Earlier this week, I noted that any idiot could’ve made a killing betting on a rebound in bonds following the bearish overshoot which pushed 10-year US yields as high as 5.02% in late October.
Forgive the indelicate cadence. It’s not aimed at readers. Rather, it’s an allusion to the ridiculous array of needlessly convoluted long duration “strategies” I saw peddled across publicly-available investment “services” and wildly expensive Substack letters marketed to the masses by an ever expanding constellation of profiteers who, if their investing prowess is anything like their writing skills, will have you flat broke in no time. (If the astronomical costs don’t get you, the bad advice they’re not legally allowed to sell surely will.)
The self-evident reality, as illustrated in “Historic Rally Leaves Benchmark US Yields Hilariously Unchanged For 2023,” is that a simple long-end Treasury ETF was all you needed. You just had to buy it and hold it for 60 days. You’d be up 20% in 40 sessions. Ask one of the Substack letters or services overcharging you every month what that works out to annualized. Then compare that figure to the 2023 performance of the recommendations they sold you. Let me know which figure is higher.
About four hours after I published the linked article above (the sole purpose of which was to highlight — and I’m quoting myself here — “one of the single-largest two-month [bond] rallies in history”), Bloomberg ran a piece called “Global Bond ‘Carnival’ Sets Stage for Record Two Months.” (You gotta love it.)
In it, Ruth Carson and Masaki Kondo looked at the two-month performance of Bloomberg’s Global Aggregate gauge, and discovered the best two months ever. I looked instead at the rolling 42-session return on the index. The result was (obviously) the same, but it looks cooler to chart the daily series.
As the figure shows, we’ve just seen what may as well be the most dramatic two-month run for one of the broadest available gauges of global bonds in the 23-year history of Bloomberg’s data.
If you’re wondering whether the YTD, play-by-play (so to speak) chart for 2023 looks similar to familiar figures illustrating US Treasurys’ August-October selloff (which put US government debt on track for an unprecedented third annual decline) followed by a dramatic come-from-behind act, the answer is of course “yes.”
Global bonds were down 4% for 2023 through late October. As of December 27 (so, with just two days left) they were up more than 5%.
It’s been a fun ride. As long as you had some Dramamine.
This idiot made some money, thanks H.
I was a steady subscriber of Newsweek for 40 years until the paper version folded. It came to me on Tuesdays, as did Time. I especially remember a Newsweek issue which contained the results of a huge investigative piece describing the effect of the Boomers on our population and the likely results on all aspects of our lives for the next twenty-five years or so. Now, when this was published the Boomers were mostly all born and there wouldn’t be any more. Anyone with a copy of the Statistical Abstract could see the trend. Newsweek was the first to write about this in-depth. Time, it seems, hadn’t figured this out but lo and behold, the same Tues as the Newsweek piece hit the streets, Time had the same general cover. Time’s work on the subject was superficial but think of it, the simultaneous discovery of one of the top ten trends in 300 years of history by the two biggest news magazines. I started watching after that. What I saw was that Time and NW were doing the same big pieces every week. I could tell who was stealing from whom by the depth of work. Time was the copycat most of the time. Gee, I guess the trend is still there.
I like how your apparent New Year’s resolutions involve not only not pulling punches when it comes to geopolitical attrocity, but also naming names when it comes to others’ low-effort work lifting your material.
It’s more that I intend to go back to the proverbial basics a bit when it comes to my editorial cadence as it manifests on an article-to-article basis. Some of the stuff was getting a bit too professionalized.