2011 Model Portfolio performance

The Brinker Fixed Income Advisor was named among the top performing investment letters over the past 5 years in the December 2011 Hulbert Financial Digest. Our Model Portfolio performance in 2011 was helped by our decision in May to reduce our exposure to convertible bonds and high yield bonds and reinvest the proceeds in the [...]

Credit market indicators – Nov 25…

as of 10:40a eastern: Indicator – value (chg) ————————————————– TED Spread — 50 (+1) LIBOR-OIS — 74 (0) USD 2yr Swap Spread — 54 (0) US Inv Grd Baa/10yr UST Spread — 316 (-2) EUROZONE: ———————– German 10yr note — 2.27% (+7) France 10yr note — 3.70% (-2) Italy 10yr note — 7.30% (+19) Spanish [...]

FOMC statement–November 2, 2011

FRB: Press Release–Federal Reserve issues FOMC statement–November 2, 2011.

FOMC minutes

If you read just one thing today, this is the key paragraph from today’s FOMC August minutes released this afternoon : Participants discussed the range of policy tools available to promote a stronger economic recovery should the Committee judge that providing additional monetary accommodation was warranted. Reinforcing the Committee’s forward guidance about the likely path [...]

Deflation, Disinflation, Inflation, Stagflation, ???

Today we got the March 2011 CPI inflation data and it shows that the FOMC has won (for now) the disinflationary battle they undertook with the QE2 program. The year-over-year core inflation rate has now risen for six consecutive months. The March figure of 1.19% is the highest year-over-year core inflation rate since a 1.34% [...]

Beige Book notes

Today’s Beige Book report provides updated economic information collected before April 4th, 2011. Below are my highlights from the report: economic activity improved since last report Manufacturing strong Loan demand flat to up slightly Residential & commercial real estate weak No wage pressure Higher commodity costs Auto sales improving Tourism improving Labor markets improving. March [...]

U.S. Treasury yield curve spread analysis

There is increased attention on the level of U.S. Treasury interest rates now that rates have moved up and are nearing their highest levels from last year. The recent rise in rates from the current round of QE2 (or Credit Easing) from our fearless leader OB1-Bernanke and his band of freedom fighters is playing out [...]

Bernanke speech … my observations

Today in Washington, D.C. Fed Chairman Ben Bernanke gave a speech on the economic outlook and macroeconomic policy. Below are my observations from that speech: recovery appears to be strengthening – but not enough to bring the level of job creation necessary recovery is shifting into self-sustaining mode (out of gov’t stimulus mode) housing sector [...]

Jeremy Grantham

This 30 minute interview with Jeremy Grantham is one of the smartest I have seen recently. Watch it!

FOMC minutes

The Federal Open Market Committee (FOMC) minutes of the Sept 21st 2010 meeting are worth reading. Below are some bullet points: roughly $28 billion principal payments were reinvested into Treasuries with maturities between 2-10 years. Mostly nominal, but a little into TIPS continuing to operate the reverse repo and term deposit facilities on a light [...]

Double Dip?

Many investors are convinced a double-dip recession is inevitable. Not me. One of the most reliable forecasters of recessions is the yield curve. A simple way to measure the steepness of the yield curve is to calculate the difference between the 10-year Treasury note and 3-month Treasury bill. Since 1955, there have been 9 recessions [...]

U.S. Treasury yield curve

Look at how little rates have changed on the U.S. Treasury yield curve over the past year: The 30-yr bond yield closed at 4.35 today and the 3-mo bill closed at 0.16 leaving us with a curve that is 419 basis points steep. The 10-year (3.47) minus the 2-year (0.81) is 266 basis points steep.  [...]

FOMC Minutes – bullet points

The minutes of the March 16th Federal Open Market Committee (FOMC) meeting were released this afternoon. Below are the highlights: nearly all of the Fed’s special liquidity programs are closed and there are no market strains spreads on ABS (asset-backed securities) remains tight Fed’s balance sheet grew to $2.3 trillion All maturing agency debt and [...]

Federal Reserve’s exit strategy

Federal Reserve Chairman Ben Bernanke provided the following statement to the U.S. House of Representatives Committee on Financial Services this morning.     In our view, the notable points from the statement  are: Most of the emergency credit facilities have been closed The amount of credit extended has declined more than 90% from $1.5 trillion [...]

CPI Report – good news for FOMC members

Today’s CPI Report from the Bureau of Labor Statistics is welcome news to FOMC members. They appear to have won their battle against deflation for now. The headline CPI increased 2.72% year-over-year and the core CPI increased 1.82% year-over-year. The following chart illustrates the CPI rates over the past two decades.   What is especially [...]