One measure of banking system instability has been the 10 year Treasury Note over the 3 month Treasury Bill. For years this metric remained between one and two. Occasionally it would spike but quickly returned to the normal range. In 2008 the volatility began to increase. During the big crisis the three month bill went to near zero which caused this chart to move toward infinity. (Well, 427… close enough.)
The IRX moved away from zero in 2009 and now sits at around 0.13% yield (not far from zero). The main thing I notice is that this ratio is moving back up which makes me assume the crisis is not completely over yet.
Charts courtesy of Stockcharts.com
So what could be causing the worry in the banking system now? Here is a guess. Nobody wants to play in the mortgage investment market. There was not even a spastic bounce off the low. This is certainly the worst industry chart I have ever found. Not only don’t they want old mortgages, no one is interested in funding new ones.
Hi,
It’s agnes1938…
What’s your opinion of Elliott wave analysis?
thx
Alexander – I use E-wave analysis for long term market evaluation. It has always worked well in the long term. I don’t have the patience for shorter term analysis as there are too many possibilities. But others use it and have success.