I Told You So - 7 August 2019

Well, the rollercoaster has gone uppy-down (not for the first time over the course of these missives), to quote a Boss Man I had in a food factory long ago. My job was to pull straps of bread pans (thoroughly greased inside and out) stacked on a skid and throw them on a conveyor belt where they were pulled under the dough formers, and thence to the proof racks. Being all of 140 lbs. soaking wet, and the fact that the pans were generally banged up, they generally didn't like being separated. Thus some amount of angst on my part, and so, every so often a strap would end up with the cavity side facing the belt when the process got behind. Then, of course, the doughs would jam up the former, since the doughs had no where to go. So Boss Man would run over to clear the mess and scream "Uppy Down!!!" at me. Not that I cared a whole lot.

Your casual rate inversion is something we should all care about. Thanks to The Manchurian President and his cabal of "the best people", who don't have one complete brain among them, Treasuries are soaring and interest is plunging, even below the 'cut' of a few days ago. The CxO class, still in the realm of really cheap moolah, still can't find profitable places to put all that cheap money. What a wonderful world it would be!

The US Federal Reserve cut rates last month for the first time in a decade. That helped precipitate the decline in long-term bond yields, although yields had been trending lower for some time.

That's a worrying sign: The yield curve, which plots the interest rates across the maturities of debt, is currently inverted. Shorter-term debt is paying higher rates than longer-term bonds, as investors remain fearful of a US recession. An inversion of the yield curve has preceded every recession.