Monday, September 17, 2012

Uncharted Territory Update

Click to enlarge.

This chart is like watching a drunk driver trying to navigate home at 2:00am on a Saturday morning.

Where are you headed now Ben? You might want to stick to the blue or purple trend lines. Exploring that upper left portion of the chart will give us stagflation (or worse). I know, I know. You were nearly on the deflationary right sidewalk a bit earlier and have a fear of it now. That's understandable. Sober up or you will eventually ruin the purple trend line's high correlation though!

Click to enlarge.

Note the slower driving speed. Trust me on this. It's a good thing! Slower speeds do less damage on impact, lol. Sigh.

Let's check out 2012's Bondmageddon while we are here.

Click to enlarge.

The recent upward trend is definitely worth noting. However, where we are compared to 2012's median is worth noting too. Panic? Yawn? You make the call. I am relatively indifferent.

And finally, let's see how Jeremy Siegel's great TIPS bond bubble bust of 2011 is proceeding.

Click to enlarge.

Real interest rates have risen *so* much since he predicted they would in February of 2011. It's amazing to look at. Score one for the ivory towers! Assuming that I'm not being sarcastic, CNBC needs to have more Wharton School professors of economics on to tell us how not to invest/save next!

In all seriousness, Friday's 10-year TIPS hit a record low yield of just -0.76%. Will this economy's wonders never cease? As a long-term holder of TIPS and I-Bonds, I find this all incredibly unexpected.

See Also:
Uncharted Territory Update
2012's Anti-Bondmageddon!

Source Data:
FRB: Selected Interest Rates
US Treasury: Interest Rates

1 comment:

Stagflationary Mark said...

For those just tuning in, the daily mileage chart shows the distance the data point on the first chart is moving per day.