Monday, 19th August 2019
Two reasons why I’m more Novogratz than Trump on Bitcoin….
The yield curve is inverted. In the US and in Britain….
What that means in English is that capital is pouring out of the stock markets and into the perceived safety of long-term government-backed bonds – pushing up the prices of those bonds and diminishing yields….
So much so, the yield on long-term bonds has fallen below the yield on short-term bonds. It should be the other way around….
In an orthodox climate, lending money for longer periods is considered risker than lending short-term – and the rewards are greater as a result. That makes total sense….
But we do not live in orthodox times and things have been turned on their head. Right now, it costs the Us and UK governments more to borrow from investors over the short-term than it does over the long-term….
The VIX – a guide to levels of fear and complacency in the markets – says investors are more scared than they were. The reading spiked at 24.5 a fortnight ago. Right now, it sits on 18.4. That’s a higher reading than we’ve seen for most of the year….… Click here to read more