Wild week. And it is not over.
Two things I am watching.

Source: Fred

Source: CEFConnect.com
Wild week. And it is not over.
Two things I am watching.
Source: Fred
Source: CEFConnect.com
Wow. Stunning collapse in short duration yields.
Source: Marketwatch.com
Over 100 bps on the two year.
And what is even more interesting to me is the gap between the current Fed Funds target rate and these rates:
Source: Bloomberg.com
Seems like that is going to need to resolve itself somehow, at some point.
Despite the Fed raising interest rates, credit conditions were actually relaxing on some levels in the back half of 2022.
“Financial conditions have loosened significantly in recent months and, by some measures, are around levels that prevailed last March when the Fed initiated this hiking cycle.” – Why the Federal Reserve Should Raise Rates by Half a Percent
Equities were rallying through this period, unsurprisingly. So, were digital bit apes and other assorted things.
However, there appears to be evidence that credit conditions are now heading the other way:
We have had a 15 year bull market with low interest rates and lots of liquidity. In other words, “Disneyland.”
My sense is most market participants are going to be slow to change how they learned to behave during the bull market cycle, until they are forced to do so.
Yes, that was a bear market rally.
Next question.
Readers,
Financial modeling and excel are skills that I am good at. I am not sure if that is a good or bad thing.
And at times, I have posted some templates and workbooks that I find useful or use a lot. Hopefully, they will save you a bit of time.
Here is a current listing:
These are all downloadable on Gumroad at no cost.
Drop a note in the comments if there is something excel that you would like to see. No promises.
Remember, you get what you pay for…
Not saying that you should, but let’s assume that you might want to track maturity schedules as you termed out some cash – because rates on Treasury bills and notes are increasing much faster than bank rates.
You could use a little tracker like this.
At no cost. Enjoy.
This is not investment advice. This is just information that anyone who has any savings in high yield savings or money market accounts should know.
The most recent Treasury Bill auction results:
And Notes:
Look at that rate on the 26 week bill. And the 2 Year Note cracking 3%.
Marcus, you and your peers better up your game a bit.
Again, this is most definitely not investment advice.
I see a chart like this, and the value hunter in me, cannot help but see an opportunity. This fund is plumbing its all time lows.
But then I look at a chart like this, and think, well maybe all time lows when the history is only from 2010 forward, is irrelevant (maybe even dangerous) given the macro squishing that could happen if large flows / rate trends reverse (i.e. return to more normal levels).
The vast majority of interest rate history is above, not below, where we are today.
Source: Visual Capitalist
Ok, what am I missing?
The seller wants to sell me house that will cost almost $10,000 per month, and wants to rent it back for $5,000 per month.
I presume that if I do enough of these, I will make it up in volume?
Mmmmmm huhhhhh….
We Might Be Seeing the Other Side of the ‘Bullwhip Effect’
Reference: Dislocations