Here's the Real Reason Treasury Yields Are Rising

[@dewallsworld]

My gosh, this is my favorite part of the Compound and Friends. Please keep Nick and Jessica as regular guests! They make us all wiser.

[@NickColasandJessicaRabe]

Thanks so much for watching!

[@rgwei3521]

these guys are so underated. Data driven, facts driven, no crazy talk, no emotions, pure analytics.

[@NickColasandJessicaRabe]

Thank you!

[@hkraft4830]

macro not doing anything to an investor. Overrated.

[@toddd6563]

Agreed

[@clean-energies]

that's ai not organix bud

[@boonescircles3569]

💯

[@cyb32011]

Nick, Jessica, and Josh solid market metrics! Love this session with you 3. Thank you

[@NickColasandJessicaRabe]

Thank you, we’re so glad you liked it!

[@blueXtwoplustwo]

the only youtube financial/stock channel I need to watch.

[@boonescircles3569]

Jessica Rabe remains my favorite returning Guest.

[@NickColasandJessicaRabe]

Thank you!!

[@martytayman9138]

Three of my favorite people. Also, three people whom I pay the most attention to. I always feel better equipped after listening to these sages. Never a waste of time. Thank you.

[@NickColasandJessicaRabe]

Thanks so much for your support!

[@rickmc73]

I simply LOVE these episodes with Nick and Jessica.

[@TheCompoundNews]

Thanks for watching!

[@NickColasandJessicaRabe]

Thanks so much!!

[@Anonymint-vj7bt]

@@TheCompoundNews What about China selling and yield curve control selling long to lend short?

[@Anonymint-vj7bt]

@@TheCompoundNews btw I know what the Schelling point or catalyst will be for the monetary reset that pushes everyone off the US Treasury and dollar reserve to the Bitcorn. I have a video dedicated to explaining this. Only a few people know this information.

[@jeffreyharrison4045]

Wow! The 3-year chart discussion was profound! Thanks so much for introducing to these amazing guests!

[@NickColasandJessicaRabe]

Thank you for watching!

[@geopietro]

Very convincing. Thank you for sharing. How do you or your guests explain Warren Buffets cash hoard? Thank you again.

[@rahulchahal3824]

Excellent as always. Thanks

[@NickColasandJessicaRabe]

Thank you!!

[@NickColasandJessicaRabe]

Thanks so much for your support!

[@mustavogaia2655]

Jessica is pure fire

[@matt.stevick]

we love ❤️ these two! 📈🇺🇸

[@NickColasandJessicaRabe]

Thank you! 🙏

[@michelvilla12]

So much value in 30 minutes ! Thank you so much! ❤

[@NickColasandJessicaRabe]

Thank you, we’re so glad you found it useful!

[@sergeyyakubovsky7259]

My favorite guests!

[@TheCompoundNews]

They were great as always!

[@NickColasandJessicaRabe]

Thanks very much!

[@amritsingh-e3h]

Thank you, Team JOSH....Josh and joe Terranova are the most sensible on CNBC...

[@davidkane8573]

I just subscribed to nick and Jessica.

[@NickColasandJessicaRabe]

Thanks very much!!

[@MonteRosa849]

Fantastic podcast Josh, your guests are hitting it out of the park every time! Thank you so much!

[@NickColasandJessicaRabe]

Thank you for watching!

[@Pug318]

Jess , she is just so intelligent when she speaks. Both are great guests .

[@NickColasandJessicaRabe]

Thank you!!

[@danielslara2010]

Awesome interview, Awesome guests.

[@NickColasandJessicaRabe]

Thank you!

[@lrm21]

Great show, lots of good data.

[@NickColasandJessicaRabe]

Thank you!!

[@MarkCampbell-z8x]

I appreciate all of these videos. Your charts and analysis are the BEST and thus making it so easy to follow!

[@NickColasandJessicaRabe]

Thank you, so glad you liked it!

[@randylewarchik5216]

These two are absolutely fabulous. Guests very refreshing take on the markets. Definitely not the same old spin

[@NickColasandJessicaRabe]

Thanks very much!!

