[movermike] movermike: Recession Ahead?

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Posted by movermike:
Recession Ahead?
http://www.movermike.com/posts/1158735706.shtml


   We have an inverted or negative yield curve!

     Inverted yield curves are rare. Never ignore them. They are always
     followed by economic slowdown â or outright recession â as well as
     lower interest rates across the board. Take a look at the table
     below. You can see that rates peak at 5.12% and are lower
     throughout

   Treasury constant maturities
   Nominal 10                  
   1-month                      4.76
   3-month                      4.94
   6-month                      5.12
   1-year                       5.04
   2-year                       4.88
   3-year                       4.80
   5-year                       4.77
   7-year                       4.78
   10-year                      4.81
   20-year                      5.01
   30-year                      4.93

   [1]Inverted Curve

     At first glance an inverted yield curve seems like a paradox. Why
     would long-term investors settle for lower yields while short-term
     investors take so much less risk?

     The answer is that long-term investors will settle for lower yields
     now if they think rates â and the economy â are going even lower in
     the future. They're betting that this is their last chance to lock
     in rates before the bottom falls out.

   [2]Jesse has a most provative comment based on this chart:

   [TICSept06.jpg]

   [3]inverted yield curve [4]negative yield curve
   [5]Short Position in 10 year Note [6]Mover Mike

References

   1. http://www.smartmoney.com/onebond/index.cfm?story=yieldcurve#inverted
   2. http://www.geocities.com/arthurcutten/jesse.html
   3. http://technorati.com/tag/inverted+yield+curve
   4. http://technorati.com/tag/negative+yield+curve
   5. http://technorati.com/tag/Short+Position+in+10+year+Note
   6. http://technorati.com/tag/Mover+Mike