Stimmies
November 10, 2025
*********************
–Gov’t is close to re-opening. Trump’s $2000 tariff dividend and idea-float of the 50-yr mortgage teeters towards desperation (in my opinion), but stocks love all of it. Bonds, not so much.
–The odds of a rate cut in December should decline significantly if the administration is fueling new stimulus. That idea would work to flatten the curve, but inflationary aspects might undermine the long-end even more. On Friday tens ended unch’d at 4.091%. 30y was +1.4 at 4.699%. This morning 10s are up 4 bps at 4.13 and 30s are up 3 at 4.728%. The 2y is currently 3.595 vs 3.555 on Friday, so thus far it’s sort of a parallel shift to higher rates. 3-year auction today, moved up due to the Veteran’s Day holiday tomorrow. Tens and Thirties are Wednesday and Thursday.
–Friday’s Financial Stability Report was somewhat leery of extended asset valuation levels. FT headline: ‘Robinhood wants to allow amateur traders to invest in AI start-ups’. I heard a podcast with Jeff Gundlach, who made an example of Harvard, which had to tap debt markets for operating cash when donor and gov’t money flows declined, because private equity investments have no liquidity at carried valuations. He extended the thought to Private Equity ETF’s, a classic time mismatch offering daily liquidity on investments that are on the opposite end of the liquidity spectrum.
–First major snow in the Chicago area today. Off to shovel the driveway!
