Lykken on Lending

09.16.2024 "Wooden Ships" Calm Seas, Prepare for Unexpected ------------------------ Wooden Ships above the oil, barely free. Easy, Bonds know the way it’s supposed to be. Gold rose sharply above 2600, an all-time high, in fear of a broader war. The US and NATO signaled they will arm Ukraine with long-range missiles. Putin said such action … [Read more...]

9.9.24 Jobs are the "Rock Brigade" ----------------------- Jobs are bangin' on their drums, bangin' on Bonds’ door, wavin' their flags, tellin' Bonds to score. Watch out for the Rock Brigade. On the eve of Fed easing, inversion ended between the 10-year and 2-year Treasury Notes as Job weakness gained momentum. Flash indicators across the … [Read more...]

08-12-2024 "Always Crashing in the Same Car" Into The Bear Wall --------------------- The market’s going ’round and ’round the DATA garage Must have been getting close to 3.44. The struggling Dollar and Gold’s sustained bullishness point to calamity ahead.  Meanwhile, Crude Oil and Bonds do not expect WW3 within the next two … [Read more...]

07-22-2024 Bulls Say "Welcome to Paradise" --------------------- Dear Powell, Can you hear Jobs whining? It's been three whole years since inflation felt your hold. Despite declining volatility, the new bullish trend remains solid. News continues to affirm that two rate cuts make long-term rates happier three. According to the BofA … [Read more...]

07-15-2024 "Espresso" Brewing Liquidity Issues ------------------------ The markets movin’ in a tight range.  Isn’t that sweet?  Try not to sleep.  Don’t you need Espresso? Some news gives you a jolt.  Then you see the screen blink red and green because it's speculating about nothing.  No easing, high inflation. High easing, no growth.  No … [Read more...]

07-08-2024 Liquidity is running dry, "It’s So Lonesome it Could Cry." --------------------- Hear that lonesome Repo well. It sounds too low to fly. Last week, the implied likelihood of a September Fed rate cut rose to 73%. Over a week ago, it was 62%. Bonds cry for a “higher for longer” Fed. But the fall of the dollar and the steadfastness … [Read more...]

06-24-2024 Affordability Remains an Obstacle and Servicing values will Drop, it's a "Ball of Confusion" ----------- People selling out, people buying in because of the color of their screens. With the Fed listening to Bonds and data, look for 30-year mortgage rates to stay below 7.75 and reach 6% by yearend while the 10-yield falls below … [Read more...]

06-17-2024 Bond "Barracuda" ------------------ Bears, this is the end; Bulls rise up again - to reign They had to take the trend away. Bond barracuda kept the Fed in line, resulting in a new bull market. Long-term, look for the 10-year yield to stay below 5% and mortgage rates below 7.75. Imagine a sub-6% 30-year mortgage rate by yearend … [Read more...]

06-10-2024 Is Data "Tutti" or "Fruiti"? ------------------------- “Little Richard, what about the data-sensitive market?” Tutti Frutti, go uppie. Tutti frutti, go downie. Tutti Frutti, go uppie. How many angels can dance on the head of a pin? About half. Yet traders keep dancing with every datum as if it changes the world while keeping prices … [Read more...]

06-03-2024 "Suite: Judy Blue Eyes" Hesitation, Higher Yields, or More Interest. Hard Choices. -------------------------- It's getting to the point, Jay is no fun anymore. He is sorry. Recent Treasury auctions show investor hesitation to buy. Do they expect higher yields? The low appetite, coupled with the higher-for-longer Fed policy, will … [Read more...]

05-27-2024 The Fed Leaves US "Right Where You Left Me" ---------------- Links break up, links get married. Cycles get born, cycles get buried. Trends change, rumors fly through new lies, (with-TS only) Screens Right Where You Left them. The Fed minutes underscored its “higher for longer” outlook, resulting in a flattening yield curve and a … [Read more...]

05-20-2024 Countries In Recession Won't Be  "Lonely Boy" ------------------------- Any old report keeps us waiting.  Waiting, waiting.  Powell’s a Lonely Boy,  He’s a Lonely Boy.  Oh, Powell, you are the love that keeps us waiting. The latest tame inflation dropped rates.  Many expected a strong report that would have pushed rates significantly … [Read more...]

05-13-2024 "High Hopes" Or Decay For the Long Haul ----------------------- At a higher altitude, QT unfurled. Bulls reached the High Hopes of that dreamed-of world. Steps taken forward, Bears sleepwalking back again. Dragged by the force of Fed Powell’s higher-for-longer tide. The perpetual auctions continue to find investors liking high … [Read more...]

05-06-2024 Bad Data is "Criminal" --------------------- The data hustle, they’re no good at all. Moves like a loser, they are mixed, up, down, done. Dripping Oil, softening Gold, and cooling Copper lifted the short-end’s hope that the Fed will ease this year. Friday’s Jobs report helped. Additionally, the Fed’s significant slowing of QT … [Read more...]

04-29-2024 The Bears Ask, "Have You Ever Seen The Rain?" ----------------------------- Parker told us long ago There's a calm before the storm He knows Last week, stagflation appeared in the GDP data, with slowing growth and rising inflation.  As a result, the 10-year yield hit our bear target of 4.71. Jimmy Carter … [Read more...]