[@Ryan_Tinney]

All Star team!! Always delivering insightful knowledge about the ins and outs of the markets.

[@NickColasandJessicaRabe]

Thanks so much, so glad you found it useful!

[@colinmiller1054]

I never miss a word these guys have to say

[@NickColasandJessicaRabe]

Thanks so much for watching!

[@zeth9965]

These are such great episodes. I always learn a ton.

[@NickColasandJessicaRabe]

We’re so glad, thank you for watching!

[@jkent746]

Excellent excellent video. Thx for sharing your knowledge.

[@NickColasandJessicaRabe]

Thanks very much!!

[@African_grey]

Great data-driven podcast. Thank you.

[@NickColasandJessicaRabe]

Thank you!

[@evets1]

Very cerebral analysis; refreshing!

[@NickColasandJessicaRabe]

Thank you for watching!

[@bd1098-h2f]

Awesome guests ❤

[@NickColasandJessicaRabe]

Thank you!

[@briancarroll8978]

great show thanks

[@sburson05]

This is incredible content & context, thank you 🙏

[@NickColasandJessicaRabe]

Thank you for watching!!

[@sgagetti]

Great content, easy to follow. Thank you

[@TheCompoundNews]

Thanks!

[@NickColasandJessicaRabe]

Thank you for watching!

[@chknbskt1]

Great guests

[@NickColasandJessicaRabe]

Thank you!

[@anothername2730]

DATATREK DUO

[@NickColasandJessicaRabe]

😀

[@toetheline1591]

Wow at the 19:00 mark is amazing insight discussing the macro-econ factors of placing a large bet on politics to throw off other indicators (currency). Great discussion and guest as always.

[@NickColasandJessicaRabe]

Thank you for watching!

[@farooqahmad3147]

i loved this discussion and very useful information.

[@jcd3869]

Great piece. Here is quick summary to help me retain this and share. 3 year returns in Nasdaq are 40% and 29% for S&P over a fifty year span. Right now Nasdaq is still well below the avg. 40% three year return and S&P is just around its avg. So we still have plenty of room to run. Bubbles have occurred when index is up 100% within a 3 yr period. We are below 30% return in three years so nothing near a bubble according to 50 years history. Then on bond yields based on 60 years of history we have not seen the deficit reflected yet in the rising yields. It is more due to the recent contraction on recession fears in 2023 and now stronger economic data that they have risen. Wow that was an action packed, timely, and extremely useful video. Thanks Josh and Datatrek's Nick and Jessica!

[@NickColasandJessicaRabe]

Thanks very much for watching!

[@Arathreas]

The problem is it doesn't take liquidity into account. It would be naive to assume this isn't a bubble when you look at bank credit and value spread. Too much oversimplified data. I don't disagree with them on bonds, in fact I completely agree with it but the rules you concluded are naive, very naive. To give an example, the GFC in that chart is also at 30% like today. This basically makes this rule utterly useless.

[@UncanaldeInvestitii]

Ok so since 2022 was the bottom (S&P 3500 ish), if this market rallies a bit more, next year this would be a double

[@UncanaldeInvestitii]

The only reason the 3 year looks not bubbly right now is that we're exactly 3 years from the peak of the '21 bubble

[@Arathreas]

@@UncanaldeInvestitii exactly. This 3 year rule is pointless.

[@wnow8987]

Great stuff ❤

[@TheCompoundNews]

Thanks for watching!

[@neontreefrog1]

Great review of historical trends, helps me sleep better 😅

[@lawrencesmith9059]

the auctions are already failing for the Treasury. notice that in a recent auction, the foreign indirect buyers are taking down most of the supply, but the auction is still tailing. the Treasury has some program with those buyers to support the auctions and then sell back into the market. foreign central banks are not big buyers of US Treasuries, so it makes no sense that foreign indirect buyers are gobbling up bonds, when direct buyers and dealers are not taking the supply. yellen has also been running a twist operation, selling or not issuing long term debt and converting it to short term debt and even with that election interference to sway the economy, the long term debt yields are rising.

