Albeit at a “no drama” Obama pace, for 5 consecutive days, the slope of this curve has steepened. See the chart measuring the spread between 10s and 2s below. We like to see a positive and expanding slope to the curve because it allows for liquid long capitalists to make money off of the levered.
Borrow short; Lend long – that’s not a new investment model, but it is one that I need to see in order for The New Reality to prosper.
Flat yield curves beget banks taking on undue amounts of leverage in order to earn a return. I don’t do that. Call me conservative, or call me right. I think this is the kind of American Capitalism that people can buy into and trust.
KM
Borrow short; Lend long – that’s not a new investment model, but it is one that I need to see in order for The New Reality to prosper.
Flat yield curves beget banks taking on undue amounts of leverage in order to earn a return. I don’t do that. Call me conservative, or call me right. I think this is the kind of American Capitalism that people can buy into and trust.
KM
