Author Archives: Edward Brownlee

This 10-year Treasury Yield

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The 10-year Treasury yield is closely watched as an indicator of broader investor confidence.

The U.S. Treasury 10-year note yield signals investor confidence in the overall economy and markets. Investors pay keen attention to movements in 10-year Treasury yields because they serve as a benchmark for other borrowing rates, such as mortgage rates. When the 10-year yield fluctuates, it can have significant implications across the financial landscape, according to Forbes.

The U.S. Treasury issues 10-year T-notes at a face value of $1,000, and a coupon specifying a certain amount of interest to be paid every six months. The notes are sold through auctions conducted by the Federal Reserve and yields are set through a bidding process. The notes can be resold to other investors in the secondary market.

Changes in the 10-year Treasury yield tell investors a great deal about the economic landscape and global market sentiment. Professional investors analyze patterns in 10-year Treasury yields and make predictions about how yields will move over time.

When confidence is high, prices for the 10-year drop and yields rise. This is because investors feel they can find higher-returning investments elsewhere and do not feel they need to play it safe. Thus, gains in yield signal global economic confidence

Declines in the 10-year Treasury yield generally indicate caution about global economic conditions.

  • BecauseTreasury securities are backed by the U.S. government, They securities are seen as a safer investment relative to stocks.
  • Bond prices and yields move in opposite directions—falling prices boost yields, while rising prices lower yields.
  • The 10-year yield is used as a proxy for mortgage rates. It’s also seen as a sign of investor sentiment about the economy.
  • A rising yield indicates falling demand for Treasury bonds, which means investors prefer higher-risk, higher-reward investments. A falling yield suggests the opposite.

The yield is the rate that people refer to when they’re talking about Treasuries. The coupon rate, while technically the interest rate you will receive in relation to the Treasury’s face value, will likely be different from the effective yield you end up getting. If you pay less than face value, your effective rate will be higher; more and it will be lower.

Prices (and therefore effective yields) change for bonds almost constantly. That’s because a bond’s price is inversely related to yield: When demand is high and Treasury prices rise, yields fall—conversely, when demand is low Treasury prices fall and yields rise.

Rising yields may signal that investors are looking for higher return investments but could also spook investors who fear that the rising rates could draw capital away from the stock market.

References:

  1. https://www.forbes.com/advisor/investing/10-year-treasury-yield/

Anti-Aging and Keeping Mitochondria Healthy

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Nicotinamide riboside — also called niagen — is a form of vitamin B3 that might be able to reverse signs of aging and might keep your mitochondria, the powerhouses of the cell, healthy.

One of the hallmarks of aging is a process known as “mitochondrial dysfunction”, a term that refers to our cells’ general loss in power and efficiency over time. It may be one of the reasons we age at all. Mitochondrial dysfunction occurs when your mitochondria lose the ability to function normally. It can happen if the mitochondria present in your cells are not functioning as they should. And if the mitochondria are at the heart of why we age, it makes sense to look at every possible way of keeping them functioning for as long as possible.

That’s one of the reasons why some of the world’s leading scientists are turning to nicotinamide riboside. This unique form of vitamin B3 shows the potential to affect mitochondrial health and in turn, many of the age-related problems associated with it.

Understanding the mitochondria.

Inside almost every cell are these tiny, strangely shaped organelles called mitochondria— “the powerhouses of the cell.” These mini-organs are responsible for producing 90% of the energy we need in our bodies. The mitochondria are the reason why we exist as the complex animals we are today, rather than bacteria.

We didn’t always know just how vital the mitochondria were to our health. One key way of keeping mitochondria healthy is a molecule known as NAD+ (nicotinamide adenine dinucleotide). Our cells naturally produce NAD+, and we use it constantly throughout the day.

We also know our NAD+ supply declines as we age. Once researchers realized NAD+ could be the key to keeping our cells healthy, they scrambled for a way to make more of it.

The beginning of the vitamin B3s.

Researchers already knew of two vitamins that began the chemical process to increase NAD+: niacin and nicotinamide. These were discovered in the 1930s and used to treat pellagra, a potentially deadly vitamin B3 deficiency disease.

Niacin would also go on to be a treatment for high cholesterol in the 1950s. However, people found that ingesting niacin in high doses sometimes resulted in an annoying skin flush that was both irritating and unsightly.

Nicotinamide didn’t cause the skin flush and could in theory provide a lot of the same benefits, but it inhibited the activation of important cellular repair promoting proteins known as sirtuins. Neither nicotinamide nor niacin were as effective as researchers were hoping they’d be.

