The hottest Bonds Substack posts right now

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THE MACRO-FINANCE SITCH: The Streams (of Falling Short-Term & Rising Long-Term U.S. Treasury Rates) Cross

Brad DeLong's Grasping Reality • 115 implied HN points • 08 Jan 25
💰 Finance Markets Bonds Economics Investing Policy
  1. Short-term Treasury rates are falling while long-term rates are rising, showing a change in investor expectations about future interest rates. This shift hints at more uncertainty in the market.
  2. The current economic situation could lead to tumultuous changes similar to past events in the UK, with concerns about the U.S. government's approach to debt and fiscal policy.
  3. Investors seem to be valuing flexibility over fixed returns, suggesting they want to avoid risks associated with long-term bonds in a fluctuating economy.

Top Links 557 Inflation worries and the US bond market. Russian oil mega merger. Van Gogh & the art of dying.

Chartbook • 386 implied HN points • 11 Nov 24
💰 Finance Economics Investments Market Trends Bonds Oil
  1. Inflation concerns are becoming a big issue again for the US bond market. This can affect interest rates and borrowing costs for everyone.
  2. There is a significant merger happening in the Russian oil sector. This might change the landscape of oil supply and prices globally.
  3. Van Gogh's life and art are being explored in a new way, touching on themes of mortality and creativity. His work continues to inspire deep reflections on life and death.

Top Links 552 Nasty bonds on underwater office buildings. Indian top earners in Germany. Avian flu & U.S. military food insecurity.

Chartbook • 286 implied HN points • 05 Nov 24
💰 Finance Bonds Investment Economics Corporate Market Trends
  1. There are problematic bonds tied to office buildings that may not hold value. This means investors could face significant losses.
  2. There are many Indian professionals earning high salaries in Germany. This indicates a strong presence of Indian talent in the German job market.
  3. Avian flu is affecting food security for U.S. military personnel. This raises concerns about the availability of safe food for those in service.

Ticker Take: a weekly newsletter on investing.

Jon’s Newsletter • 99 implied HN points • 11 Aug 24
💰 Finance Investing Stock Market Market Trends Economic Analysis Bonds
  1. Market corrections are normal and can be healthy for long-term growth. It's important to own a mix of investments and stay calm during downturns.
  2. After a drop in the stock market, like with the S&P 500, there's often a bounce back, with strong average returns in the months that follow.
  3. Media companies are struggling with changes in viewer habits, which may lead to consolidations in the industry. This means fewer players but potentially stronger companies in the long run.

Hedging Inflation with Real Assets

In My Tribe • 622 implied HN points • 12 Dec 24
💰 Finance Investments Inflation Bonds Real Estate Commodities
  1. Investing in real assets like real estate, gold, and commodities can help protect against inflation. These assets are expected to appreciate more when inflation rises.
  2. Understanding profitability is key when investing. It combines rental income, appreciation, and interest rates to determine if an investment is worth it.
  3. Inflation-indexed bonds (like i-bonds) can be a good hedge but have limits on how much you can buy. They provide some safety against inflation, even though their performance can vary.
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Are TIPS and I-Bonds Good Investments?

The Informationist • 963 implied HN points • 28 May 23
💰 Finance Investments Bonds Inflation Government Assets
  1. TIPS are Treasury Inflation-Protected Securities that protect investors from inflation by adjusting principal based on changes in CPI.
  2. I-Bonds are similar to TIPS in protecting from inflation, but have fixed rates and are not tradable in the secondary market.
  3. Both TIPS and I-Bonds are highly dependent on CPI for pricing and may not offer positive real rates of return in the real world.

Ticker Take: a weekly newsletter on investing.

Jon’s Newsletter • 119 implied HN points • 05 May 24
💰 Finance Investing Stock Market Earnings Dividends Bonds
  1. Selling stocks in May may not be the best strategy, as historical data shows it only works about a quarter of the time since 2008.
  2. The current stock market is looking healthier, with positive earnings and potential interest rate cuts, which might lead to steady gains this year.
  3. Investors are keeping an eye on dividend stocks and marijuana stocks, as both sectors show potential for growth and steady income.

BERKSHIRE HATHAWAY’S TOBACCO HISTORY

Reflections on "Going Down Tobacco Road" and Investing • 530 implied HN points • 18 Jul 23
💰 Finance Investments Market Analysis Bonds Financial risk
  1. Warren Buffett invested in tobacco businesses like R.J. Reynolds, showing a historical investment pattern.
  2. Buffett sold his R.J. Reynolds stock in 1984, missing out on higher returns, showcasing his investment strategy.
  3. Buffett made a successful investment in RJR Nabisco bonds in 1989, demonstrating his keen awareness of financial risks and rewards.

