The use of the Baseline Portfolio we have been watching since December 1 2008 is shown above. We are seeing the downward slope of the bundle and the yield is slowly declining. The problem is that the market has been the only safe haven for much of the investment given the lower rates of the bond markets.
The above shows a better view perhaps of what we have been saying. We were on an upward trend but Japan has brought that to a halt.
The yield curves are shown above. The low curve was last year in August but we see a steepening now.
This shows the spread and we see that the spread is nearing the peak over the past two year period again. The question is will we see a higher spread. The FED has kept the lid on this but like nuclear reactors sooner than later the pressure will be just too much.
This demonstrates the 90 day and 10 year rates and spread. The spread here is back to peak and the 90 day yields are drawn back down again, but the 10 years are not that high.
Thus one must ask, where are the returns. For those on fixed incomes and those near retirement this poses a disaster situation. Place SSI pressure on this and we will see an explosive result in the next election when this becomes more apparent.
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