I know I've written about rates and bonds seemingly every week, but it's been necessary. Last week, the 10-year yield finally broke above 5%, an event I've anticipated for years, rising nearly 19 basis points to close at 5.18%. With that move, the 10-year rate is back to normal — right around the 40-year average. The low-rate regime that prevailed [...]
Come writers and critics Who prophesize with your pen And keep your eyes wide The chance won't come again And don't speak too soon For the wheel's still in spin And there's no tellin' who That it's namin' For the loser now Will be later to win For the times they are a-changin' - Bob Dylan, The Times They Are [...]
Whenever people say, 'Oh, well, the Treasury Secretary is taking a risk,' well, it's my dream. I have asymmetric information. I am the house now. So when we intervene with the Japanese yen, I have pretty good insight into what the Japanese, what the Bank of Japan is going to do, what Japanese policymakers are going to do. You can [...]
It is impossible to escape the negativity toward bonds these days. And with good reason, I suppose, since the returns from the asset class have been lousy for some time. The 7-10 year Treasury index is down 1.42% this year, which doesn't sound like much, but being down on the safest asset in your portfolio is a bit jarring. It [...]
As I learned years ago, you can take two different kinds of hikes on the trails around Jackson Hole. I can sum up my hikes with former Vice Chairman Don Kohn in two words: I survived. These steely marathon death marches revealed a side of Don I wasn't ready for. There's another kind of hike—one I associate with Chairman Ben [...]
Questions, questions, questions. Investors always have lots of questions, most of them about the future, which makes them very hard impossible to answer. That doesn't mean the questions aren't worth asking though, which is why I do this every few months. Thinking about what we don't know can prepare us for the future no matter how it turns out. And [...]
Faced with a choice between changing one's mind and proving there is no need to do so, almost everyone gets busy with the proof. J.K. Galbraith I've learned so much from my mistakes, I'm thinking of making a few more. Anonymous I was prepared to dislike our new Fed Chairman, Kevin Warsh. His past track record at the Fed stood [...]
Economic Stability One of the remarkable things about the US economy is how stable it has been over the last 4 years. I know it doesn't feel that way sometimes - most of the time? - but from an aggregate viewpoint, that is the reality. We can see this stability in a variety of economic reports as well as in [...]
In Congress, July 4, 1776 The unanimous Declaration of the thirteen united States of America, When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of [...]
“You pay a very high price in the stock market for a cheery consensus.” — Warren Buffett The inflation figures released last week were not particularly good. Consumer prices rose 0.6% in April and the year-over-year change is now 3.8%. The core numbers were better at 0.4% for the month and 2.8% year-over-year, but those were still higher than expected. [...]
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