Day: December 28, 2005

Officially Inverted and Front-Page News

As per the front-page of most/all of today’s financial publications, and as was alluded to in my 12/24/05 posting, the 2-year and 10-year Treasury Notes finally inverted (i.e., the yield on the 2-year notes is higher than the yield on the 10-year notes).  This is important because a material inversion (extent and duration) normally means a recession is on the horizon.  So will this be a material inversion?  Will we still be inverted when liquidity comes back to the bond market in January??  When Alan "Bubbles" Greenspan retires at the end of January???  If still inverted, how inverted????  And what the heck will the dollar be doing?!  As you know, I think now is a great time to diversify out of the dollar (before 2006 begins).  We’ll leave it at that for now.  Cheers!