Some Strong Support for Barry from Studies

There is very strong support for the yield curve association, and I’ll link to some sources below.  Barry’s analysis is more carefully qualified than that of most of the talking heads on CNBC.  Until now, I have always believed in the yield curve as an indicator, and I well know the peril in asking whether "this time is different."  That is where the causal modeling comes in. To review, here is the initial post:

Link: Inverted Yield Curve: Its different this time (not).

The yield curve, as measured by the ratio between the 10 and 2 year treasuries, is merely a few ticks away from inverting. This is something worth paying close attention to. What’s the significance of an Inversion? It reflects a decreasing demand for …

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More Overreaction in Energy Stocks

The higher volatility in these stocks makes no sense, but it comes with the territory.  Here’s the story, and I’ll explain more below.

Link: Energy ETFs Leak Oil.

Bloomberg reports that Crude oil fell on expectations that milder temperatures in the U.S. will help preserve stockpiles of winter heating fuels that are above average levels. Warmer weather is forecast for most of the U.S., with temperatures in…

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Thinking clearly about the yield curve

Barry is like the farmer who thought the sun would no longer rise after his rooster died. He has observed a correlation and has inferred causation. The yield curve is an indicator of something, not a cause. Ask yourself this question: Would U.S. economic prospects be higher if Asian banks were less willing to buy our bonds?

Barry is like the farmer who thought the sun would no longer rise after his rooster died.  He has observed a correlation and has inferred causation.  The yield curve is an indicator of something, not a cause.  Ask yourself this question:  Would U.S. economic prospects be higher if Asian banks were less willing to buy our bonds?

I’ll give a more complete explanation, but first look at the complete article.

Link: Inverted Yield Curve: Its different this time (not).

The yield curve, as measured by the ratio between the 10 and 2 year treasuries, is merely a few ticks away from inverting. This is something worth paying close attention to. What’s the significance of an Inversion? It reflects a decreasing demand for …

Continue reading “Thinking clearly about the yield curve”