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Bonds keep rising and long yields keep falling. Forgetting the patterns for a moment, either one of two things are occurring. Either we are going to see a flat - possibly inverted - yield curve at a level of historic lows for interest rates (which means a recession and sharp equity market sell-off is coming), or some huge force (we won't mention names) is monetizing our nation's debt, buying Bonds clandestine, in order to keep long interest rates artificially low to support an ongoing real estate bubble. The Maestro confessed to Congress this week he'd finally figured out the "conundrum" in Bonds. He blamed it on global deflation from an expanding world workforce, but don't rule out the possibility that privately he uncovered the shifty-eyed, coke-bottled bespectacled rogue bureaucrat who's been adding Treasuries to the Fed's portfolio from a lonely terminal off some side street on a mosquito infested discreet island. In any case, we aren't going to have robust economic growth and a flying equity market with long-term interest rates under 4.00 percent, regardless of how phony the official economic numbers become to the contrary. If price action is legit, it could be a sign that smart money is fleeing.
Bonds keep rising and long yields keep falling. Forgetting the patterns for a moment, either one of two things are occurring. Either we are going to see a flat - possibly inverted - yield curve at a level of historic lows for interest rates (which means a recession and sharp equity market sell-off is coming), or some huge force (we won't mention names) is monetizing our nation's debt, buying Bonds clandestine, in order to keep long interest rates artificially low to support an ongoing real estate bubble. The Maestro confessed to Congress this week he'd finally figured out the "conundrum" in Bonds. He blamed it on global deflation from an expanding world workforce, but don't rule out the possibility that privately he uncovered the shifty-eyed, coke-bottled bespectacled rogue bureaucrat who's been adding Treasuries to the Fed's portfolio from a lonely terminal off some side street on a mosquito infested discreet island. In any case, we aren't going to have robust economic growth and a flying equity market with long-term interest rates under 4.00 percent, regardless of how phony the official economic numbers become to the contrary. If price action is legit, it could be a sign that smart money is fleeing.
