to this extent in economic history. The talk is all about inverted yield curves and trade wars, but the huge, worldwide bond market is ground zero, and the race is on. Or should we say ground “less than” zero.