Tuesday, February 2, 2016


That's where the ten year closed today.  To say there is now a true flight to quality is to understate the case.  Energy was off again but the real disaster de jour was financials.  They are in a bad spot primarily as a result of two things: A dreadful global economy...and yes Jane, this economy isn't much better, and secondly horrendous policy decisions at the lever of the administration and certainly at the Federal Reserve.  The latter entity is the more immediate cause of the current near-crisis in attempting to neutralize the stupidity of the administration and congress, the latest in a series of missteps being the interest rate rise which came far to late based on a misjudging of the state of the economy and which produced the exact opposite of what was intended.  If the banks were being hamstrung in their ability to show profit by regulations they are now further stymied in this process by a yield curve that grows flatter by the day.  Confidence is evaporating and with it goes perhaps the last chance of anything good happening in the economy this year.  1.848%  That's all that counts today.  We will speak of this in greater detail tomorrow.

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