The last 2 months have been tough for fixed income investors - especially levered ones. QE front runners, who followed our beloved colonel down the road to recovery by holding excess Agency MBS and long term USTs, were just given the "PFC Santiago" treatment. It was a...
First of all, hats off to Paul Krugman. Anyone who can successfully weave "The Chewbacca Defense" from South Park episode 27 into a macroeconomic commentary is certainly worthy of the title Nobel Laureate. Bravo Paul, your recent missive -...
QE is working VERY well. Jobs are being generated; consumer and business sentiment are back above pre-crisis levels; home prices are rising at double digit annualized rates; and risk-asset prices are at record highs. Much to the dismay of the haters and the doomers,...
Back in the early ‘70s, as the oil price shock began to hit hard, speed limits in the US were cut to 55mph. The government, in an attempt to limit fuel consumption, came up with fancy slogans like "Fifty is Thrifty" and "Speed Kills" in order to justify the lower...
We have been happily living on QE transfusions for the better part of 4 years. These pain killers have made the healing from our crisis not just tolerable, but actually quite enjoyable (at least for those that sipped the cocktail). That said, the drink has many side...
Non-traditional monetary policy is working across developed markets to heal the wounds incurred during our global financial crisis. Risk free real rates have been driven aggressively lower, and the portfolio balance channel has forced investors out of less productive...
Days like Thursday are simply beautiful: Blues +15 Spoos +25 Gold -17 It had been one heck of a pull back in our long time favorite trade - spoos and blues. So a healthy 3 percent upmove, which brought us back to +12% YTD, felt like a major victory after some...
A number of folks are opining on how higher long term interest rates will choke off the US recovery. The thinking goes along standard partial equilibrium lines as follows - higher mortgage rates crush the housing recovery, higher government bond yields create bigger...
If someone asked me to put together a fake jobs report that would be the most soothing to a frazzled market, it would have read pretty much as just released. The tick up in the u-rate, on a slightly higher participation rate, was a work of art. It moves us further...
Many folks are asking, "Why did 10-year yields rise over 50 bps in just a few weeks?" The typical list of answers runs something like this: hawkish Fed tapering comments, stronger economic data, JGB and Nikkei volatility, MBS weakness/hedging, and the always helpful...
Many folks are asking, "Why did 10-year yields rise over 50 bps in just a few weeks?" The typical list of answers runs something like this: hawkish Fed tapering comments, stronger economic data, JGB and Nikkei volatility, MBS weakness/hedging, and the always helpful "more sellers than buyers." While there surely has been some more notable […]
