The US 10 year interest rate has just suffered a DieHard6.0 beat up, and just like the movie the final leg should be really exciting. Funny thing is, as in the movie business blowing things up cost a fortune, so does rising interest rates in a massively indebted economy. Boom.
Of course, don't mention costs rising from the price of gasoline, or the increase in payroll tax or food inflation. Something has to be taking more and more after tax personal income from the very important US consumer. (Remember the US consumer is 70% of US GDP and 20% of the World GDP).
First quarter US GDP was revised down from an annual rate of 2.4% to 1.8%. The drop was due to lower personal consumption expenditures than initially forecast.
The Wall Street Journal ran this graphic yesterday. Anyone who is banking on consumers to continue spending as they have is out of their mind.
The cycle is still up for the US Ten year interest rate...a few more months of up trend to go. Get the feeling recession may be back on the table late 2013 (if not already). The US Fed has of course outlawed recessions in the business cycle, let's see how that will work out!
.."Success in trading means excess of profits over losses. If anyone tells you they can almost be invariably successful, put him down as trying to impose on your credulity."..
- Richard D Wyckoff
.."Markets are designed to allow individuals to look after their private needs and to pursue profit. It's really a great invention and I wouldn't under-estimate the value of that, but they're not designed to take care of social needs"..
- George Soros
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