Special Blog Post: Apologies for Absence

The Dark Wraith has had a long journey over the past couple of days. Across the Midwest, part of it was on foot, part of it was through the kindness of truckers, the remainder was on buses. The trip has not ended, but it will by tomorrow evening. Right now, sanctuary and a computer are at hand, so a decent post is in order.

No, this won't be an uninformative post. Tonight, CNN.com is running an article entitled "Soft and flat? Danger!", which is about the growing concern among economists and investors about the "flattened yield curve" that could point to an "emerging soft patch in the U.S. economy." In other words, long-term bond rates are falling, short-term rates are rising, and there may come a point where the long end of the yield curve meets the short end of the yield curve.

About two-thirds of the way down the article, there in black and white were the three words of fear and loathing: yes, CNN used the term "inverted yield curve," a prospect brought up several times and culminating in a Thursday, May 19, 2005, Special Analysis post here on The Dark Wraith Forums, "Of Crystal Balls and Yield Curves." In summary, when the yields on long-term Treasury securities fall below the yields on short-term Treasury securities, the situation is called an inverted yield curve, and these fairly rare animals have preceded five strong recessions in recent U.S. history.

As a point of reference, Friday morning, the yield on the benchmark 10-year Treasury bond made it to a 14-month low, and it closed at a yield of 3.97%. The yield on the short-end, 3-month Treasry bill closed at 2.84%. That puts the 3-month/10-year yield spread at 1.13%. Exactly one month ago, the yield on the 10-year Treasury was 4.58%, and the yield on the 3-month Treasury was 2.69%, for a yield spread of 1.89%.

Yo.

The Dark Wraith is glad to note that CNN.com has finally noticed that the sky up above just might be doing what the long end of the yield curve is doing: yes, folks, the sky could be falling.

At least, it certainly looks that way.


Consider this something of an open thread while your host finds his way back to more familiar and somewhat more secure surroundings. As always, if you're the last one out the door at the end of the evening, make sure the VACANCY sign is turned off, see to it that the cat isn't in the walk-in freezer, and check the back parking lot for mainstream journalists from the Convention Center who got lost on their way back to the Mainstream Media Left Behind Festival.


The Dark Wraith is enraptured.