10 Year Treasury

"Dear Fed, Hike Slower... Shrink Faster..."

"Investors not being properly rewarded for the risk they are taking can have longer term repercussions... The normal process of price discovery has been changed, not just by the Fed’s activity in the market using its balance sheet, but also through the constant barrage of headlines designed to move markets."

European Junk: "The Good-Looking Ones Are Always Bad News"

"I understand the attraction to shorting European junk. It’s easy to look dreamily at this chart and imagine spreads doubling to 5% without batting an eye... But there are a couple of problems with this trade..."

Stock-To-Bond Ratio Back At 2007 Peak

While a rising stock to bond ratio isn’t all that surprising, especially in a bull market, only in 1999 did stocks outperform bonds by a wider wide margin over a two quarter period.

"Trump Trade" Or Just A $200 Billion Liquidity Illusion?

Since the election we’ve heard the rally in stocks characterized as a “Trump Trade” or a “reflation” trade. We think there is a really important element missing from this analysis that could change very quickly over the next several weeks.

Debunking The Big Lie

There is no such thing as good monetary policy. There is no such thing as effective monetary policy, or monetary policy that does no harm. There are only the times when most people see no overt symptoms, when they don’t realize the damage being done.

What If Hillary Had Won?

Fixed income markets are essentially in a new world; US stocks, by comparison, are in only a slightly better position. The “Trump rally” has only been worth 4-5% when compared to our “What if” Clinton scenario. Realistically, it should either be more (if bond markets are right about a breakout in inflation/corporate pricing power) or less (with higher rates pressuring equity valuations in the absence of greater earnings power).

US Financial Markets - Alarm Bells Are Ringing

If any unexpected fundamental news should emerge that throw doubt on the beliefs so widely held by market participants of late, a sizable surge in market volatility is likely to ensue.