Daily Chartbook #168

Daily Chartbook • 1572 implied HN points • 25 Mar 23
💰 Finance Markets Investing Economy Stocks Bonds
  1. The Biden administration planned to refill the Strategic Petroleum Reserves at lower oil prices but hasn't yet.
  2. For-hire truck tonnage has been increasing consistently for the last three months.
  3. There is concern over a foreign central bank maxing out the FIMA repo, not covered by FX swap lines.

3 Fund Portfolio

Market Sentiment • 452 implied HN points • 19 Mar 23
💰 Finance Investing Asset allocation Bonds Index funds
  1. Successful investing comes down to diversification, low costs, and discipline.
  2. The 3-fund portfolio includes U.S. stocks, international stocks, and bonds to ensure balance and minimize risks.
  3. International diversification balances home country bias, while bonds provide stability during stock market downturns.

The Definitive Guide to Bonds

Market Sentiment • 432 implied HN points • 02 Apr 23
💰 Finance Investments Bonds Portfolios Interest Rates ETFs
  1. Leverage in bond investments can work well but also lead to significant losses if market conditions change rapidly.
  2. Bond prices are impacted by interest rate movements, where older bonds may lose value with rate hikes.
  3. The choice between individual bonds and bond ETFs depends on factors like diversification needs, fees, and level of investment sophistication.

Endgame #2

The Dollar Endgame • 319 implied HN points • 28 Sep 23
💰 Finance Currency Bonds Market Analysis Economic Impact Government shutdown
  1. Japan is facing challenges with its currency and bond market, with the USD/JPY crossing critical levels and the market pressuring the Yen amidst debt concerns.
  2. The US bond market is experiencing significant turbulence, with record lows in various instruments and rising yields posing challenges for investors.
  3. China is grappling with an economic slowdown fueled by a declining property market and potential need for widespread bailouts, leading to concerns about the country's economic future.

Data Update 3 for 2023: Interest Rates and Bond Returns

Musings on Markets • 599 implied HN points • 31 Jan 23
💰 Finance Interest Rates Bonds Investment Market Analysis Economic Trends
  1. In 2022, both stocks and treasury bonds saw very bad returns, with treasury bonds performing the worst in historical terms. Investors lost significant money as interest rates rose sharply, which was unexpected for a market often seen as safe.
  2. Interest rates increased due to rising inflation and not just the actions of the Federal Reserve. As inflation went up, so did investor expectations, which led to higher rates across the board.
  3. Corporate bonds were also hit hard, especially lower-rated ones, leading to increased costs for companies. As a result, many companies may struggle to pay back debt, especially if the economy weakens.

The Big Bond Week

Ironsides Macroeconomics 'It's Never Different This Time' • 137 implied HN points • 27 Jan 24
💰 Finance Economy Monetary Policy Investments Bonds Market Analysis
  1. The FOMC meeting and the Treasury's Quarterly Refunding Announcement are key events affecting policy and market reactions.
  2. Investors are closely watching for details on rate cuts, balance sheet reduction, and labor conditions.
  3. The upcoming employment report could impact policy decisions, especially in relation to labor demand and supply.

Payroll Preview & Return of the Policy Put

Ironsides Macroeconomics 'It's Never Different This Time' • 137 implied HN points • 01 Nov 23
💰 Finance Economics Markets Policy Investing Bonds
  1. The Federal Reserve may not raise rates if certain conditions are met, such as softening labor market data or 10-year Treasury rates staying near 5%.
  2. A sustainable rally in the Treasury and equity markets requires a rally in 2-year Treasuries to stabilize the banking system.
  3. To reduce damage to bank balance sheets and profitability, yield curve normalization with a starting point at 4.75% could be beneficial.

What is a bond?

Concepts of Finance 🧠 • 219 implied HN points • 23 Mar 23
💰 Finance Bonds Investments Market Analysis Financial Education Risk Assessment
  1. A bond is like an IOU. When you buy one, you're lending money to a government or company for interest over time.
  2. There are different types of bonds, like government bonds for public projects and corporate bonds for business funding.
  3. Bonds have important terms like issuer, coupon rate, and maturity date, which help determine how they work and what investors earn.

How to identify distress in the financial system?

Global Markets Investor • 39 implied HN points • 26 Jan 24
💰 Finance Indicators Bonds Stocks Volatility Resilience
  1. It's crucial to understand the credit rating scale of bonds to identify distress in the financial system, as issues in the bond market can quickly impact other financial sectors.
  2. Monitoring indicators like bond spreads, such as the ICE BofA US Corporate Index Option-Adjusted Spread, can help determine the financial system's strength. Lower spreads usually indicate a healthier market.
  3. Using indices like the St. Louis Fed Financial Stress Index offers a comprehensive view of financial market stress, incorporating various metrics like interest rates, yield spreads, and stock and bond volatility.

