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The Yield Curve Twists Again

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Expect the upward trend of the yields long-term treasuries to continue and accelerate. For the Yields on 10 Years US Treasury Notes the objective is 3.500% [ 121 on December Futures on 10 Years US treasury Notes] on September 17th which means that we have already made 30 BIPs and we have still 75 to make in 8-9 days that makes an average increase of 9 BIPs.

As chasing rates will be less a necessity the spreads between corporate and government bonds (in perticular junk) will widen. Junk bonds, of course, will collapse with the crash.

TED Spread:

As chasing for rates will be less necessary the TED spread will continue to widen as it has done since August 25th. It will explode on the crash.

Stock Market:

As market participants will misinterpret the steepening of the yield curve stock indices will continue to go up till Sept. 7th.


Minerals:

Mineral prices will continue to crawl up till the yield curve gets normal, they will then sharply go down to their marginal cost of extraction (Commodity Conundrum Solved: The Hidden Parameter in Interest Rates).



Facebook:

Events:

The Market Crash: Be Prepared.

Post Crash Economy - Economic Non Compliance Week.

Page:

The Post Crash Economy

Groups:

Prepare for Market Crash Before September 9th.

The Religious Interpretation of Employment, Interest, and Money.

Libertarians Against Credit.

Muslims Against Credit With Interest.

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I have an engineer diploma from Ecole Centrale de Lyon (France) and a MBA from Boston University. Since 1986 till 1994 I have worked as a broker dealer on the French Domestic Fixed interest market. Since the spring of 1994 I have worked on the (more...)
 

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Twist and Shout! by Shalom Hamou on Saturday, Sep 4, 2010 at 3:36:14 AM