marking time ...
with an I for Incomplete. Another bloggiversary, little to show for it. Just some marginal notes ...
Reading the market: It's been 3 years since I prognosticated on the possibility of a humped inverted Treasury yield curve (in ~4 years; one to go, but probably more given deferred Fed unwind). This is a big deal in that most interest rate term structure models do not admit such a configuration (nor does the standard taxonomy of yield curves). The TIPS curve (Trasury Inflation-Protected Securities, real rather than nominal yields) has now been both inverted and humped for a couple of months, suggesting that the market considers short-term inflation retargeting to be on the table after the election. This configuration could migrate to nominal rates, but Fed interventions swamp any signal there (there's a host of technical factors involved as well: dearth of high-quality assets, long-term short-term financing problems, currency woes & overseas negative nominal rates ...), though it's remarkable that the steepest part of the curve is now out to 7 years (from 5 previously), consistent with a lower potential growth rate in developed economies, which is in turn inconsistent with the common pension fund assumption that 8% returns are feasible going forward (since it's been that way since WWII, just like a few years ago house prices never fell).
Reading the books: A lot more poetry in the reading mix so far this year, including in translation, but I'll only mention what's on the off-beat path: Francis Picabia, I Am a Beautiful Monster: Poetry, Prose, and Provocation (trans Marc Lowenthal): Collected stuff (except awful novel Caravansary, per ML). One thing you can count on is his unreliability. Not just embracing contradictions but trying to penetrate every orifice. Starts out automatic before hitting stride in full Dada, then after hiatus gets lyrical, technically better and thus not so good, before finally repurposing Nietzsche, pressing his suit with alterations (occasionally reversing fabric), especially The Gay Science, sadly. More pervasive irony than the Brooklyn hipster scene. (Of course I'm biased, Picabia one of my faves, though behind de Chirico & Duchamp.)
fishfishfishing with Basho
toss another frog into the pond
grasp it by the leg and flick your wrist
to make it skip across the water
Reading the market: It's been 3 years since I prognosticated on the possibility of a humped inverted Treasury yield curve (in ~4 years; one to go, but probably more given deferred Fed unwind). This is a big deal in that most interest rate term structure models do not admit such a configuration (nor does the standard taxonomy of yield curves). The TIPS curve (Trasury Inflation-Protected Securities, real rather than nominal yields) has now been both inverted and humped for a couple of months, suggesting that the market considers short-term inflation retargeting to be on the table after the election. This configuration could migrate to nominal rates, but Fed interventions swamp any signal there (there's a host of technical factors involved as well: dearth of high-quality assets, long-term short-term financing problems, currency woes & overseas negative nominal rates ...), though it's remarkable that the steepest part of the curve is now out to 7 years (from 5 previously), consistent with a lower potential growth rate in developed economies, which is in turn inconsistent with the common pension fund assumption that 8% returns are feasible going forward (since it's been that way since WWII, just like a few years ago house prices never fell).
Reading the books: A lot more poetry in the reading mix so far this year, including in translation, but I'll only mention what's on the off-beat path: Francis Picabia, I Am a Beautiful Monster: Poetry, Prose, and Provocation (trans Marc Lowenthal): Collected stuff (except awful novel Caravansary, per ML). One thing you can count on is his unreliability. Not just embracing contradictions but trying to penetrate every orifice. Starts out automatic before hitting stride in full Dada, then after hiatus gets lyrical, technically better and thus not so good, before finally repurposing Nietzsche, pressing his suit with alterations (occasionally reversing fabric), especially The Gay Science, sadly. More pervasive irony than the Brooklyn hipster scene. (Of course I'm biased, Picabia one of my faves, though behind de Chirico & Duchamp.)
fishfishfishing with Basho
toss another frog into the pond
grasp it by the leg and flick your wrist
to make it skip across the water
posted by nnyhav | 14:57
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