Equities Struggle as Yields Climb in 3Q23 The major U.S. stock market indexes were down across the board in 3Q23, thanks to a combination of revived recession warnings, rising yields, and a looming government shutdown. The 10-Year Treasury yield rose to 4.6% in September, climbing by more than 20.0% in 3Q23 to its highest rate
In May, I wrote a follow-up memo to Sea Change (December 2022) that was shared exclusively with Oaktree clients. In Further Thoughts on Sea Change, I argued that the trends I had highlighted in the original memo collectively represented a sweeping alteration of the investment environment that called for significant capital reallocation. This memo was
You can watch and listen on Youtube via the timestamps below: 00:00 Introduction 24:37 Powell Is No Volcker – Luke Gromen 28:18 The Fed Has Broken The U.S. Energy Market 38:35 Will Demand Destruction Keep Oil Prices From Spiraling Out Of Control (Greater than $120)? 42:51 How Long Till The Fed Intervenes? 47:49 The Banking
I graduated from Yale University’s PhD programme in economics six years after Janet Yellen did so in 1971. We both studied under Nobel laureate Professor James Tobin. Nevertheless, she is a liberal and I am a conservative when it comes to economic policymaking. I coined the phrase “bond vigilantes” four decades ago. Now, as the
Ed Yardeni’s op-ed in the FT is an important signpost: Credible, mainstream analysts are starting to see the US Treasury feedback loop/debt spiral, and the mainstream financial media is starting to report on it. However, they do not appear to realize two critical things yet: With all due respect to Yardeni, things are WAY different
Unhedged has written several times about the rising term premium, an important, and concerning, attribute of the recent sell-off in long bonds. The term premium is the extra dollop of yield investors get for holding long-dated Treasuries, as compensation for taking on interest rate risk. Think of it as the difference in yield between a