[@kirkh9044]

AWESOME!!!! THANKS!!!

[@NickColasandJessicaRabe]

Thanks for watching!

[@cookinthekitchen]

I just found out you can read the transcript while watching the show, pretty cool

[@vicschauberger2737]

This is a great show . When Nick's segment starts , at about 8:00 , he compares the real interest rates and inflation of the three different years 60 yrs ago , 20 yrs ago and today using the chart. Does today's formula of calculating inflation using owner's equivalent rent and food price substitution rules skew the inflation numbers compared to past inflation numbers , which were calculated by different formula ? Also , does the fact that the ten year being held artificially low by the Fed funds rate being near 0 for over a decade skew today's 10 yr. at 4.2 % ?

[@clbrown555]

Best intro!!!

[@petert834]

Wow I agree with pretty much everything said here! Nice to have my views reinforced/confirmed by the great panel here. It's the economic/job data driving the recent yield raise since they had dropped in the first place recently because of the scare of weakening economic numbers a couple of months back. Also, that it is not the deficit and debt driving higher rates...yet. At some point it should become a big factor though unless something changes dramatically. Also with gold being bought up by countries to hedge against instability driving up the price and not really the Costco buyers. As for where you go to get bonds when all the alternatives look unattractive, do you think there might be a greater flight to private credit? As for betting on the election I actually had not thought of the possibility that it could be a larger manipulation to profit from other markets as opposed to just trying to influence thinking to make it look like Trump had momentum. As for betting accuracy: I am not so sure it will get a lot better depending on how much is professional/institutional vs retail bettors. If you follow sports betting you know that the retail bettors are the "dumb money" that get burned by the pros. Also with the male-female disparity in betting you might see that act as a bias especially when the election is so polarized between the genders.

[@Arathreas]

There is one thing I need to really point out. Unfortunately, by academic principle that 3 year ruleset it pointless. The second you falsify your model it becomes useless and in this case it's nullified twice. The 2010s were correctly pointed out, but how about we talk about the elephant in the room?! THE GFC of 2008. It's around the same levels as today. Now why is this such an utterly useless metric? It depends on the start date you take for the 3 year horizon. For example covid pivot etc. So you will completely skew your result. How about we do a 4 year period instead. Or a 5 year period? Maybe just a 2 year period? I advice you to completely forget this metric. Also if we keep this logic, 2022 performed horribly, once we get to 2025, we could very much see that 100% increase. Thats the thing, your entry point of the data determins the outcome.

[@TICafeRacer]

In this analysis there is no mention of the treasury’s change in auction issuance starting November of 2023. At that time, when the 10year was slightly above 5% they moved a significant amount of new issuance to the short end of the curve taking pressure off the longer end. There was a paper recently published by a hedge fund co authored by Nouriel Roubini demonstrating that the change in issuance was the equivalent of a 2% reduction in the Fed Funds and drastically reduced the yield on the 10 year. Have you considered the effects of these actions in your work. Additionally, if and when they reverse the yield curve manipulation where do you think the yield on the 10 year will go? Not to mention the refinancing of maturing debt from the past at lower rates?

[@cliffpeebles9705]

A double is a bubble. You can take that to the bank.

[@chrishayes7966]

Nick and I are bday buddies!

[@cliffpeebles9705]

@@chrishayes7966 How did you discover that Chris?

[@chrishayes7966]

@ he said he just had his 60th…born in 1964, like me, the Sharpie and the Ford Mustang

[@cliffpeebles9705]

@@chrishayes7966 Happy Birthday!

[@80rosscoe]

I thought the Google search asking for a raised chart was interesting, but did they think to adjust those results for the percentage of people using Google as their main search engine as that may have changed?

[@jogrin]

13:03 CBs can also have their gold as collateral for deposits to earn interest

[@JohnSmith-ft4fz]

TOTALLY AGREE w/ high liklihood of other asset-trades being influenced by the manipulated presidential bets

[@meknizdceo701]

VALUABLE!

[@kevinnavarro2180]

Yes!!!

[@eh7599]

The best!

[@eh7599]

Great!

