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RT-er's,
I am not ruling out a recession, but their may be other reasons as to why
the yield curve has inverted. A decent contributor to this particular
occurrence seems to be supply. The treasuries buy back program is
inadequate and the plan seems to have let fixed income players know that the
treasury has no credible way of dealing with the supply issue. The Fed's
clarification of their bias statement did nothing to quell fears of them
falling "behind the curve" either. The increase in the 10y t-note
volatility could be a confirmation of this point. The flattening could be
entirely explained away by these issues. I personally don't buy into
inflation, but the stock market and oil is getting harder and harder to
ignore. Of course, only time will tell what is really going on.
Trade Well
> RTs:
| >
| > I have a note from several years ago that states "when IRX > ITX there
is
| > always a recession, and there has never been a false signal. I have no
| idea
| > of the truth of this statement, but it was just discussed as credible
on
| > CNBC. I agnostic on this subject, but curious how index and option
traders
| > might consider this.
| >
| > Regards,
| >
| > Michael
| >
|