The Bernanke and the twisting yield curve: the movie

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#1 Thu, Sep 22, 2011 - 3:58pm
Ottawa, ON
Joined: Sep 13, 2011

The Bernanke and the twisting yield curve: the movie

So The Bernanke and The Fed and The FOMC announce they want to twist the yield curve? You can watch the yield curve dance to the pied pipers here at Long end is dropping as of late, as they say they want. Or at least imply, in the twisting trade of $400B in short debt for long debt. But if banks make money by borrowing short and lending long, won't the already insolvent banks get squeezed even tighter as the curve tightens? Could it be that they *want* this, for the final great "re-capitalization" bailout, ie the indenturing of the taxpayer? Maybe just not enough "political will" at this point for a great big bailout/printing frenzy, so this time it is a money-supply neutral operation, merely setting the stage for the justification crisis yet to come?

No tinfoil, I'm just sayin'...


Edited by: bbacq on Nov 8, 2014 - 5:04am