Monthly Archives: August 2010

Back to the curve

Please examine the picture/data carefully.  Most of us that follow these quotes, have become well to acclimated.

The five year treasuries have a “real yield” of 0.12.  Obviously this states a major flaw in the CPI.  While it is tough for many people to swallow, the CPI is in fact over-estimating much of the inflation.  A very simple example of the CPI estimate is in record labels.  While the price CD albums have not dropped, is there really any teenagers out there still spending $100+ annual on music albums?

I’m not sure “real-inflation” is even the answer for finding real returns on yields.  If our overall consumption to happiness ratio can be reduced, the value of money increases.  In all honesty, I think this has happened for most of the western world that has dominated the financial markets.   We are able(forced) to be happy with less petrol, travelling, paper, cd’s, vinyl, water, immigrants, children, etc.

Yield is a very exciting yet difficult concept that goes beyond a number.  If you need a number to describe yield, your probably one of those people that need a number to describe happiness.

Hello world!

Nothing much to say here.  Other than check out the yield curve.

The spread between 2 year yield and 10 yield is finally back down to 2.12%.  While numbers alone mean nothing, this usually indicates a period of stability.  It feels as if the media corporations fear this lull in financial activity, while in reality this lull period seems to be desperately needed.

On a side note, attached is a picture from my latest vacation.