If you read a lot of Street research (especially of the macro variety) you know that in many cases you get to the end and are left wondering if the analyst actually said anything worth saying.
That’s not an attempt to belittle the analysis. It’s often quite good. It’s just that much like a lot of the social science research you’ll read in peer reviewed journals, it’s not always clear that all the math and mental acrobatics actually ends up telling us anything that wasn’t intuitive.
As far as macro research goes, the tie-breaker for me in those scenarios is usually whether the topic under discussion is something that’s being heavily debated by market participants. That is, if the topic is “top of mind” – so to speak – then any incremental information is probably worth highlighting.
So that’s the context for a Goldman note out Wednesday afternoon entitled “A Rough Awakening For Bond Bears” (why they went with “rough” there instead of “rude” is a mystery).
The note is about the rally in Treasurys and how we can try to understand it in the context of Japanese and German yields. Obviously this is something everyone is talking about now that 10Y yields in the US have come to proxy for “faith in reflation” (I mean, they always proxied for that, but now it’s not just rates and FX strategists talking about it).
So what I want to do here is present some excerpts below for you to consider with everything said above as the setup and allow you to determine for yourself whether Goldman said anything worth saying.
Via Goldman
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