If it gets any flatter, it will be called a pancake…
Interbank lending rates
Total Return Bond Indices
Change in YTM
GSEC SUB 1-3
GSEC SUB 3-8
GSEC SUB 8
Riding down the rates curve has been a one-way trade so far this year. Read our analysis on Bonds and Rates.
Thought to sum up the month
Tasks that you are driven toward by Gain produce more significant positive results in your life and your business than tasks that you are driven toward by Prevent Pain.
If you continue to do solely what is necessary to survive every day, all you will accomplish is preventing pain from coming your way. To move your life or your business forward from where it is today and to see an improvement, you must do something extraordinary— something that you didn’t have to do at all. You must pursue Gain.
Standard & Poor’s declared Argentina in default after the government missed a deadline for paying interest on $13 billion of restructured bonds. (Bloomberg) It is but a flesh would. The country’s predilection for self-sabotage is legendary. (WSJ)
With each passing month, the euro zone edges closer to deflation. CPI in the euro area fell to 0.4% in the year to this month, down from 0.5% in June. (FT)
When I was in high school, we were taught about “truth tables.” It is a mathematical table used in logic to tell whether a propositional expression is true for all legitimate input values. Watching pundits speak on TV is makes you wonder how they could ever have passed high school algebra.
The Can’t Lose Argument
Beware those who are never wrong. The “Can’t Lose Argument” goes something like this: A data point will be mentioned, and no matter what the net change in that data — up, down or neutral — it is somehow bad for markets.
Sometimes they matter, sometimes they don’t. Sometimes one key divergence that was extremely important ends up meaning exactly zero the next time around. A single divergence, in and of itself, has all of the reliable predictive power of a bowl of chicken bones spilled out across the table.