Although these two vitamins were NAD+ precursors, they weren’t ideal solutions. With niacin’s negative side effects, and the relative effectiveness of nicotinamide, researchers still didn’t have a good enough vitamin supplement for increasing NAD+ levels.

The discovery of nicotinamide riboside.

Another vitamin B3 known as nicotinamide riboside was discovered in the 1940s in yeast. But it wasn’t until the early 2000s that scientists began to see the potential of this third form of vitamin B3 to not only increase NAD+ but also improve human health in general. In 2004, a Dartmouth College research team discovered that nicotinamide riboside, like its vitamin B3 brothers, was also a precursor to NAD+.

The team, led by Charles Brenner, PhD, found that nicotinamide riboside could increase NAD+ in mice and that those mice experienced a plethora of health benefits as a result.

The mice showed everything from improved blood sugar levels and cholesterol levels to reduced nerve damage, and resistance to weight gain. Dr. Charles Brenner found these results so inspiring, he took the next step to see what nicotinamide riboside could mean for human health.

In 2014, Dr. Charles Brenner became the first human to consume nicotinamide riboside as a supplement. The results were just as promising. This relatively unknown form of vitamin B3 significantly increased his NAD+ levels safely, quickly, and without any negative side effects.

Conclusion

Nicotinamide riboside (NR), also called niagen, is an alternative form of vitamin B3. NR is promoted as an anti-aging supplement because it is converted by your body into nicotinamide adenine dinucleotide (NAD+), a coenzyme or helper molecule, which is critical to cellular repair and the repair of damaged DNA, and which acts as fuel for many key biological processes, such as:

  • Converting food into energy
  • Repairing damaged DNA
  • Fortifying cells’ defense systems
  • Setting your body’s internal clock or circadian rhythm

“NAD+ is gradually lost as we get older or develop chronic diseases. Loss of NAD+ is linked to obesity and other negative lifestyle habits like smoking,” Christopher Martens, assistant professor of kinesiology and applied physiology and director of the Delaware Center for Cognitive Aging Research said. “Because more NAD+ is needed to counteract those negative consequences, it’s more likely to be depleted in the face of negative lifestyle habits.”

References:

  1. https://www.truniagen.com/blog/our-ingredient/is-nicotinamide-riboside-really-an-anti-aging-supplement/
  2. https://www.truniagen.com/blog/science-101/mitochondria-the-powerhouse-of-the-cell/
  3. https://www.healthline.com/nutrition/nicotinamide-riboside
  4. https://neurosciencenews.com/nicotinamide-riboside-alzheimers-22550/

Longevity and Healthy Aging

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Aging, the world’s leading cause of death, is responsible for over two-thirds of deaths globally—more than 100,000 people every day. ~ Wired Magazine

The chief risk factor for most of the modern world’s leading killers is the aging process: Cancer, heart disease, dementia, and many more health problems become radically more common as people get older, according to Wired Magazine.

It’s common knowledge that factors such as smoking, lack of exercise, and poor diet can increase the risk of chronic diseases, but these are relatively minor compared to aging. For instance, having high blood pressure doubles your risk of having a heart attack; being 80 rather than 40 years old multiplies your risk by ten. As the global population ages, the magnitude of death and suffering caused by aging will only increase.

The goal of longevity and healthy aging is to slow down the hands of the biological aging clock with specific interventions and, in some cases, to reverse the biological aging clock.

Biological age is different from chronological age. It is a measure of the body’s ageing, based on the effectiveness of the mechanisms that keep cells young and on markers of the functionality of organs and apparatus.

There are epigenetic mechanisms that can repair DNA damage, increase longevity and reduce the risk of disease.

Studies conducted in recent years in the field of the biology of aging and longevity suggest that we can reach an advanced chronological age without getting old biologically.  We can age chronically without losing our physical and cognitive abilities, maintaining our current level of performance and, perhaps, recovering what we have lost.

References:

  1. https://solongevity.com/en/longevity-news/biological-age-is-not-based-on-years/
  2. https://www.wired.com/story/drugs-aging-medicine-biotech/

Cryptocurrency are Frauds

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Almost a quarter of new cryptocurrencies launched in 2022 exhibited characteristics of “pump and dumps”—a form of fraud—according to new analysis from blockchain intelligence group Chainalysis.

Pump and dump tactics have a long history in the stock market, where they are a form of securities fraud.

In “pump and dump”, investors will hold a stock and promote it to pump the price, and then dump it at inflated levels on unsuspecting investors who buy in on the hype before it all comes crashing down.

This is a classic example of the “The Greater Fool Theory”.

