Rates Up Here is a Problem

These are likely the very final blogs of the site, so I want to make them useful. We are bullish providing the conditions are right. One of those conditions is lower rates. I cannot sit here and tell you that the US 10YR at 4.30% is a nothing burger. The fact that the Fed cannot assuage markets to fall in line is always troubling. I have seen this play out before and the Fed ALWAYS wins. But, make no mistake, the jitters you’re sensing in the tape with this overhang is due to the bond market fucking off.

There are many things to like about this tape, two of which are not valuations and the cost of capital. In order to justify the higher valuations under the auspices of ‘valuation expansion’, we need the cost of capital to come down.