“A well-thought-out story doesn’t need to resemble real life. Life itself tries with all its might to resemble a well-crafted story.”
― Isaac Babel
Commentary & Analysis
Yields going higher? That’s our guess.
As a trader considering the fate of interest rates it pays to remain open to all “well-crafted stories.” Why? Because, based on many years of empirical evidence in the bag, we agree with the old saw: No one can forecast interest rates.
This is not to suggest many market mavens do indeed get the rate call correct; but most employ the gift of hindsight and the magic of publishing to make it happen. I’m still looking for a way to open a trading position on hindsight--that would be the Holy Grail.
The lead narrative for Black Swan Capital is interest rates are headed higher, at least over the near-term (one- to three-month time frame months). The inputs for this narrative include the usual mix of fundamentals, sentiment, and technical factors. That being said, I thought comments by Lena Komileva, chief economist at G + Economics, printed in today’s Barron’s magazine summed it up well; in two concise sentences she explains why we are long rates, or short long bonds...READ MORE