Why Interest Rates Are Falling

#*!? CRASH BAM @#$ Suddenly, markets (well, at least the bond market) now see falling interest rates in the short and intermediate term. The 10-Year U.S. T-Note fell from 1.47% on June 30 to close at 1.29% on Thursday July 7 (a big move in just four market sessions). Some of the rapid fall was due to […]

The Rate Spike Will Damage the Recovery

Fed Intervention Needed There was quite a spike in interest rates the last week of February with the 10-Year T-Note spiking from a 1.36% level as of the close on Wednesday to as high as 1.60% intraday with a close of 1.55% on Thursday.  Friday’s close was 1.45%.  But, a lot of damage was done. […]

Bubble Markets Display Bizarre Behavior

Right Before They Tumble Like the Dot.Com bubble of the late ‘90s, the typical signs of an approaching bubble bust were on full display in the equity markets last week (week ending January 29th).   GameStop (GME) and other failing or troubled companies (AMC, Blackberry, Nokia, Bed Bath) have become the darlings of the WallStreetBets (WSB) […]

In A Changing World, The Old Economics May No Longer Apply

One must be careful in interpreting data. The world has changed, and it impacts how people behave and ultimately the resulting data. The recent Retail Sales data is a case in point. It cannot be interpreted with a pre-virus backdrop. It’s rise in September 2020 doesn’t mean the same as a similar rise would have meant in September 2019.  […]

The Real Recession Is Just Starting

At month’s end, we are going to see the BLS announce a 30%+ bounce in real GDP (the Atlanta Fed’s forecast is now above 35%). Much of this is already priced into the equity market, so a positive or negative reaction will only occur if the reported number is significantly above or below the consensus view. In […]

The Recovery Stalls; Fed Pledges “Lower for Longer;” Equity Markets Pause

With the Fed pledging to keep rates low even when (or if) inflation rises above its 2% target, it is hard to see why long-term Treasury yields (and those of other quality issuers) won’t move toward yields of similar debt in the world’s other industrial economies (i.e., Europe and Japan). The economic lull is now […]