Blog Archives

Will The Fed Slash Interest Rates? When the Levee Breaks

Interest Rates cut 2019

As the following headline shows, interest rates fell quite sharply on Friday to current cycle lows in the wake of a very weak non-farm employment report.

10-year Treasury yield plunges

One can see how inverted the 10-year Treasury note yield has become versus the 3-month T-bill yield in the following chart.

Read more ›



German Negativity

German Yield

Mohamed El-Erian, the former CEO of PIMCO, said recently on CNBC that if you want to know what’s going to happen to U.S. long-term interest rates, then all you have to do is look to Germany. And so that is what I did.

Read more ›



Federal Reserve Response to the Market’s Beseeching - Power of Structural Forces

Federal Reserve

It’s been a very busy three weeks of travel so I’m going to keep this one pretty short and sweet. And while I often write a thousand words or more, this post will hopefully support the adage that “a picture is worth a thousand words.”

The Federal Reserve finally responded to the market’s beseeching that it pauses its rate increases and not be on a “damn the torpedoes” path of raising interest rates and shrinking the balance sheet.

Read more ›



From Interest Rates to Insights - Feel to Heal

Interest Rates Gary Carmell

The fact that I’m not going to spend much time on this chart must mean that I still feel the need to release things deep within my subconscious with regard to the loss of Roneet.

10-year-treasury-Constant-Maturity-Rate Interest Rates

While rates were rising I wrote a few times that I was perplexed that they were doing so given the headwinds of tariffs and increasing tension with China,

Read more ›



What 'The Eleven' Has to Do With Interest Rates?

The Eleven

The Grateful Dead have a song called The Eleven. In many ways the lyrics are unintelligible. It was written during their psychedelic phase so the lack of comprehension makes some sense as their senses were non-sensical.

Read more ›



What Were Trump Voters Really Looking For?

Trump Voters

With the midterm elections kicking into high gear and political rhetoric heating up and true believers huddling in their echo chambers and cocoons, I thought it would be interesting to look at some research carried out with regard to the 2016 presidential election and some of the surprising findings.

Read more ›



What You See Is What You Get? LIBOR & The Flat Yield Curve

Under most economic environments longer-term debt instruments yield more than shorter ones. This is the case in order to compensate investors for risks related to purchasing power eroding and more uncertainty and volatility that can increase the probability of default (outside Treasuries). In addition, our banking system is based on banks accessing short-term deposits and being able to make longer-term loans and investments which necessitates longer rates being higher than shorter ones so banks can be profitable.

Read more ›



Bond Market Skepticism & Emerging Market Carnage

I couldn’t stay away from interest rates for too long. Last week was very fascinating. There was a lot of news that should have been quite bearish for long-term bonds but instead, yields moved down by about 5 basis points for the week for the 10-year Treasury note.

Read more ›



Quantum Phases & Locking Rate

Quantum Phases

The last few weeks have been a good representation as to why I have an aversion to fixed-rate loans when doing a refinance or an acquisition. Assuming fixed rate loans from sellers when acquiring properties, however, is a different story and worthy of its own write up so I won’t address the distinctions here.

Read more ›



10-year Treasury Note & Argentina's 40% Interest Rate - An Interesting Week

10-year Treasury note

What a difference one week makes. Last week I was concerned that the 10-year Treasury note yield had breached its previous cycle peak. I used some questionable, but fancy statistical analysis to justify that the peak I should really be worried about was 3.16% versus the previous cycle peak of 3.04%.

Read more ›



Categories

Free Insights