Why do people consider it a loss, when you can just hold the bond till maturity and get full value? Wouldn't the correct wording be that people are losing out on opportunity cost. A bond HTM loses nothing.
@shyamvasudevan4792 that is kind of my point. Because the market is so levered/rehypothicated if it's not always # go up, Houston has problems....I pray we get a deep deep recession.
Kyla, you look jacked as always. Does anybody have a link that explains the logistics of tax deadline deferment? Are all federal taxes from Californians withheld until this mid November deadline? Just the ones that haven't filed? Any estimates floating around on how much that might be?
Kyla I’m a huge fan of your work - would love your thoughts on the following: Is it possible that we’re seeing this term premium / the long end of the curve rising because of supply / demand factors; specifically among financial institutions? Do financial institutions have the stomach to be long duration? Some things to consider: 1) Are the concerns over banking solvency/liquidity due to the bank failures earlier this year causing banks to limit their exposure to treasuries? Maybe some are selling to meet capital/compliance requirements, especially commercial banks dealing with lower deposits. 2) Plenty of pensions in the country are underfunded and boomers are beginning to retire. Can these pensions afford to be long duration or still remain 60/40 while searching for higher yield? 3) Although we’ve seen inflation come down, is the Fed concerned any sort of QE will see a return to the high inflation we experienced last year? I find that a lot of people are focused on the Fed’s action with respect to cutting/leaving/raising rates but QE/QT has a huge influence on the long-end of the curve in my opinion. Look forward to hearing your perspective on all of this.
The deficit is out of control, its a period of time when the economy is running very well, interest rates are high and government should cut spending to assist the FED in reducing inflation. If you think $2T deficit is high wait until the next slowdown and governments have to ramp up spending from this already elevated level. This is why bond prices are crashing.
Do you think there is any chance housing and owners equivalent rent could surprise down and cause a very very low inflation number one month which might bring the fed to cut to maybe 4% fed rate or lower since almost half the hedline number is based on the goody OER number?
Given we’re looking at a second GWOT, I’d expect the growth rate of US debt to spike. If we’re adding $140bn/mo now, imagine what it’ll be in a shooting war. Should that happen, I’d think the fed will cut rates, inflation be damned.
YA I DOn't believe in lending friends money, i believe giving gifts and don't expect return. if you lend, usually friendship can easily end when someone doesn't pay up
Here’s the best advice is to Never loan money to anyone watch you will be chasing them for your money back past the deadline plus no more relationship with those person/s anymore and those borrowers know they won’t payback at the end of the day and cares less about you at all. Thank me later.
Don’t ever loan money to friends in real need. Gift them the help they need and it will return far more than a dollar amount. Prerequisite: good judgment choosing these friends.
$$$$$ commercial property loans are due to adjust in the next 4 years. If the fed does not start reducing the interest rate soon, sovereign funds are going to scoop up commercial properties and worse, belly up lenders who are holding the notes. Ain't gonna be pretty.
The TLT is at a 23 year low right now. Recession red flags are everywhere. If you're smart you've got your money in a HYSA. Yes it doesn't yield as much as a bond or CD but at least it's relatively liquid. There's just too much risk in both stocks and bonds right now.
If we cut rates anytime soon inflation will come roaring back. Ask any normal person what it cost to live today vs. 2,3,4 years ago. Everything has doubled and it's not slowing down. We have to hold rates.
in Portugal the government cut sales tax and introduced price caps on certain goods. Seems to be working fine. Raising rates in just punishing poor people even more and has a negligible effect on prices imo.
thanks for watching everyone
Why do people consider it a loss, when you can just hold the bond till maturity and get full value? Wouldn't the correct wording be that people are losing out on opportunity cost. A bond HTM loses nothing.
indeed, maturity is not oft discussed for some reason! @@taylormichael2313
There aren’t many investors out there who can htm a bond without concern for return or matching liabilities…
@shyamvasudevan4792 that is kind of my point. Because the market is so levered/rehypothicated if it's not always # go up, Houston has problems....I pray we get a deep deep recession.