[@Henry.Nibler]

Using the same nasdaq chart, looking at 2021. PE multiples are the same as they were in 21. You can look at any variant of rilling period return data, and try to derive information from it, but returns do not have tight correlation with real performance.

[@Lamarche1959]

With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, l'm still at a crossroads deciding if to liquidate my $400k bond/stock portfolio.

[@Clancysoucie]

An uptick in volatility is not necessarily a bad thing, there are opportunities to be found even in this whirlwind. Best advice just get yourself a coach to guide you in this current market

[@AdamsFerguson]

Couldn’t agree more, I've been in constant touch with a financial analyst since covid . These days, it's really easy to buy into trending stock's, but the task is determining when to buy or sell. My advisor decides entry and exit commands on my portfolio, I've accrued over half a million from an initially stagnant reserve of $150K. Credits to my fa Abigail Ann Ryan.

[@GregMerchant]

That’s impressive! I need guidance so i can salvage my portfolio due to the massive dips and come up with better strategies. How can i reach this advisor?

[@SeanMcCarthy-u8s]

Im so sick of hearing about gold at 2700. Pays nothing.. where were people at 1k

[@garyrogers6977]

I was there.

[@paulbarnaby2430]

Was the US buying their own debt 60 years ago?

[@NgocDoan-k1q]

If I need to choose top 3 AI coins, my picks are FET, INJ and ALM (Alemio Network), not in that particular order

[@jaykraft9523]

It's a fascinating question. I thought 3 out of 4 of Josh's scenarios (B,C,D) all contribute to the yields movement. Jessica weighing in on the U.S. economic growth continuing as Josh said (C,D) scenario. Nick's only argument is debt is not causing problems. But the crazy deficits just occurred recently (last few years). He says basically "we're not near a problem". He cannot know that. And he didn't attempt to explain the rising yields, just what they weren't due to. Weaponization of the U.S. dollar causing moves to Gold is actually a 5th scenario E. (Jessica seems to be cherry picking to see what she says is a "normal" market. These PEs are not normal. Price-to-sales is not normal. The Buffet GDP Indicator is not normal. Tread carefully)

[@bostonfrank6739]

what do u mean recession is off the table? What about the Sahm rule? The yield curve inverted , then uninverted

[@Henry.Nibler]

They are just looking at one arbitrary graph and ignore everything you said.

[@CSARVA]

COSTCO customers ran the price up on Gold also!!!

[@fallen0509]

didn’t realize Jessica is packin!

[@dacruztrading]

"as long as corporate profits keep growing".... that's the problem....

[@Anonymint-vj7bt]

What about China selling and yield curve control selling long to lend short?

[@dominicn]

I'd like to see GDP layered on that 60 year chart

[@aaronsullivan1628]

Job creation has been mostly in the government sector, and the money spent to create those jobs was borrowed from other countries. How is that good?

[@80rosscoe]

What is that 3 yr rolling return chart going to look like once the bad '22 returns aren't in the rolling ave? Problem for another day I guess.

[@oneyedman443]

Nick and Jess!!! I got smarter the very second the alert came across and I saw the thumbnail.❤❤❤

[@NickColasandJessicaRabe]

Thank you!!

[@anthonygargano1861]

Banks will be forced to buy more bonds from the US government as well other large US financial institutions

[@SC5WMEDIA-v7o]

carry trade boom in plant and equipment lending the world is preparing for massive infrastructure growth. Risk premiums up because the size of lending is much much larger

[@AugustoLucarelli]

Finally!!!! Someone who can put some light on this stupid argument on the debt/deficit. The limit is in the real economy not in n the currency. Debt/GDP is meaningless is a fiat currency system. There is no solvency risk. The bond vigilantes operate in a gold standard mindset gone since 1971.

[@michaelwiebeck3]

The market trend can turn around very quickly. In fact, the indexes often switch from a bear market to a bull market when the news is at its worst and the mood of investors is at its lowest point. I read an article of people that grossed profits up to $150k during this crash, what are the best stocks to buy now or put on a watchlist?

