No matter how farfetched the idea might be of the Treasury Department repricing its gold to create cashflows out of thin air, even a remote possibility that desperate governments will do desperate things is a reminder to always have real assets in th...
Finally, and now for something completely different. There has been some buzz lately over what other tricks the Treasury Department might have up its sleeve to try to bring down the cost of funding. The long-dated off-the-run buybacks certainly didn’...
10/23/2026 22:54
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What does it all mean? Earnings are booming, which is great, and the optimistic view on the CWRV stuff is that we are getting some much-needed discipline in the AI buildout which will make the whole thing more sustainable. Against that rosy view are ...
10/23/2026 18:49
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Of course, I can’t let a WAAR go by without one of my excel-crashing 3D scatterplots. This one shows the spread between the real yield and potential real GDP growth (x-axis) against the 5yr CAPE ratio in the y-axis. The size of the dots shows the 12m...
10/23/2026 13:18
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Here is a long-term chart showing real yields against R-Star, real GDP growth, and potential real GDP growth. Note that real yields are now at or above what might be considered a natural equilibrium (2% or so) and that a further increase might put us...
10/23/2026 00:23
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With bond yields coming off the boil last week, perhaps we are now settling into a range for a bit. While the CPI came in hotter than expected, there is currently little pressure on the Fed to raise rates at the end of October. While the consensus ap...
10/22/2026 21:47
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On the valuation side, the forward P/E-multiple is now 19x and the 5-year CAPE ratio is at 27x. That’s very high but it includes 2021, which was just on the heels of the COVID crash. In an attempt to make the CAPE ratio less backward-looking, I adjus...
10/22/2026 19:36
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In terms of the broader macro picture, earnings season is now upon us and with 53 companies reporting so far, we don’t really have a handle yet on how the season is going to look. But the trend remains the same: earnings are booming and valuations ar...
10/22/2026 12:03
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In the grand scheme of things, the widening in high yield spreads remains well contained with few signs of contagion. Beside the parallel to telecom credit during the late 1990’s, another interesting analog might be the high yield energy blowout in 2...
10/22/2026 02:51
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The big news last week was of course the sharp drawdown in high yield data center bonds and what that might mean for the broader AI buildout. I have been eyeing the price analog between the AI boom today and the internet boom-turned-bust in 1998-2000...
10/21/2026 23:14
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