April 15th was the two-week anniversary of the day my wife and I got our second Moderna shot. We have spent the last 13 months being very careful about the virus, limiting our contacts, social distancing, and generally doing anything that seemed helpful. I am certainly aware that others took a more liberal attitude as is their right. But, for [...]
The Australians are doing quite well, at least according to more recent data. A few hiccups hear and there, the economy Down Under has been riding high(er) on the Chinese rebound and the potential end to the pandemic. Earlier today, National Australia Bank’s survey of the first quarter business environment was thoroughly positive. At an index value of +17, this [...]
One of the most common complaints I hear about the markets is that they are "divorced from reality", that they aren't acting as the current economic data would seem to dictate. I've been in this business for 30 years and I think I first heard that in year one. Or maybe even before I decided to lose my mind and [...]
Given the historic data for US retail sales, “somehow” the bond market ignored them yesterday (and today). Yields globally fell for the most part, with real yields (TIPS) really discounting the significance of consumers in March. Bonds aren’t buying that this is anything other than temporary.Not surprisingly, the mainstream media refuses not to buy what bonds aren’t. I mean, for [...]
If there is one thing Economists understand very well, it’s mathematics. This is practically all they do, and all that means much to their discipline. If there’s one thing Economists don’t seem either competent with or interested in, it’s the economy. The math is supposed to match the other’s reality, yet rarely does.There are times, however, when simple calculation is [...]
The benchmark 10-year US Treasury has obtained some bids. Not long ago the certain harbinger of bond rout doom, the long end maybe has joined the rest of the world in its global pause if somewhat later than it had begun elsewhere (including, importantly, its own TIPS real yield backyard). Even nearer-in inflation expectations have rounded off at their current [...]
The SLR exemption is ending! The SLR exemption is ending! Doesn't exactly roll off the tongue, does it? There has been rampant speculation the last few weeks about the fate of the exemption the Fed provided banks a year ago with regard to the Supplemental Leverage Ratio that allowed them to ignore Treasuries and reserves. The banks themselves warned that [...]
Markets continue to move based on the expectation of a post-virus boom. At least that is the dominant narrative right now. The economy, boosted by another round of stimulus, will surge once the virus is under control and things return to normal. President Biden last week offered his version of optimism by saying that families would be able to gather [...]
I've been getting that question a lot these days. How high can rates go? It is asked in a way that seems to imply that the answer is obvious - not much. Why? The answer is almost always the same; the Fed can't and won't let rates go up. If they did, it would kill the economy and raise the [...]
I was told many years ago when I started in this business that it wasn't my job to predict the future. Our job as investors is to properly and accurately interpret the present. I was also told that wasn't as easy as it sounded and the current consensus about the state of the world was probably, almost certainly, almost always, [...]
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