Very complicated question. No one knows for sure in the short
term and there's a lot of debate and disagreement on what it even
means anymore given the changes in manipulation patterns (e.g. QRA
going from a typically 80/20 mix (long term bond sales to short
term) to a 20/80 flip (20% long term debt to fund gov debts and 80%
short term sales). In theory financials should do poorly with an
inverted curve because the whole system is designed around
borrowing short and lending long. But right now they are 1000%
focused on escaping the CRE debacle without a systemic crash event
(they are desperate for lower rates to refi) and will worry about
longer term viability if they make it through. They've been
in extend and pretend mode for a couple of years now waiting for
tomorrow, but they know they're running out of leash. This is the
elephant in the room when it comes to demanding 50 tomorrow -
saving the rich bank owners that made bad decisions.
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Very complicated question. No one
What would it mean if we go inverted again on ...
Posted by bthefnd on 17th of Sep 2024 at 11:07 am
Very complicated question. No one knows for sure in the short term and there's a lot of debate and disagreement on what it even means anymore given the changes in manipulation patterns (e.g. QRA going from a typically 80/20 mix (long term bond sales to short term) to a 20/80 flip (20% long term debt to fund gov debts and 80% short term sales). In theory financials should do poorly with an inverted curve because the whole system is designed around borrowing short and lending long. But right now they are 1000% focused on escaping the CRE debacle without a systemic crash event (they are desperate for lower rates to refi) and will worry about longer term viability if they make it through. They've been in extend and pretend mode for a couple of years now waiting for tomorrow, but they know they're running out of leash. This is the elephant in the room when it comes to demanding 50 tomorrow - saving the rich bank owners that made bad decisions.