Note the drop in the 10 year rates. Also a slight rise in the short term rates. There is a flattening.
The above is a longer term view. Not we were seeing a steepening of the curve for the past 18 months but suddenly it is dropping and flattening. This may very well be a response to the Euro collapse at least in the short term.
The above is the spread of 10 year to 3 month Treasuries and it is clear here the spread is closing quickly.
The above is a single chart summary of what we have just shown. Yet despite the low costs the commercial credit is still very tight and is just killing any recovery.
The lack of other investment options is driving money to Treasuries despite the exploding debt. This means that money is NOT going into new investments and thus for the long term we are not building a base for recovery. Not a good thing.
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