Friday, December 20, 2013

Bond Yield Flattening

30y-10y, 10y-5y, 5y-2y Treasury differentials.  Click for larger.
Seems that when 30year is rising and the yield curve is "flat" (the differences are equal) we see a recession.  Three instances are not enough but...

Flat or curved?  you decide.
 That ocean looks pretty flat to me. 


Cinco-X said...

RD: Three instances are not enough but...

Given the extraordinary circumstances of the last 5-7 years, I'd suggest that we really only have one instance like the most recent...

sm_landlord said...

California would be carved into 6 states under tech entrepreneur plan

Close, but they got the southern border of Dawgifornia wrong.

Rob Dawg said...

Yes indeed. The lines are reminiscent of those old "New Yorker" covers. He carved out his slice of Silicon Valley and the rest was afterthought. Totally ignorant of any of the real criteria for viable borders.

And those names! "West California?"

Five more? No. Eight more.

PC Pacifica California SF pennisula and environs.
MC Centro California Central Valley, mountains.
AC Alta California Northern counties.
CC Costa California Ventura to Monterey - Tehachapis/Coastal Range. Aka Dawgifornia.
LA Angeles California All the Miserable urban crap, social problems,
etc. LA, Orange, Riverside, Antelope Valley, San Berdoo.
SC From Sud California San Diego, Imperial and environs.
-------- OR --------------
WC Wacko California. SF pennisula and environs.
CC Centro California. Central Valley, mountains.
PC Pacifica. Northern counties.
Q. [What's your like of separation between Wacko &
Pacifica, and Wacko & Costal?]
A. Marin can go either way... Don't go there!

LA All the Miserable urban crap, social problems, etc. LA, Orange,
Riverside, Antelope Valley, San Berdoo.
SB Coastal California. Ventura to Monterey - Tehachapis/Coastal Range.
Q. I still think Ventura belongs in L.A. :-)
A. (serious for a minute) LA thinks that. They need the good air, landfill sites, growth expansion, etc. If you were to look at aerial photos it would be obvious that there WERE reasons why Vta did not become like Orange County or San Berdoo. You can actually see the border from the air.

In fact linear proximity is the only factor that puts Vta in LA's sphere of influence.

SC Sudo (Pronounced Pseudo) California. San Diego, Imperial and environs.
For all the lighthearted description above; the areas have geographic,
historical, economic justification. We need more Senators, representative
state govt, federal clout, regional solutions, etc.
I know this derived from the concept that city transportation boundaries
are ineffective but the conclusion is inescapable. CA is too big.

Cool, I can count on your vote? Oh, wait us Coastals don't need nuthin
from you Angelenos or are you a Centro?

Each state would be among the top 20 most populous, largest, richest
states in the union. The idea that the Ventura County Superintendent of
Schools needs more votes to win than Senators from Montana is weird to say
the least. When people refer to LA County Supes as their Lordships
without smiling and they each represent multiple congressional districts
something is wrong with CAs political structure. Transportation is one
symptom of political dysfunction.

W.C. Varones said...

I don't believe it's flat you're describing, but straight.

Flat is the first red circle (and to a lesser extent the second and third), where the y-axis values (slopes) are low.

What the fourth red circle shows is a steep but non-curved yield curve.

Rob Dawg said...

Thanks for the correction. I meant linear (non-curved) and was imprecise to use flat.

The steepness does afford flexibility in avoiding the dreaded inversion.