The US yield curve is getting flatter by the day. Very soon, it will be discussed on all of your lovely financial news channels and you’ll be panicked into selling your bank stocks because of MUH recession. I know, the economy is chugging along at a brisk 3% pace; but all of this enthusiasm can quickly grind to a halt once Trump’s tax plans are tossed into the ocean.
Bank stocks have rolled over.
The yield curve is 68bps and heading lower.
TROUBLE AHEAD? US yield curve continues to flatten. 2s/10s yield spread drops to 0.68%, lowest since 2007. pic.twitter.com/LmdraTUEdx
— Holger Zschaepitz (@Schuldensuehner) November 8, 2017
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Last week
yield curve the lowest since Nov 2007… 5s30s spread drop most since Dec 2016
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/01/20171103_eod18_0.jpg
2s30s crashed most this week since Brexit
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/01/20171103_eod19_0.jpg
Again this week
With the yield curve crashing through 80bps – flattest since Nov 2007… This is the 8th day in a row of flattening – the longest streak in two years
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/04/20171106_EOD7.jpg
“magically” the xlf is up over 10% the last 2 months
I’ve been watching this, too. Quite remarkable give the constant ATHs. Still, we’ll nee a catalyst before heading down.
I assume that the Republcans lose-lose-lose tax bill will set the stage.
Do they:
1) Pass a tax cut that 70% of Ameicans think will favor the rich, lose the support of the lower- and middle-class (Donald Trump) Republicans, and then get crushed in 2018?
2) Pass a tax bill that massively increases the deficit, lose the support of the Tea Party and other fiscal conservatives, then get crushed in 2018?
3) Fail to pass a tax cut, lose the suppprt of the majority of Republicans, and then get crushed in 2018?
2) Work with Democrats on *actual* tax reform, lose support of wealthy Republican donors, and then get crushed in 2018?
Of course those options are not mutually exclusive.
Any tax bill, no matter which party authors it, will dishonestly increase taxes through the mechanism of increased deficit spending and the inflation that it causes. The inflation tax will be paid disproportionately by the relatively poor who do not own financial assets and properties …assets which by their very nature tend to keep pace with inflation.
Idiot Bush, Obama, Trump …makes little difference as to who wins on taxes.
Your analysis is too predictable at this stage of the bull market. Expect no more than a 5% correction. That’s all you’ll get before my brethren add to their core positions.
Dunkirk soundtracks are throw-aways, they are movements that did not make the final cut into Zimmer’s Inception:
https://tinyurl.com/y8d77ocw
I’ll see your Hans Zimmer, and raise you a Hans Zimmer
https://www.youtube.com/watch?v=uwkLZg6WDek&list=PLco_u-O9FeQ_cV5gc3VdUHoQYBI73MYkU
yup, good one. the best of the bestest were a combo Hans Zimmer with Lisa Gerrard, remember? i.e. Mist? Eerie as hell itself.
https://youtu.be/gmzTFVlES_I
stop, backtab that prev fake news w/ “dead can dance”. Here’s the link to Lisa and Hans that skipped my paste bin:
https://youtu.be/HwmT_Sskaek