[@agrippamarcus6533]

I wonder how the last two charts of S&P500 and Nasdaq 3-year return would change if you change from 3 to 4 or 5 years by incorporating the massive gains in 2020 and 2021, would that give a vastly different chart pattern?

[@lawrencesmith9059]

That 3 year rolling chart is meaningless without a context of price to earnings ratios and Treasury yields, M2 and the deficit, etc. People can cherry-pick data to make any point they want. The election makes a huge difference, as all market participants are operating under different assumptions based on the winner.

[@RigSMP100]

So Net net everything will be fine, if there’s no geopolitical shock, or external economic shock well it turns out that’s a big assumption Or to put it another way, the trend will remain in place until it is broken

[@Ronicus1]

Funds are selling treasuries to fund their short equity margin calls

[@SeanMcCarthy-u8s]

Interesting

[@hanzn6784]

16:24 "If money isn't going into treasuries where is it going to go?" bro you already answered your own question foreign central banks are buying gold instead of treasuries. Why would the continue to buy treasuries when the real rate of return is clearly negative (unless you believe the government lol)

[@mrzack888]

National debt is our savings. Its not a problem as long as usa economy and population continues to grow.

[@anthonygargano1861]

My personal opinion as to why gold and bitcoin are doing well is that in order to avoid an event with the debt it’s going to be more liquidity and to some degree money printing to inflate our way out of it I don’t think you’re looking for a black swan event. I think you’re looking at a long-term increase in liquidity and money printing to manage the debt and get that number back lower. That number was at 120% debt to GDP 85 years ago approximately after World War II and we inflated our way out of it over a period of about 6 to 7 years

[@jonathantaylor6926]

10 year needs to pay 6.5%.

[@sunlite9759]

Yeah, inflation is off the table and is now on the ceiling!

[@andrew_91]

🐐🐐🐐

[@HaThanhHoang-k7g]

What if I told you that Alemio Network will crush most of the top tier AI coins by the end of the year?

[@floydchusset3143]

Purchasing a stock may seem straightforward, but selecting the correct stock without a proven strategy can be exceedingly challenging. I've been working on expanding my $210K portfolio for a while, and my primary obstacle is the lack of clear entry and exit strategies. Any advice on this matter would be greatly appreciated.

[@grinjohnson6452]

The strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset/knowledge to pull such trades off

[@ryanthompson8256]

Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.

[@ashwinaditi1039]

Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.

[@hicrhodushicsalta6648]

Next debt ceiling date?

[@ijgdr9141]

This logic of the 3 yr rolling return is FLAWED and MISLEADING. You should do that same analysis on a real-return basis, corrected for inflation.

[@NickColasandJessicaRabe]

We've done that in our DataTrek Morning Briefing reports.

[@SSModi852]

Old man is knowledgeable

[@10000Islands]

There does not NEED to be a 'catalyst'. That is an erroneous assumption, and making that a foundation of your argument is specious.

[@andresheyn9100]

🎉🎉🎉🎉

[@kbkesq]

13:43 except Hezbollah gold reserves got blown to smithereens

[@christoschristou3641]

US$44 trillion of US bonds maturing over the coming years have anything to do with the rise in yields, borrowing costs on the rise and just who wants to buy bonds when US could and has already defaulted on its obligation?? Russia as an example. What are your thoughts?? Respect

[@waynewallace2061]

Greece had big problems @ 120% of GDP.

[@NickColasandJessicaRabe]

Greece doesn’t have the world’s reserve currency

[@oppenheim2]

I think the best indicator is what Buffett is doing.

[@beau6113]

the exact same thing he's been doing for the past 40 years?

[@logical-machine]

​@@beau6113No. He sold like half his portfolio, indicating that we're hitting a long term top.

[@midwestcannabis]

🥳🥳🥳✌️✌️✌️✌️

[@TheCompoundNews]

🥳

[@gg80108]

And just why did rates rise, never really came out of anyones mouth. One indicator is bound to be right.

[@sunoveristambul]

cool

[@Sween77]

Let’s all say “stagflation”.

[@stphkp889]

Underfed New Yorkers?😅