There are replies you may not give.
I mentioned in my email to you yesterday that this series will start with a bang, and the following fact certainly hit me like a ton of bricks: Anyone who started investing after has never experienced a bear market in Treasuries.
St Louis Fed The secular decline in bond yields is one of the most definable trends in financial markets, and also one of the most important. As you know, US Treasury yields are the bellwether for global interest rates.
Almost every market and asset class in the world is affected by them. At every opportunity, I like to point out that interest rates are the cost of money. The repayments were no fun, but I was one of the lucky ones who could actually afford to borrow money at that time.
Those rates created an insurmountable hurdle for most entrepreneurs, and banks were not willing to lend like they are today.
In the 36 years since then, the cost of money has fallen sharply—and demand for it has skyrocketed. Corporations have borrowed huge amounts of debt to fund stock buybacks and increases in their dividends.
Jeffrey has had an ultra-successful investment career and has been spot-on with market timing, especially in He has called the direction of Treasuries and the US dollar, to almost the exact tick. The below chart from a recent presentation Jeffrey gave shows this. DoubleLine Funds By this measure, the global economy is in a synchronized upswing for the first time in a decade—and the short-term outlook is positive.
Leading economic indicators in all major regions are flashing green. This is good news for everything, except bond prices. Higher economic growth means more demand for credit, which drives up its cost. In this case, the cost is interest rates.
This relationship between economic growth and interest rates is why, over time, bond yields track nominal GDP growth. The below chart from the recent presentation by Jeffrey shows that when the 7-year moving average of nominal GDP growth is higher than the US year Treasury yield, yields should rise.
The current setup suggests that bond yields should now be rising. DoubleLine Funds I have my doubts about the sustainability of growth in the US because of the rising debt burden and anemic growth in productivity and the working age population. With these headwinds, I believe it will be almost impossible to achieve sustained growth, like what we experienced in the s.
However, I concede that growth could continue to rise over the next 2—3 years. An arch enemy returns to the fray In his December webcast, Jeffrey gave his thoughts on the current inflation numbers: If [inflation] continues to rise, the Fed would have ample reason to follow through on its indicated three rate hikes in Despite the best efforts of central banks, inflation has remained largely absent from the US and other advanced economies over the past decade.
Inflation, as measured by the CPI, is on track for its highest annual growth rate since It is also at multi-year highs in Europe, the UK, and Japan.To arrive at the edge of the world's knowledge, seek out the most complex and sophisticated minds, put them in a room together, and have them ask each other the questions they are asking themselves.
You might have noticed a lot of recent complaints about what’s known as “page view journalism.” Thanks to the way online advertising works, many online publishers push out tons of daily content, most of it filler.
Good morning. I'm Charlie Stross, and it's my job to tell lies for money. Or rather, I write science fiction, much of it about our near future, which has in recent years become ridiculously hard to predict. Balancing Your Checkbook: When you write a check, you have to make sure that you have enough money in your checking account.
To do that, you balance your checkbook every time you write a check. Corey Robin mentioned sexual harassment to invoke an indefensible idea that turned out to have defenders; I fear this essay does the same. The BHLs are conflicted about far simpler questions like “can you contract yourself into slavery?”, so the answer to “what manner of rights do they believe are inalienable by contract?” is “very, very close to nothing”.
by John Mauldin. Thank you for visiting the homepage of this five-part series on the individuals and ideas shaping my worldview.
I have gained a lot of knowledge from these truly great minds, and the purpose of this series is to share what I have learned with you, my readers.