Thursday, December 4, 2008

Inverted Yield Curve -- take two ....maybe

at the end of September I wrote a post titled 'Inverted Yield Curve', which was arguably one of the most poorly conceived posts I've ever written. spreads between shorter and longer term Treasuries just continued to widened to the point that the 30/2 ratio has recently approached the highs of 2003.



and here's a close up of the last couple months:



if that's not a potential top - short term at least - I don't Know what is. the yield on the Two Year is already down to .87%. I mean, how much lower can they push it? well to Zero, obviously. negative even. you thought there was panic with T-Bills yielding nothing, just wait!

but in the immediate future? a proper unfolding of the plot makes for a good novel and it's not cool to compress all the climatic scenes too close together. so maybe we should look for a chapter or two of character development before the action heats back up.

but new highs on that ratio would make things damn interesting. we can't ignore the possibility that our novelist might throw convention out the window and just pump this fucker dry*. so yeah the chart. keep yer eyes on the chart.

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*Trend & Value: Mixed Metaphors for a Mixed Economy!

God this post sucks.