Correlations come and go… some lasting longer than others … and some more intuitive than others…
Interest rates up, home sales down, all other things being equal…
We could go on and on…
Fessing up here… in doing the research for the Scott Challenge below, the tight correlations were mentioned… Wow are they real…
This is the normal… some correlation, but loose at best – Oh, this is Crude WTI and the 10 year
This is a VERY TIGHT Correlation – Extreme!
So why does it matter?
Oil prices are dragging interest rates around like a rag doll … until this unlocks, rates may be a slave to Geopolitical events… Major event? Much higher rates? … Much higher rates will bring out some crazy comments (default etc.)… We will save those for later…but will bring this back to our collective attention if needed!
It works both ways of course, but such a super tight correlation will certainly give many Bond guys indigestion …
Scott – Careful with Challenges
Literally about 50 yards from the homestead Scott Bessent gave a speech to a local University Tuesday night, and in that speech, something was said that made for a lot of banter …
“I am the House now!“
Personally, I think Bessent is very smart, and is trying to do a good job…. After listening to the actual speech, here on Youtube, its easy to hear the tone was not meant as demanding or chest thumping… BUT, many will take it that way… heck, I did … before listening to his actual tone…
Never, ever, challenge Wall Street! – No matter who you are…not even giving the appearance of such is a good idea! Too many egos..
So another less than light Friday post… apologies… a lot to talk about…
Wednesday jumped in with all of the Tax questions – again well done on staying ahead of the deadline next week…
Have a good day- Happy Friday – Talk next week!
John A. Kvale CFA, CFP
AI Content Authenticity: All of the following text content has been completed by myself and has not been edited or created by AI. Occasionally we do use AI for images and will note when appropriate.
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
