E Suffering With Sontag

Ye olde yield curve. Inversion is in the eye of the beholder. The two-year to10-year spread was still positive at 19 basis points at the close of trade Dec. 24, according to U.S. Treasury data. That spread has narrowed from 58 basis points at the beginning of the year. However, the TIPs, or inflation-protected bonds, showed an inversion between the five-year and 10-year yields. We find this ominous in that it foresees a policy mistake of tightening too zealously by the Fed, the traditional trigger for economic downturns.

Donald Trump is in over his head. Forget the girls, Russia, emoluments, etc. No matter what echo chamber you frequent – be it “Fox & Friends” or “Morning Joe” – it is clear by now that President Trump could be non compos mentis with no strategy but the seat of his pants.

  • Though he hailed his meeting with China’s Xi Jinping earlier this month as a deal of some sorts, what exactly was struck other than a delay in tariff impositions remains ambiguous.
  • Insulting the intelligence of the Fed (though, strangely, he might be right that it is too worried about inflation) can only have the opposite effect he wants.
  • Partial government shutdown over the wall fetish and fear that Mattis’ departure from Defense removes adult supervision portend escalating distraction and confusion.
  • Public airing of Trump-related stuff by the Democratically controlled House could make the President mad enough to do something daffy.

In the face of all the uncertainty, we think it vain to make a case for value in equities.

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