Zerohedge grabbed my attention, “Terrible 2Y Auction: Biggest Tail in 3 years, Dealers Highest Since 2022”: “We were wondering how long before the lack of disposable cash hits US debt. We got the answer today…when we got the results of today’s $69 billion 2Year bond auction. In a nutshell, it was terrible. The auction priced at a high yield of […]
» Read moreIn a recent interview with Chuck Butler, we discussed the US Financial Cycle using Ray Dalio’s chart in “The Changing World Order”. Ray points to the downside of the empire: Large Debts Printing Money Internal Conflict Loss of Reserve Currency Weak Leadership Civil War/revolution While our discussion focused on “Loss of Reserve Currency”, it’s part of a much bigger picture. […]
» Read moreGood friend and bond expert, Chuck Butler recently mentioned: “And someone somewhere, somehow is buying the 10-year Treasury, and the yield on the bond is slipping again, with it trading with 3.73% yield this morning.” MSNBC provides a graph of yields leading up to Thanksgiving week: Yields were at a high of around 4.2% and closed out the week at […]
» Read moreWhen the Fed bailed out the banks in 2008, interest rates dropped to historic lows. Many retirees were heavily invested in CDs and quality bonds earning a safe 6% interest, paying their bills, and enjoying their golden years. Overnight, trillions in CDs and bonds were called in, savers lost a major portion of their anticipated income as interest rates dropped […]
» Read moreSubscriber Steve F. issued a challenge: “If the Fed pays lip service to inflation as Chuck suggested, inflation will continue to destroy the economy along with much of the wealth of the nation. Can you and Chuck focus on ‘destroy much of the wealth of the nation?’ That seems like a subject the average Joe can get his or her […]
» Read moreAs the world awaited the new bailout bill, CNBC reported, “10-year Treasury yield hits highest level in a year”. “The yield on the benchmark 10-year Treasury note climbed to 1.29% at around 4:15 p.m. ET, breaking above the 1.28% level for the first time since February 2020. Meanwhile, the yield on the 30-year Treasury bond rose to 2.08%. …. The […]
» Read moreI was sitting in the exam room and the doctor walked in. Knowing I write this blog, he said, “Finally someone I can talk to. What the heck is going on?” With our current economic situation, the market tanking and the Coronavirus monopolizing the amped up media, a lot of concerned subscribers are asking that question. When you combine financial […]
» Read moreThe bond market is absolutely nuts – devoid of any common sense. Back in the days when professors used chalkboards, and actually taught classes, I studied Business Economics. We learned how capital and labor come together to produce goods and services, create jobs and profits. If capital was needed, you could borrow and pay interest. Interest is the rent you […]
» Read moreRealizing you are wrong about a basic belief is tough. The last two weeks we discussed “The Bond Fund Risks Your Broker Won’t Tell You” and “Closed-End Bond Funds, Friend or Foe?” We concluded holding top-rated bonds is OK – individually, not in a publicly traded fund. Fund managers, chasing high returns, take risks I’m not comfortable with. If bonds […]
» Read moreHistorically, funds holding investment-grade bonds have been considered a safe investment. Lending money to hundreds of well-known companies had little chance of major default and provided interest income. Has your broker mentioned new risks emerging? Bonds ratings fall into two major groups, investment grade and high yield (called junk bonds). The bond rating generally determines the interest rate borrowers have […]
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