What Bonds, Oil & Gold Are Telling Us | Michael Lebowitz

**SPEAKER_1** (0:01)
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**Adam Taggart** (0:27)
And we should be live. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Taggart. Welcome you here for another session with the great Michael Lebowitz. Michael is Lance Roberts' partner in crime over there in RAA.
Michael, thank you so much for joining us today. How are you doing? Good.

**Michael Lebowitz** (0:46)
Thank you for putting great into my title. I like it.

**Adam Taggart** (0:51)
Well, we got to distinguish you from Lance. That's a pretty easy way to distinguish you from Lance. We've got the only so-so okay, Lance and then the great Lebowitz.

**Michael Lebowitz** (0:59)
The okay Lance, the great and wonderful and magnificent Mr. Lebowitz.

**Adam Taggart** (1:04)
Got it. Exactly. A couple of things, Michael. I owe you a debt of gratitude here because I called you to do this, I texted you to see if you could do this. Late last night, we had a last-minute cancellation and you were extremely gracious to say, yes, I'll jump in and talk about this. Thank you for doing that.
Secondly, I have to name these things before they go live.
When we talked last night, I said we talk about bonds, which we're going to do, but I also named it what bonds, oil, and gold are telling us. I hope you can also help talk to those other two topics a little bit later in the conversation.

**Michael Lebowitz** (1:45)
They're all the same story, so one story tells all.

**Adam Taggart** (1:49)
Okay, great. But we'll start off with the bonds side of things. So I guess we'll get to bonds in just a second, but let me just ask you at a very high level, Michael, if you had to pick a word or a phrase, how would you categorize the markets right now as you see them?

**Michael Lebowitz** (2:09)
Complacently optimistic.
I don't know if you can really put those two words together, but I feel like it is complacent in that the price of oil will kind of stay range bound. The Iranian conflict will stay range bound between escalation and de-escalation, but not exploding one way. And with it, the market seems to just be very stable at the surface. Very different underneath, but stable at the surface.

**Adam Taggart** (2:39)
Okay. So sort of like a duck, huh?
Very calm and stable on the surface, but something furious going on underneath.

**Michael Lebowitz** (2:47)
Exactly. That's a great way to describe it. A duck. My duck theory.

**Adam Taggart** (2:51)
Okay.
All right. So I spend a lot more time on this channel talking about stocks than bonds. But I do try to check in with Lance at least every week briefly about what the bond market is telling us. So I'd like to do a deeper dive here today with you. So Mike, I guess let's start anyway you like. I'm letting you know that I did get the slides you sent me. I'm loading them into the system now. So just tell me whenever you want them brought up.

**Michael Lebowitz** (3:23)
Why don't we start there? Because the question that is asked of me three, four, five times a week, what's happening with bonds or where are bonds going? It's usually phrased one of those two ways. My answer to where bonds go in, I go, if you tell me where the price of oil is going, I'll tell you where the price of bonds are going.
The graphs up, Adam?

**Adam Taggart** (3:51)
They are processing, so I'll tell you as soon as they're ready. Okay.

**Michael Lebowitz** (3:57)
I know the first graph we had a problem with.
Let me know when that comes up. What it's going to show you is the correlation of crude oil with five-year yields, and it goes back to 2019 It's a volatile graph. The correlation is generally positive by it's roughly 0.20. See the-

**Adam Taggart** (4:19)
All right.

**Michael Lebowitz** (4:19)
Yeah.

**Adam Taggart** (4:19)
It seems like we're getting the same issue there, Michael. I'm sorry about that.

**Michael Lebowitz** (4:22)
Okay. What you would see is not an orange line, but a blue line.
It's weird that it's doing that. A blue line that's very volatile, and it whips around between typically plus 35 and minus 15 correlation. Sometimes there's a decent correlation with yields and oil prices. A lot of times, it's negligible, hovering near zero. Right now, it's over 50 percent. That's the highest it's been, except for a very brief moment during March of 2020 when oil was trading negative and bond yields were plummeting.