AI
Wednesday, November 08, 2006 1:36:38 PM
Buying puts deemed illegal,shorting un-American,Vix negative
(12:45 Robojam on zero volume- when will the insanity stop??)
Yield Curve Remains Inverted
http://www.prudentbear.com/bearschat/bbs_read.asp?mid=
454373&tid=454373&fid=1&start=1&sr=1&sb=1&snsa=A#M454373
NEW 11/8/2006 11:43:56 AM
Post Your Reply
The 2 year treasury yield is 4.77 percent, compared to the 10 year yield of 4.66 percent yield.
Meanwhile, the yields on the 3-month and 6-month treasuries remain at more than five percent.
Okay. I know that Greenspan and Bernanke have both said that "this time it's different" and that an inverted yield curve this time may not presage a recession, despite what history tells us.
But, fact is, the yield curve has now been inverted for so many months that it may be time to pay attention to the historical evidence that an inverted yield curve is a precursor to a recession.
Greenspan, speaking on the rubber chicken circuit, is saying that the low yields on the long bonds can't last forever and that there WILL BE a turning point. Mind you, he admits he has zero clue about when that turning point will occur.
My guess is that the so-called turning point will happen when foreign central bankers finally get sick and tired of buying low-yielding U.S. debt in order to prop up the greenback and keep Americans consuming exports from foreign countries.
After all, in the past half-dozen years, the greenback has declined about 40 percent or so against the currencies of almost all industrialized countries.
On top of that, it seems ridiculous to buy long-term U.S. treasuries which have lower yields than the real rate of inflation.
How long can this go on???????
RE: "How long can this go on???????" rasputin
NEW 11/8/2006 11:52:52 AM
Post Your Reply
Sadly, perhaps DECADES longer.
I mean, think about it. (And this is the challenge I always throw out at the "imminent delfation" crowd.) Who here thought that the U.S. could continue to run up:
1. $500 billion (plus) yearly federal budget deficits?
2. $600 billion yearly trade deficits (now at $900 billion)
3. $1 trillion dollars per year in mortgage debt?
4. $4 trillion in total debt?
I have been screaming about the situation since 1980, when the U. S. TOTAL federal debt hit a measly ONE TRILLION DOLLARS and total U.S. debt was at only FOUR TRILLION DOLLARS!!! Fast forward to twenty-six years later and we are now at FORTY-THREE TRILLION DOLLLARS in total debt and still counting.
My point is that every time I think "This can't go on", it does.
Sheesh, a guy could grow old waiting for the thing to collapse. And even then, it will just be reset.
(12:45 Robojam on zero volume- when will the insanity stop??)
Yield Curve Remains Inverted
http://www.prudentbear.com/bearschat/bbs_read.asp?mid=
454373&tid=454373&fid=1&start=1&sr=1&sb=1&snsa=A#M454373
NEW 11/8/2006 11:43:56 AM
Post Your Reply
The 2 year treasury yield is 4.77 percent, compared to the 10 year yield of 4.66 percent yield.
Meanwhile, the yields on the 3-month and 6-month treasuries remain at more than five percent.
Okay. I know that Greenspan and Bernanke have both said that "this time it's different" and that an inverted yield curve this time may not presage a recession, despite what history tells us.
But, fact is, the yield curve has now been inverted for so many months that it may be time to pay attention to the historical evidence that an inverted yield curve is a precursor to a recession.
Greenspan, speaking on the rubber chicken circuit, is saying that the low yields on the long bonds can't last forever and that there WILL BE a turning point. Mind you, he admits he has zero clue about when that turning point will occur.
My guess is that the so-called turning point will happen when foreign central bankers finally get sick and tired of buying low-yielding U.S. debt in order to prop up the greenback and keep Americans consuming exports from foreign countries.
After all, in the past half-dozen years, the greenback has declined about 40 percent or so against the currencies of almost all industrialized countries.
On top of that, it seems ridiculous to buy long-term U.S. treasuries which have lower yields than the real rate of inflation.
How long can this go on???????
RE: "How long can this go on???????" rasputin
NEW 11/8/2006 11:52:52 AM
Post Your Reply
Sadly, perhaps DECADES longer.
I mean, think about it. (And this is the challenge I always throw out at the "imminent delfation" crowd.) Who here thought that the U.S. could continue to run up:
1. $500 billion (plus) yearly federal budget deficits?
2. $600 billion yearly trade deficits (now at $900 billion)
3. $1 trillion dollars per year in mortgage debt?
4. $4 trillion in total debt?
I have been screaming about the situation since 1980, when the U. S. TOTAL federal debt hit a measly ONE TRILLION DOLLARS and total U.S. debt was at only FOUR TRILLION DOLLARS!!! Fast forward to twenty-six years later and we are now at FORTY-THREE TRILLION DOLLLARS in total debt and still counting.
My point is that every time I think "This can't go on", it does.
Sheesh, a guy could grow old waiting for the thing to collapse. And even then, it will just be reset.
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