10Yr and SWAP Spread

  SWAP spreads recently took a nosedive and are once again trading at negative levels, even for shorter maturities. As can be seen from the chart below, treasury yields, here represented by the 10 year maturity, rose during QE policies programs contradicting the very raison d’être spouted by the central bankers. Interestingly enough we also…

In last week’s article, we explained how the yield curve could cause GDP to contract in The Yield Curve and GDP – a causal relationship. Some of our readers suggested the analysis was wrong on back of an outdated view of modern money creation. The critics claim modern banks are not dependent on central bank…

Productivity since 1790

In the first episode we showed how the US became an unsustainable service sector based economy from the 1970s onward when service sector employment diverged from manufacturing without a corresponding boost in productivity. In the second episode we laid out the consequences that transition has had on labour in terms of lower wages and benefits….

Much has been said about the Basel Committees ambition to create a regulatory framework that will be resilient enough to withstand and contain another Lehman Brothers scenario. Remember, before extending and deepening the regulations put on banks in order to make them more resilient to short term funding problems, the regulation known as Basel II…