In short: The 10-year at 5% is "potentially a line in the sand" and probably near the short-run peak in yield, with an institutional "market put" under it. Fundamentals say yields are already too high. Accumulate patiently: a 5-year at 5% held to maturity is "essentially a free option" — worst case you earn 5% a year, and if yields collapse to 2.5% you sell the bond and buy stocks on sale.
Lebowitz thinks US government bond yields have risen further than the economy justifies. When a bond's yield rises its price falls, so if yields later come down, today's buyers lock in a high income and get a price gain. His evidence: every inflation measure he trusts (core CPI 2.5%, the "trimmed mean" that throws out extreme price moves at about 2.3%, and the market's own inflation forecast at 2.4–2.5%) is right back where it was before the Iran war, and the economy is growing at only about a third of its normal pace.
So why are yields up? Stories: high oil, big deficits, tech giants borrowing heavily for AI, pricier memory chips, Japan possibly selling Treasuries, and a Fed that won't say what it will do. Stories can move a market for a while, but he expects prices to return to the fundamentals eventually. He sees the 10-year yield at 5% as a "line in the sand": pension funds and insurers love locking in 5% to match their long-term obligations, and if yields go that high the stock market is likely to wobble, which sends money back into bonds.
How he'd act: be patient and don't guess the top. For an individual, buy an actual 5- or 7-year Treasury and plan to hold it until it matures. The worst case is earning about 5% a year and getting your money back. If yields collapse and stocks fall, you can sell the bond at a profit and buy stocks cheaply — that is the "free option." For his own firm, which already owns bonds, he would rather add once the trend has clearly turned (say, at 4.5% and falling) than try to catch the exact peak.
24:33bonds. A — and you have essentially a free option. Let's say you buy a 5-year bond today at 5% for argument's sake, right? And you're comfortable. You know what? Worst case, I just hold it for five years. I get my money back and I've earned 5% every year for the last five years.
In short: "I'm definitely not a buyer of European debt at these levels and also not US debt." Have a significantly lower fixed-income allocation (~15% as a stabilizer) and take it in EM local-currency and corporate bonds instead. His mentor's post-it note — "scare your investors out of bonds" — is finally coming true: sticky inflation, unsustainable debt, and a French-vs-German spread showing "an enormous amount of distrust."
Blunt version: "I'm definitely not a buyer of European debt at these levels and also not US debt." He keeps only about 15% of the portfolio in bonds at all — as a shock absorber — and prefers emerging-market local-currency bonds and corporate debt over rich-world government paper.
The reasoning: inflation has stayed above target for years, government debt loads are unsustainable, and the way out historically is financial repression — keeping interest rates deliberately below inflation so the debt quietly shrinks in real terms, as in the 1940s. That is a slow, guaranteed loss for the bondholder. He expects capital controls and rules that funnel savings into government bonds whether savers want them or not.
He also thinks the plumbing is already breaking: the gap between French and German bond yields shows real distrust, and the Treasury's own attempt to calm the long end (bigger buybacks) arguably made things worse. His mentor's advice, on a post-it note for years, is finally playing out: "scare your investors out of bonds."
48:50But I'm definitely not a buyer of European debt at these levels and also not US debt. — Well, a couple of points there when you say gold allocation of 14 to 18%. How do you allocate that to gold? Is that owning physical gold either directly or via ETFs or is that also exposure to the miners and what you've called performance gold? — Yeah, well a great question Michelle.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.