Thank you :)
another banger from the best in the biz
Thanks Kyla. That looks like a lot of number crunching to process.
Kyla, you look jacked as always.
Does anybody have a link that explains the logistics of tax deadline deferment? Are all federal taxes from Californians withheld until this mid November deadline? Just the ones that haven't filed? Any estimates floating around on how much that might be?
Kyla I’m a huge fan of your work - would love your thoughts on the following:
Is it possible that we’re seeing this term premium / the long end of the curve rising because of supply / demand factors; specifically among financial institutions? Do financial institutions have the stomach to be long duration?
Some things to consider:
1) Are the concerns over banking solvency/liquidity due to the bank failures earlier this year causing banks to limit their exposure to treasuries? Maybe some are selling to meet capital/compliance requirements, especially commercial banks dealing with lower deposits.
2) Plenty of pensions in the country are underfunded and boomers are beginning to retire. Can these pensions afford to be long duration or still remain 60/40 while searching for higher yield?
3) Although we’ve seen inflation come down, is the Fed concerned any sort of QE will see a return to the high inflation we experienced last year? I find that a lot of people are focused on the Fed’s action with respect to cutting/leaving/raising rates but QE/QT has a huge influence on the long-end of the curve in my opinion.
Look forward to hearing your perspective on all of this.
Was not expecting the Financial Markets Asmr at the end 😜
Ackman walkin around calming financial and bond markets like a 1907 JP Morgan.
was not ready for econ ASMR at 9:17 🧐
This is heartening to hear. Thank you!
The deficit is out of control, its a period of time when the economy is running very well, interest rates are high and government should cut spending to assist the FED in reducing inflation. If you think $2T deficit is high wait until the next slowdown and governments have to ramp up spending from this already elevated level. This is why bond prices are crashing.
Excellent content
the audio level changes a lot between shots
Do you think there is any chance housing and owners equivalent rent could surprise down and cause a very very low inflation number one month which might bring the fed to cut to maybe 4% fed rate or lower since almost half the hedline number is based on the goody OER number?
Given we’re looking at a second GWOT, I’d expect the growth rate of US debt to spike. If we’re adding $140bn/mo now, imagine what it’ll be in a shooting war.
Should that happen, I’d think the fed will cut rates, inflation be damned.
YA I DOn't believe in lending friends money, i believe giving gifts and don't expect return. if you lend, usually friendship can easily end when someone doesn't pay up
I exclusively share with people who don't like bonds 😉
Never understood why they use the term coupon. Shouldn't it be called a bond dividend?
Coupon is the perfect word. You are buying a $100 bond for $98.55. Its like you have a coupon from the store.
Old times... Bonds were a physical paper document that had coupons that investors cut off to get paid the "dividend."
Ergo the name.
Its an unlivable situation for the working poor.
Here’s the best advice is to Never loan money to anyone watch you will be chasing them for your money back past the deadline plus no more relationship with those person/s anymore and those borrowers know they won’t payback at the end of the day and cares less about you at all. Thank me later.
Don’t ever loan money to friends in real need. Gift them the help they need and it will return far more than a dollar amount. Prerequisite: good judgment choosing these friends.
as i said in the video, its an illustrative example
are you bullish, kyla? 😉
$$$$$ commercial property loans are due to adjust in the next 4 years. If the fed does not start reducing the interest rate soon, sovereign funds are going to scoop up commercial properties and worse, belly up lenders who are holding the notes. Ain't gonna be pretty.
The TLT is at a 23 year low right now. Recession red flags are everywhere. If you're smart you've got your money in a HYSA. Yes it doesn't yield as much as a bond or CD but at least it's relatively liquid. There's just too much risk in both stocks and bonds right now.
If we cut rates anytime soon inflation will come roaring back. Ask any normal person what it cost to live today vs. 2,3,4 years ago. Everything has doubled and it's not slowing down. We have to hold rates.
in Portugal the government cut sales tax and introduced price caps on certain goods. Seems to be working fine. Raising rates in just punishing poor people even more and has a negligible effect on prices imo.
So are we in for a shitty 2024?