Medellín, Colombia
Dear Diary,
This is the first time we’ve been in Colombia.
Greener, more mountainous, richer, newer, and more flowery – it is many things we didn’t expect.
We’ve seen a lot of press on Medellín. It is supposed to be lively. It is “springtime all year round.” It is beautiful. And it is a lot safer now than when drug kingpin Pablo Escobar called it home.
We haven’t been here long enough to know if those things are true. All we know so far is that it is so modern, so big, and so wealthy that we are a bit disappointed.
We’d expected a bit more charm and authentic poverty. Maybe they are on the other side of town… we don’t know.
We’ll let you know if we find out anything more…
Addicted to Debt
Yesterday, U.S. stocks continued their climb, with a 26-point step-up to yet another all-time high for the DOW (DIA).
Treasurys, meanwhile, continued to sell off. The yield on the 10-year T-note (TNX) – which moves in the opposite direction to prices – rose 8 basis points to 2.2%.
This follows last week’s turbulent action in the bond market, which saw Treasury yields hit a six-month high.
We have our eye on the U.S. bond market. Prices have been going up – and yields have been going down – for 32 years.
And as prices have risen to the highest levels ever recorded, so has the amount of debt.
It is as though the world couldn’t get enough of the stuff. It got to be like heroin: The more debt the world took on, the more it wanted… and the bigger the dose it needed to get a buzz on.
But after the 2008 credit crisis, it is as though the major developed economies are immune to the stuff.
The Fed, the Bank of England, the Bank of Japan, and now the European Central Bank, have been buying it on the street corners. In the largest quantities ever.
But nothing much happens. At least, not in the real economy.
