Well, I don't follow your point there. But, just to add something I haven't mentioned, the yield on the 30-year Treasury popped above its 200-day moving average either Monday or Tuesday. Now, with the long end rising and Greenie slamming the low end, banks can lend long-term while borrowing short-term at much less risk.
Banks have more incentive to lend, in other words. Maybe not tommorow morning, but soon. That's how it worked in 1990.
With regard to the stock market, I'm not saying, "buy, buy, buy." I'm saying that I, personally, can finally see the makings of a turn in the economy that I think will begin in about six months.
We're going to have more warnings from tech, banks, retailers, practically anything you can think of. And there will be bankruptcies. Lots of those.
But the yield curve, having been inverted and flat and with a hump in the two-year, is now looking a lot more normal. Another 50 bp cut, and with the long end going to 6, then banks will practically be able to print their own money.
PB |
