Blog Archives

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.

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One Mis-Step Away – Answers Come After the Question is Posed

Question

Answers can only come after a question has been posed. Thus, formulating great questions is the first, and most important, step to growing one’s base of knowledge. As I have written in my book, the two most important questions I need the answers to in terms of our investments at CWS are:

What is going to happen to our Net Operating Income?

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A Return to Charts – Focusing on Interest Rates and the Economy

charts

It’s been a while since I have focused on the economy and interest rates so I will return to one of my periodic chart-o-ramas to try to capture some of the dramatic changes taking place in various markets and how investors have gone from embracing risk to shying away from it,

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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,

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China and a New Cold War – Prioritizing National Security over Business and Investors

China Cold War

In some ways, I can understand investors looking through the threat of tariffs on multiple fronts by President Trump as just his standard negotiating tactic to strike a better deal. Despite very derogatory statements directed towards our strong allies and trading partners of Canada,

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T.R., Dana Delany, and the Power of a Platform

Dana Delany Teddy Roosevelt

Kudos to Heidi Garland who handles my social media. She is quite in her postings on my behalf on Facebook, Twitter, and LinkedIn. I never know what interesting tidbit she might be posting. Of all the platforms, Twitter is the most ephemeral as tweets are sent and they tend to have a short shelf life to them.

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Built To Last – Finite vs. Infinite Games

Finite and Infinite Games

I had the pleasure of seeing Crazy Rich Asians last week. It was quite enjoyable and I very much recommend it. There is a scene in the movie that represents the clash of values between generations and cultures (Chinese and Chinese American) in which the matriarch criticizes her son’s Chinese American girlfriend for being fixated on the American obsession of happiness and wanting to be happy.

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How to Unify Countries – The Power of Sports

Unify Gary with Tribal Leader

With the World Cup having been completed this past weekend I thought I would tap into some interesting research about soccer and its ability to unify countries that are typically very tribal and fractious. I saw some of this firsthand during my recent trip to Africa where it was pretty evident that tribalism is very much alive and well.

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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.

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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.

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