References:

Benchmark 10-year Treasury Yield

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Short term US Treasury yields reached their highest level since July 2007 last week, after new official data revealed the US economy is still coming in hot, reports Forbes Magazine.

The benchmark 10-year Treasury yield climbed to 3.87%, while the 2-year rate advanced to 4.669%. The one-year Treasury yields briefly hit 5%. The last time the it hit those levels was July 2007.

High yields affect the price of bonds, which are considered to be the ultimate safe investment. They’ve been sensitive to the new data on the US economy’s health, which isn’t behaving as the Fed expected.

The ten-year Treasury yields, which many use as a benchmark for the economy, hit their highest level since December 30.

Treasury yields are kind of a big deal. They influence how much it costs the US Government to borrow money, how much interest bond investors will get and the interest rates everyone pays on loans.

And the 10-year Treasury yield is the jewel in the crown. It’s used to measure mortgage rates and confidence in the market. If the yields are higher here, it could grind the housing market to even more of a halt.

  • Treasury yields hit new highs in February, with 10-year yields hitting 3.86% and two-year reaching 4.6%
  • The highs come after data on labor and prices showed the US economy still had a long way to go to get inflation down
  • 10-year vs. 2-year bond yields are currently in an inverted curve, which historically has predicted a future recession

An inverted yield curve happens when the shorter-term yields have higher returns than the long-term yields. An inverted curve has historically meant a recession is on the way, and that can be enough to scare off banks from lending.

Investors are worried that stubborn inflation will lead the Federal Reserve to keep raising rates and to keep rates higher for longer — which could tip the economy into a recession.

References:

  1. https://www.forbes.com/sites/qai/2023/02/20/treasury-yields-hit-new-heights-is-inflation-set-to-stick-around/amp/

National Debt and Federal Spending

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Higher taxes, alone, are not the solution to out-of-control federal government spending. Americans need to understand and address the problem.  And, they need to convince politicians and bureaucrats to end their unfettered spending habits.

The national debt enables the federal government to pay for federal programs and services even if it does not have funds immediately available. Increased in federal government spending further increases the deficit.

The federal government spends money on a variety of goods, programs, and services to support the American public and pay interest incurred from borrowing.

  • If the government spends more than it collects in revenue, then there is a budget deficit.
  • If the government spends less than it collects in revenue, there is a budget surplus.

From FY 2019 to FY 2021, spending increased by about 50%, largely due to the COVID-19 pandemic. In fiscal year (FY) 2022, the government spent $6.27 trillion, which was more than it collected (revenue), resulting in a deficit.


Federal government spending pays for everything from Social Security and Medicare to military equipment, highway maintenance, building construction, research, and education. This spending can be broken down into two primary categories: mandatory and discretionary. These purchases can also be classified by object classand budget functions.

Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt.

References:

  1. https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/
  2. https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/

The 10-Year Treasury Bond Yield

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The 10-year Treasury bond yield is closely watched as an economic indicator of broader investor confidence.

An economic indicator is a piece of economic data, usually of macroeconomic scale, that is used by analysts to interpret current or future investment possibilities, according to Investipedia. .

This 10-year bond signals investor confidence. The U.S Treasury sells bonds via auction and yields are set through a bidding process.5 When confidence is high, prices for the 10-year drop and yields rise. This is because investors feel they can find higher-returning investments elsewhere and do not feel they need to play it safe.

But when confidence is low, bond prices rise and yields fall, as there is more demand for this safe investment.

This confidence factor is also felt outside of the U.S. The geopolitical situations of other countries can affect U.S. government bond prices, as the U.S. is seen as safe haven for capital.

  • BecauseTreasury securities are backed by the U.S. government, They securities are seen as a safer investment relative to stocks.
  • Bond prices and yields move in opposite directions—falling prices boost yields, while rising prices lower yields.
  • The 10-year yield is used as a proxy for mortgage rates. It’s also seen as a sign of investor sentiment about the economy.
  • A rising yield indicates falling demand for Treasury bonds, which means investors prefer higher-risk, higher-reward investments. A falling yield suggests the opposite.

Changes in the 10-year Treasury yield tell long-term investors a great deal about the economic landscape and global market sentiment. Professional investors analyze patterns in 10-year Treasury yields and make predictions about how yields will move over time.

Declines in the 10-year Treasury yield generally indicate caution about global economic conditions while gains signal global economic confidence.

Prices (and therefore effective yields) change for bonds almost constantly. That’s because a bond’s price is inversely related to yield: When demand is high and Treasury prices rise, yields fall—conversely, when demand is low Treasury prices fall and yields rise. This ebb and flow ultimately creates the Treasury pricing market as people flock to (and then from) Treasuries based on the economic environment they find themselves in.

