One of my earliest musical memories is listening to the song “The Sound of Silence” by Simon & Garfunkel playing on a reel-to-reel tape recorder that my father had brought home when I was very young. I am sure that I had heard music before— on the radio at a minimum—but I remember being very struck by the beauty of the song, particularly the harmony of the voices, in a way that I had never been before. I actually trace my interest in music to that particular song and that particular moment.

I was remembering this in the context of a quiet week in Maine, where I have had the chance to do quite a bit of hiking in fairly unfrequented areas. The area around my cottage has also been quite empty during the week, so I have had a chance to listen to considerably more silence than is normally the case. Silence very definitely has a sound of its own, and, as much as I love Jackson, quiet he is not.

With the S&P 500 down almost 5 percent from its peak, and a drop yesterday, I am starting to hear from investors who are asking, “What is going on? Do I need to worry?” The short answer is, it depends on your portfolio and your time frame.

I have written extensively about how the market is either somewhat or very richly valued, based on historical standards, and how most of the appreciation this year has come from investors paying more for a given stream of earnings, rather than from an increase in the earnings themselves.

In what I really hope is an apocryphal story, it is said that frogs don’t notice small temperature changes. You can, therefore, put a frog in a pan filled with cold water, and, as long as you heat it very slowly, you can actually boil the frog without it jumping out. If you keep the temperature changes slow enough, it will never realize that the heat is rising to harmful, and then fatal, levels.

I have, obviously, never tried this, but something similar has been happening in the U.S. economy. I am pleased to find, however, that people appear to be somewhat smarter than frogs. The heat I’m referring to is the pending debt ceiling crisis.

I haven’t written much about education recently, but now that school is starting back up, it’s time to take another look. My oldest nephew, Jake, is entering college this week here in Boston, which adds a certain amount of immediacy to the discussion.

When I compare the experience Jake will have with what my five-year-old son, Jackson, might have years from now, I expect there will be significant differences. First, Jake will be starting at an established university, with a physical campus, and take most or all of his classes sitting in a lecture hall—just as his parents and I did. For Jackson, I doubt very much that will be the case.

I will be taking some time off next week. I will still be blogging every morning, but I plan to spend the rest of each day doing some resting and recreating. There are a number of issues I want to think more deeply about before reengaging, and this will give me a chance to do some long-deferred reading and thinking.

I had the chance yesterday to be a guest on the Bloomberg Radio program Taking Stock, which was an awful lot of fun. The hosts, Pimm Fox and Carol Massar, are both smart and well informed, and the other guest, Kevin Divney, had some very interesting views and was a pleasure to bounce ideas off of.

Over the past week or so, I’ve had the chance to sit down with several groups to discuss how the economy and the financial markets are evolving. Each time, I’ve laid out many of the arguments, along with supporting data, that I’ve made here on the blog. Briefly, the real economy is improving, and growth can reasonably be expected to accelerate for the rest of the year; interest rates are going to remain volatile and increase over time, although they may drop back a bit in the short term; and stock markets are overvalued and risky.

But what if I’m wrong?

I’m meeting with the investment committee of one of our advisor groups this morning, and, in preparation, they sent me a list of very good questions they want to discuss. We’re also planning to start an “Ask Brad” section of the blog to address common questions. With both of these pending, and a couple of questions on everyone’s mind right now, I thought I’d start out with the big one, which is, of course, What are interest rates going to do?

Interest rates have moved higher again over the past week. What is driving the current spike in rates, as I’ve written before, is price discovery. As the Fed moves closer and closer to tapering away its bond buying, the market will increasingly be driven by supply and demand factors. In recent weeks, foreigners have been selling bonds, as have domestic banks. When and if the Fed starts to taper, demand will decrease even as supply is likely to continue to increase from the increased selling. When demand goes down and supply goes up, prices drop. In the case of bonds, this means yields go up.

August has been tough for the stock market. We’re now down a bit over 3 percent, even as interest rates continue to tick up. Based on the last time tapering hit the markets, we may have more downside risk ahead.

As more or less promised yesterday, let’s talk about the market. Yesterday, we saw two interrelated events: interest rates ticked up again, and the stock market declined. Why? Will it continue?

First, we’ll look at the rise in interest rates. I use rates on the 10-year Treasury bond as a proxy for rates as a whole, as many other financial instruments use the 10-year Treasury as a basis off which to price. This is common in the market.