Category Archives: Bonds

Problems in Simulating Investment Returns

Simulating hypothetical future investment returns can be important for investors trying to make decisions regarding the riskiness of various investing strategies.  The trouble is that it is difficult to do right, and I rarely see it done right.  Here are some of the trouble spots: 1) You need to get the correlations right across assets. […]

Redacted Version of the October 2014 FOMC Statement

September 2014 October 2014 Comments Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace. Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace. No change. This is another overestimate by the […]

Mantra: Interest Rates Have to Rise, Interest Rates Have to…

I thought of structuring this post like a fictional story, but I couldn’t figure out how to make it good enough for publication.  Well, truth is often stranger than fiction, so have a look at this Bloomberg article pointing at a 37% loss in the ProShares UltraShort 20+ Year Treasury (TBT). A few points to start […]

Numerator vs Denominator

Every now and then, a piece of good news gets announced, and then something puzzling happens.  Example: the GDP report comes out stronger than expected, and the stock market falls.  People scratch their heads and say, “Huh?” A friend of mine who I haven’t heard from in a while, Howard Simons, astutely would comment something […]