All the relevant news that's fit to email

The thing about a government shutdown, of course temporarily averted, and why most roll their eyes about it, is because of the few guarantees in life, eventually reopening the government is one of them and soon after previous shutdowns. The bigger problem is the government monstrosity that has been created and the current worry about financing it. And higher interest rates for a while makes the situation worse in two ways, it certainly reprices maturing Treasury debt at a much higher level and it further slows the economy which slows tax receipts. My friend Barry Knapp at Ironsides Macro said as much in his weekend piece, "just how big will the deficit be if monetary policy reduces revenues further with spending on autopilot? Of course, if the economy does weaken sharply, it is likely that spending will increase further." 

And when you hear that foreigners have sharply reduced their percentage ownership of US Treasuries to the low 30% range from mid 40's% about 10 yrs ago, understand that this trend will continue, especially with the recent enlargement of the BRICS community which now numbers 11 countries. That includes, Brazil, Russia, India, China, South Africa, Saudi Arabia, Argentina, Egypt, Ethiopia, Iran and the UAE. As these countries combined produce almost half the world's crude oil and about 1/3 of the world's natural gas and with the ability now to transact in a currency not called the US dollar, there is a lot less foreign money being parked in US Treasuries. 

I read a great stat over the weekend from my friends at Quill Research where Danielle DiMartino Booth wrote in her weekly Feather about the coming challenge for high yield credits in a higher for longer world. Beginning in September 2005, the high yield maturity profile was about 8.5 years and it "fell to 6.49 in February 2009, 1.87 years of compression over a span of nearly 3 1/2 years. Since forward rates began rising in August 2021, HY's maturity profile has slid from 6.63 years to 4.96 years." Each day gets us closer to someone needing to refinance at a much higher rate than the rate on the loan that is maturing, I'll say for the umpteenth time. 

Speaking of oil, even with WTI now at $90ish, the US crude oil rig count fell by another 5 to just 502. That's the lowest since February 2022 and it's clear that OPEC+ is in firm control of the global oil situation (and the BRICS plus 6) as US shale seems to be a shrinking factor, notwithstanding record production but one that is seemingly about to falter with the continued rig count decline.