The S&P 500 and Dow Jones Industrial stock averages made new all-time highs last week as bonds sold off, the 10-year Treasury note yield briefly breaking above 1.7% before a pretty good-sized rally Friday brought the yield back to 1.65%. And thus we're right back where we were at the end of March when the 10-year yield hit its high [...]
Many, likely the vast majority believe that the recent wave of consumer price increases is going to stick around. It’s already painful and even if it isn’t inflation, they’re thinking, it soon will be. Maybe not 1970’s bad, not yet, at the very least something like then.The bond market doesn’t just disagree, it keeps doing so vehemently. Nothing new, bond [...]
You don’t have to take my word for it. QE doesn’t work and it never has. That’s not just my assessment, pull out any chart of interest rates for wherever gets the misfortune of having been wasted with one of these LSAP’s. If none handy, then just read what officials and central bankers write about their own programs (or those [...]
It was one of those signals which mattered more than the seemingly trivial details surrounding the affair. The name MF Global doesn’t mean very much these days, but for a time in late 2011 it came to represent outright fear. Some were even declaring it the next “Lehman.” While the “bank” did eventually fail, and the implications of it came [...]
We’ve got one central bank over here in America which appears as if its members can’t wait to “taper”, bringing up both the topic and using that particular word as much as possible. Jay Powell’s Federal Reserve obviously intends to buoy confidence by projecting as much when it does cut back on the pace of its (irrelevant) QE6. On the [...]
If you're fortunate to be able to do this long enough, you’re absolutely assured to get caught with your pants down and almost certainly more than once. In the short run, it’s all a crapshoot anyway. Markets fluctuate and never, ever go in a straight line. And just when you claim to be right on top, they yank the rug [...]
A fascinating and useful bit of economic research was put forward just last month by Britain’s House of Lords (and thanks to Greg for digging it up). That body’s Economic Affairs Committee heard detailed testimony on the subject of Quantitative Easing, commonly known as QE. From the title of the report prepared in advance of the witnesses presenting their opinions [...]
Jerome Powell delivered his long-anticipated speech at Jackson Hole last week. Well actually, I have no idea if he was actually in Jackson Hole since the speech was delivered electronically, another victim of the delta variant. The virus itself rated barely a mention in Mr. Powell's remarks and I think that is probably as it should be. There has been [...]
Money printing. Overheating. Going from an economy stuck in the mud to one rocketing ahead seemingly in the blink of an eye. Careless government officials steadfastly forecasting Goldilocks, surely whistling past the consumer price graveyard of stagflation misery.Long believed dead, that seventies Inflation Monster relit maybe by necessity but now on the loose lurking just beneath the surface, ready to [...]
Remember "The New Normal"? Back in 2009, Bill Gross, the old bond king before Gundlach came along, penned a market commentary called "On the Course to a New Normal" which he said would be: "a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; [...]
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