Dr. Rhesus Mail Bag

Recently, I received a letter from a subscriber in Fort Myers Beach, Florida. She writes that her stepson’s friends thinks she is hot. She reads my Secret Algo findings while sunbathing in the backyard. However, her neighbors who spy on her can also read your tips and front-run my trades, since I must hose off the baby oil before I can log in. What is your view on interest rates?

Fine reader: There is no way to verify your story without pictures.

Second: The Dr Rhesus Secret Algo was constructed exactly to answer questions such as yours. The Secret Algo, as I am sure you are aware, not only incorporates financial and economic data but also factors in geopolitical and geostrategic data.

Our findings have unveiled a new wrinkle to the interest rate outlook. We all know there is a concerted effort from the Administration to wish interest rates lower. Even the Fed, who theoretically shouldn’t be a bunch of lackeys, will probably lower front-end rates at least once or twice more.

What will this accomplish? Keep in mind stocks are at highs, inflation is 3%(+), and employment is within a 7-iron of full employment. So our expectation is the curve will steepen, ten year yields will go back to the 4.55-5% range. Clearly not the intended effect.

You know what is coming?

QE!! And I don’t mean the ocean liner.

Under the guise of keeping the treasury market “stable” the Fed will soon embark on yield curve suppression. Maybe before mid-terms to show it’s “fighting for affordability” or some other jingo-istic gibberish.

The Dr Rhesus Secret Algo, by incorporating geopolitical as well as financial and economic data, is therefore measurably more predictive and useful.

Does this mean Dr Rhesus Secret Algo is recommending the ten year at 4.15% in the expectation the Fed will soon show a 3% net bid? In the words of a famous kamikaze pilot, Are You FuKKin kidding me? Not at all.

The Dr Rhesus Secret Algo recently published advanced fixed-income alpha generation to outperform this scenario.