AI
Sunday, December 03, 2006 7:41:41 PM
Commented on Inverted Yield Curve on 11/20 as shown on this link http://www.trend-signals.com/Comments/2006/2006NOV.htm
As shown on the IYC chart, Bond market was telegraphing weaker economy than financial market was projecting. I have commented on this during the last several months including projecting "Stoping Rate hike" in Aug 06 Fed meeting. But as we see, even after the recent rally, it seems that it is better to go through normal economic cycle which is a moderate recession than pretending we are in brand new economic cycle with "soft landing" scenario.
My view, now, is that "recession" in normal economic cycle is a good thing instead of creating bubbles.
As you said, we could see a rate cut on Dec 12 fed meeting as Bond market has already priced in.
As you can see, 10y broke lower uptrend line but at a support.
As shown on the IYC chart, Bond market was telegraphing weaker economy than financial market was projecting. I have commented on this during the last several months including projecting "Stoping Rate hike" in Aug 06 Fed meeting. But as we see, even after the recent rally, it seems that it is better to go through normal economic cycle which is a moderate recession than pretending we are in brand new economic cycle with "soft landing" scenario.
My view, now, is that "recession" in normal economic cycle is a good thing instead of creating bubbles.
As you said, we could see a rate cut on Dec 12 fed meeting as Bond market has already priced in.
As you can see, 10y broke lower uptrend line but at a support.
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