US debt is risky: A rant about evidence-based investing

Klement on Investing • 5 implied HN points • 13 Nov 24
💰 Finance Investing Debt Economics Bonds Market Analysis
  1. US Treasuries aren't actually risk-free. When the government borrows more without a plan to pay it back, the risk of default increases, which can lower bond prices.
  2. Many finance experts think the US is overspending, yet they still believe that investors will keep buying US debt without questioning it. This is a strange contradiction.
  3. It's important to ask for real proof when investing advice is given. Effective investing should be backed up with solid data, not just opinions or conventional wisdom.

Too Big To Fail

The Last Bear Standing • 160 implied HN points • 10 Mar 23
💰 Finance Banking Bonds Liquidity Regulation Risk management
  1. In the mid-2000s, banks faced a significant problem with growing leverage and inadequate cash reserves.
  2. The 2008 financial crisis led to emergency bailouts to address liquidity issues in the banking sector.
  3. While regulations and liquidity injections have reduced the risk of widespread liquidity crises in large U.S. banks, the 'too-big-to-fail' problem persists in the broader financial system.

Top 5 financial posts of the trading week 8/2024

Global Markets Investor • 19 implied HN points • 26 Feb 24
💰 Finance Investing Market Trends Economic Indicators Stock Market Bonds
  1. Weekly performance update: Last week saw significant increases in major US indexes, VIX volatility, Bitcoin, and gold. Nvidia stood out with a 9% rise after surpassing earnings and guidance expectations.
  2. Nvidia's remarkable growth: Nvidia's market cap doubled to $2 trillion in just 8 months, making it the third largest US company. Its outstanding revenue forecast and stock performance pose a question about its future success.
  3. Chinese market support and US bank debts: Chinese authorities are propping up their stock market, while major US banks are facing challenges with bad property debt surpassing loss reserves. Keep an eye on US government bond yields and PCE inflation data for potential impacts on various markets.

European bond yields may keep rising

Klement on Investing • 1 implied HN point • 04 Nov 24
💰 Finance Investing Bonds Markets Economy Interest Rates
  1. European bond yields are likely to keep increasing. This means that borrowing costs in Europe might rise.
  2. In recent weeks, notable increases in bond yields have been seen in the US, UK, and Germany. This suggests changes in how investors view long-term bonds.
  3. Investors might be adjusting their expectations about the future of government bond yields, moving away from the idea that they will consistently decline.

What do Negative Interest Rates mean for Innovation?

Turnaround • 59 implied HN points • 29 Jun 20
💰 Finance Innovation Economy Bonds Venture Capital Cryptocurrency
  1. Negative interest rates can impede the process of creative destruction by keeping unproductive "zombie companies" alive, hindering market opportunities for new and innovative startups.
  2. Negative interest rates may lead to more funding flowing into startups and venture capital as investors seek higher returns in riskier assets, potentially boosting the startup ecosystem.
  3. Negative interest rates could boost the crypto economy by driving more interest in cryptocurrency as a viable alternative to traditional banking, particularly if mainstream banking options become unattractive due to negative rates.

Stocks (and bonds) for the long run: Part 1

Klement on Investing • 4 implied HN points • 14 Feb 24
💰 Finance Investing Stocks Bonds Risk Diversification
  1. The book 'Stocks for the Long Run' by Jeremy Siegel may present an overly positive view of equities as a fail-proof long-term investment. It's crucial to understand that investing in stocks comes with risks and uncertainties, even over longer periods.
  2. Historical data corrected by Professor McQuarrie reveals the importance of considering a wider range of factors like failures, defaults, and market conditions when evaluating equity investments' returns.
  3. While equities can be a rewarding long-term investment, they are not risk-free. International diversification is crucial to balance potential negative outcomes and ensure successful equity investing in the long run.

Stocks (and bonds) for the long run: Part 2

Klement on Investing • 3 implied HN points • 21 Feb 24
💰 Finance Investing Stocks Bonds Portfolio Diversification
  1. Stocks may not always outperform bonds over long periods - research shows that stocks in the US did not consistently outperform bonds, except for specific time frames
  2. Data suggests that even over the longest investment horizons, there is a significant chance that bonds will outperform stocks
  3. Considering global trends, many countries show significant underperformance of stocks compared to bonds over 20 and 50 years, highlighting the importance of diversification