tag:blogger.com,1999:blog-34323687.post6324300227428954996..comments2024-03-29T15:07:48.008+00:00Comments on Macro Man: Is the yield curve forecasting a recession?Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-34323687.post-4980264037790366362006-11-07T16:04:00.000+00:002006-11-07T16:04:00.000+00:00thanks for the heads upthanks for the heads upAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-64372242518602362942006-11-06T19:07:00.000+00:002006-11-06T19:07:00.000+00:00One of the problems, of course, is that you've got...One of the problems, of course, is that you've got central banks at the short end, and pension funds at the long end (hence the consistent popularity of 10-30 flatteners in the US and Europe.) An interesting dynamic over the next few years is to see if CBs do what they've said they are going to do, i.e. move out the credit curve. If so, then spreads will likely remain tighter in the future than they have been in the past. <br /><br />An interesting trade at some point will be to figure out where their 'cut-off' is in the ratings spectrum (assuming there is some broad consensus amongst reserve managers) and to play a widening of the spread between those credits just inside their universe and those just outside.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-29837099731364245022006-11-06T18:27:00.000+00:002006-11-06T18:27:00.000+00:00I believe that the buying of the shorter end by Ce...I believe that the buying of the shorter end by Central Banks (esp. China ) forces the curve to an inverted level that it wouldn't normally be ... I watch the 5-10 year curve and until that inverts , IMO , the economy will skate through at a lower level , but not recessionaryAnonymousnoreply@blogger.com