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Friday, February 19, 2010 6:45:15 PM
CHART OF THE DAY: Wall Street's Gravy Train Is About To Hit A Brick Wall
Joe Weisenthal and Kamelia Angelova | Feb. 19, 2010, 3:15 PM
The major banks are loving the uber-steep yield curve that allows them to borrow money on the cheap, and then lend it back to the government at a fat yield.
Well, that's just about over. Bernanke has signalled the beginning of the rate-hike cycle (driving up the cost of short-term borrowing) and as this historical chart of the 2year-10-year yield spread (via Waverly Advisors) indicates, the curve just can't get any steeper.
In fact if history is any guide, it's about to collapse big time.
Joe Weisenthal and Kamelia Angelova | Feb. 19, 2010, 3:15 PM
The major banks are loving the uber-steep yield curve that allows them to borrow money on the cheap, and then lend it back to the government at a fat yield.
Well, that's just about over. Bernanke has signalled the beginning of the rate-hike cycle (driving up the cost of short-term borrowing) and as this historical chart of the 2year-10-year yield spread (via Waverly Advisors) indicates, the curve just can't get any steeper.
In fact if history is any guide, it's about to collapse big time.
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