Good Monday AM,

I hope you had a fantastic weekend.

Not much in the way of economic data today (actually none). Bonds started off in another hole but turned around once Bill Ackman commented that he covered his bet against long-term Treasurys, believing that investors may increasingly buy bonds as a safe haven because of growing geopolitical risks, the latest of which being the Israel-Hamas war. “There is too much risk in the world to remain short bonds at current long-term rates,” Ackman said in a post on X, formerly known as Twitter, on Monday morning. “We covered our bond short.” An interesting thing to recognize is that the billionaire hedge fund manager first disclosed his bearish position on 30-year Treasurys in August, betting on elevated yields on the back of “higher levels of long-term inflation.” The 30-year Treasury yield has risen more than 80 basis points since the end of August, making Ackman’s bet profitable. Bond prices move inversely to yields, so Ackman’s bet against bonds was, in effect, a gamble on higher rates. He won. Now that he has covered and has said so publicly, the 10-yr is down to 3.85%. A welcome respite for sure. The key will be if we can continue to make some progress. A close below 4.75 brings in a new channel and brings in a .25 improvement in rates. Fingers crossed.

This is an important piece albeit not welcome from the WSJ.

We need to know it thought to be able to meet objections. I think this will be the paradigm for a long time. Even when rates recede, prices will remain elevated…

Getting on the property ladder has rarely been tougher for first-time buyers. The cost of buying a home versus renting one is at its most extreme since at least 1996. The average monthly new mortgage payment is 52% higher than the average apartment rent, according to CBRE. The premium last peaked at 33% in the second quarter of 2006. The current hefty ownership premium reflects the surging cost of debt, as rates on a 30-year mortgage reach 8%, as well as high house prices.

Please remain safe and healthy, make today great!