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Since the spring of 1994 I have worked on the fact that the secular downward trend in long-term yield would, at some point, bring a market crash.
I have resolved the famous Greenspan Conundrum as I discovered that long-term yields decrease with the increase of income/wealth gap. Hence income distribution is an important factor of macro economic development.
I have developed a model of the yield curve that describe long-term yields as options on shorter term yields.
My conclusion was that when a "inverted' yield curve, as it would necessary be, would return to its fair value it will trigger a market crash which under the circumstances of a 0% short-term interest would be of major consequences.
OpEd News Member for 788 week(s) and 2 day(s)
16 Articles, 0 Quick Links, 32 Comments, 5 Diaries, 1 Polls
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Sunday, August 29, 2010
Date of the Market Crash? SHARE
"In one of the greatest investment markets in the world, namely, New York, the influence of speculation (in the above sense) is enormous. Even outside the field of finance, Americans are apt to be unduly interested in discovering what average opinion believes average opinion to be; and this national weakness finds its nemesis in the stock market."
Date of the Market Crash? SHARE
"In one of the greatest investment markets in the world, namely, New York, the influence of speculation (in the above sense) is enormous. Even outside the field of finance, Americans are apt to be unduly interested in discovering what average opinion believes average opinion to be; and this national weakness finds its nemesis in the stock market."