It’s important to remember, all U.S. Treasury securities are regarded as risk free—since they’re backed by the full faith and credit of the United States government, which has never defaulted on its debts.

When investors get worried about the economy and market risk, they look for safe investments that preserve capital, and Treasuries are among the safest investments out there.

One of the foundational principles of finance is that risk and return are correlated. When markets are booming and the economy is expanding, the appetite to take on risk and generate returns is high. Risk-free Treasuries become much less appealing because of their lower returns. Demand declines and Treasury notes sell at less than their face value.

References:

  1. https://www.forbes.com/advisor/investing/10-year-treasury-yield/

Hot PPI in January 2023

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Inflation at the wholesale level, measured by the Producer Price Index (PPI), rose more than expected in January 2023. 

The U.S. Labor Department reported that its producer price index, which measures inflation at the wholesale level before it reaches consumers, came in hotter than expected and rose 0.7% in January from the previous month. On an annual basis, prices are up 6%. In short, PPI is reflects intrinsically the prices consumers will be paying for goods and services in the near future.

Those figures were both higher than the 5.4% headline figure and 0.4% monthly increase in forecast by Refinitiv economists, a worrisome sign for the hawkish Federal Reserve as it seeks to cool inflationary price gains and tame consumer demand with the most aggressive interest rate hike campaign since the 1980s.

Excluding food and energy, core inflation increased 0.1% for the month – matching the estimate from economists.

Stubborn inflation has caused more Americans to live paycheck to paycheck despite 5.1% increase in wages, reports Fox Business. Increased wages are not keeping pace with soaring prices of consumer goods and services, prompting many Americans to live paycheck to paycheck.

References:

  1. https://www.foxbusiness.com/economy/wholesale-inflation-surges-january-more-expected-high-prices-persist

Half of Americans Say They Are Worse Off – Gallup

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According to a new Gallup poll, 50% of Americans say they are worse off than a year ago, compared to only 35% who say better.

When Americans take the time to reflect on their personal financial situations compared to a year ago:

  • 35% of Americans say they are better off now than they were a year ago,
  • 50% of Americans say they are worse off now than they were a year ago
  • 14% of Americans say that their finances are  “the same” as last year.

(Per Gallup: Lower-income is defined as having an annual household income less than $40,000. Middle-income is defined as having an annual household income between $40,000 and $99,999. Upper-income is defined as having an annual household income of $100,000 or more.)

These financial self-assessments are the worst since Great Recession era and since Gallup first asked this question in 1976. It has been rare for half or more of Americans to say they are worse off, states Gallup’s Jeffrey M. Jone . The only other times this occurred was during the Great Recession era in 2008 and 2009.

Gallup regularly tracks Americans’ ratings of their personal financial situation as getting better or worse, as well as their views on whether the economy is getting better or worse.

Currently, more than four in five U.S. adults rate economic conditions in the country as only fair (38%) or poor (45%), with few describing conditions as excellent (2%) or good (15%). Furthermore, 72% of Americans say the economy is getting worse, 22% say it is improving, and 4% think it is staying the same.

The results are based on a January 2-22 Gallup poll. They follow a year of persistent high inflation, with the highest inflation rates since 1982. Stock market values declined and interest rates rose in 2022, but, on average, personal wages have increased.

In both 2021 and 2022, Americans were evenly divided between saying they were better off versus worse off, including a 41% to 41% split in last year’s survey.

High inflation and other challenging economic factors have not dampened Americans’ expectations about their financial situations in the year ahead. Sixty percent expect to be better off a year from now, while 28% predict they will be worse off.

High inflation, rising interest rates, and declining stock values in 2022 all likely took their toll on Americans’ financial situations, with half saying their situation got worse in the past year, Jones writes.  Lower-income Americans, who have consistently been most likely to report that higher prices are causing them financial hardship, are particularly inclined to say they are financially worse off.

References:

  1. https://news.gallup.com/poll/469898/half-say-worse-off-highest-2009.aspx
  2. https://news.gallup.com/poll/468983/cite-gov-top-problem-inflation-ranks-second.aspx

Building Wealth ‘One Brick at a Time’

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“Rome wasn’t built in a day, but they were laying bricks every hour.” – James Clear

Laying bricks systematically to build a city works similarly well for building wealth. Building wealth is a slow systematic process of investing over the long term and compounding returns over time for most savers and investors. Successfully building wealth is not an overnight success.

“Goals are good for setting a direction, but systems [habits] are best for making progress.” ~ James Clear