Throughout the seven year fiasco, Treasury bonds have priced in more and more deflation.Through debt downgrade, money printing, you name it, all they saw was a growing output gap.
Obama's capacity utilization is a 1970s era recession. And we also see the crater caused by 2008 aka. "The Big Short" Best Picture nominee...
We've never seen anything this asinine before...
Below, bonds are following the Elliot Straight down wave, as predicted by forward inflation expectations. Now colliding with Fed policy by Police Squad. In other words, for the first time in U.S. history, the long-bond yield is falling to meet Fed Funds at the zero bound...
Below, bonds are following the Elliot Straight down wave, as predicted by forward inflation expectations. Now colliding with Fed policy by Police Squad. In other words, for the first time in U.S. history, the long-bond yield is falling to meet Fed Funds at the zero bound...
Short-term rates are supposed to meet long-term rates, not the other way around...and here again we see the chasmic output gap...
Here is the 10 year one year spread (same scale):
T-bond price:
For stocks, the glass is half full of bullshit...
Unlike bonds, stocks viewed a widening output gap as 1) increased corporate profits 2) A lower discount rate aka. 0% which increased the value of future "growth".
Here is the 10 year one year spread (same scale):
T-bond price:
For stocks, the glass is half full of bullshit...
Unlike bonds, stocks viewed a widening output gap as 1) increased corporate profits 2) A lower discount rate aka. 0% which increased the value of future "growth".
In other words, for stock gamblers, growing poverty was "an opportunity".
Average stock with Fed rate:
