Central Perk

sâmbătă, 29 martie 2014

Mish's Global Economic Trend Analysis

Spain Misses 2013 Budget Deficit Target in Spite of Massive Tax Increases; So Much Pain for Virtually No Reward

Posted: 29 Mar 2014 07:16 PM PDT

The official results are in. Spain missed its budget deficit target considerably by reasonable reporting, barely by another.

Spain's Budget Deficit Only Two Tenths Lower in 2013 Despite Massive Tax Increase

Via translation from Libre Mercado please consider Spain's Budget Deficit Only Two Tenths Lower in 2013 Despite Massive Tax Increase.

Spain's budget deficit fell from 6.84% of GDP in 2012 to 6.62% of GDP last year.

The budget goal was far less ambitious than previous, but still did not met the commitment to Brussels. The Government has published today the first official public deficit figure for the end of 2013, there will be new reviews in the coming months and a year, but Spain has deviated from the intended target.

Specifically, the government recorded a hole of 6.62% of GDP in 2013 (67.755 billion euros), one tenth of a percentage point above the limit of 6.5% agreed with the European Commission, according to Finance Minister Cristobal Montoro, in a press conference after the Council of Ministers. However, the announced figure does not include the cost of financial aid reported last year (0.46%), so that the actual deficit stood at 7.08% of GDP.

So Much Pain for Virtually No Reward

Via translation from Guru's blog, paraphrasing a bit because of a difficult translation, please consider So Much Pain for Virtually No Reward, Fire the CEO.

Happy and content as a lark, Montoro proudly announcing that Spain "almost" met the deficit target.

The Spanish public deficit closed at 6.62% of GDP in 2013, slightly more than a tenth above the target of 6.5% agreed with the European Commission (well the first we agreed if I remember correctly was 4.5%)

Are you telling me that this is all we get for so much pain? Well, boys and girls, something has gone badly wrong.

I can tell you this: If I focus on the cold numbers, the deficit fell only 2 billion euros with a gap of almost 68 billion (excluding aid to banks). Please fired the CEO of this company.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Teaching Revolution: Online, Accredited, Free; Start Learning Now!

Posted: 29 Mar 2014 10:14 AM PDT

One of the things I staunchly believe is that the cost of education will drop sharply. It has to. The current path of graduating student loan zombies is simply not sustainable.

Eventually, online education will be both inexpensive and accredited. In turn that will drive down costs at brick-and-mortar colleges.

MOOCS Pick Up Steam

The Financial Times reports Teaching Revolution Gathers Pace.

Regina Herzlinger is a bit of a superstar. She was the first woman to be a tenured professor at Harvard Business School, and is now leading its march into Moocs – massive open online courses – which promise to revolutionise the world of higher education.

Professor Herzlinger, whose 11-week course on Innovating in Healthcare will start this month, is an advocate of this model of free online education. "I believe Moocs can democratise education," she says. "It's fantastic to reach so many people."

Harvard, MIT Sloan, the University of Virginia's Darden school and several other big-brand US business schools are experimenting with Moocs. The Wharton school at the University of Pennsylvania has gone so far as to put 10 per cent of its MBA core courses online for free access. Like Prof Herzlinger, Wharton's vice-dean of innovation Karl Ulrich believes the social impact of these programmes is a central reason for promoting Moocs. He cites the example of one Wharton Mooc that enrolled more than 130,000 students. "There's just a huge, huge take-up."

In Europe, business schools such as IE in Spain and Warwick in the UK have taught online MBA programmes alongside their highly ranked full-time programmes.

Now, top schools in the US, such as Kenan-Flagler at the University of North Carolina with its MBA@UNC, are validating the online mode of delivery.

Prof Anandalingam, formerly dean at the Smith school at the University of Maryland, says the technology is "state of the art compared with anything I have seen in the US. Students get a rich learning environment".

Khan Academy

Reader Philip writes ...

Mish,

I discovered your blog through the Khan Academy. Sal quotes you in some of the financial videos, and I have been a loyal daily reader ever since. I think his efforts are truly revolutionary in education-and thought it might be worth your time to create a link on your site or maybe do a posting or two so folks can get involved. His financial videos are top notch and cover most aspects of monetary policy, the federal reserve, banking, etc., but the real impact will be if he can truly affect change in the world education system. Read his book for more details on his plan for education reform-great stuff.

You hold a lot of eyeballs and influence, and any help you can direct to Sal and the Khan Academy, in my opinion, would be a direct extension of the values you promote.

Thanks! Keep up the great work,
Philip

It All Started With a 12-Year-Old Cousin

Phillip is talking about Salman Khan, the founder of the Khan Academy. The New York Times explains how Salman Khan Turned Family Tutoring Into Khan Academy.

In 2008, Salman Khan, then a young hedge-fund analyst with a master's in computer science from M.I.T., started the Khan Academy, offering free online courses mainly in the STEM subjects — science, technology, engineering and mathematics.

Today the free electronic schoolhouse reaches more than 10 million users around the world, with more than 5,000 courses, and the approach has been widely admired and copied. I spoke with Mr. Khan, 37, for more than two hours, in person and by telephone. What follows is a condensed and edited version of our conversations.

Q. How did the Kahn Academy begin?

A. In 2004, my 12-year-old cousin Nadia visited with my wife and me in Boston. She's from New Orleans, where I grew up.

It turned out Nadia was having trouble in math. She was getting tracked into a slower math class. I don't think she or her parents realized the repercussions if she'd stayed on the slower track. I said, "I want to work with you, if you are willing." When Nadia went home, we began tutoring by telephone.

Did you have background as a math educator?

No, though I've had a passion for math my whole life. It got me to M.I.T. and enabled me to get multiple degrees in math and engineering. Long story shortened: Nadia got through what she thought she couldn't. Soon word got around the family that "free tutoring" was going on, and I found myself working on the phone with about 15 cousins.

To make it manageable, I hacked together a website where my cousins could go to practice problems and I could suggest things for them to work on. When I'd tutor them over the telephone, I'd use Yahoo Doodle, a program that was part of Yahoo Messenger, so they could visualize the calculations on their computers while we talked.

The Internet videos started two years later when a friend asked, "How are you scaling your lessons?" I said, "I'm not." He said, "Why don't you make some videos of the tutorials and post them on YouTube?" I said, "That's a horrible idea. YouTube is for cats playing piano."
Continue reading the main story

Still, I gave it try. Soon my cousins said they liked me more on YouTube than in person. They were really saying that they found my explanations more valuable when they could have them on demand and where no one would judge them. And soon many people who were not my cousins were watching. By 2008, I was reaching tens of thousands every month. ....

Start Learning Now!

The mission page of the Kahn Academy says "Start learning now. Completely free, forever".

Those are words sure to soothe any deflationist's heart, while striking fear into the hearts of central bankers and misguided inflationists who think prices "need" to go up.

For further discussion of who benefits from central bank sponsored inflation, here is my own free refresher course.

Sal, if you catch this drop me a note. I would like to chat.

For everyone in school, or with kids in school, do yourself a favor and check out the academy.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Raise the Minimum Wage: It's the Right Thing to Do for Hardworking Americans

Featured

Weekly Address: Raise the Minimum Wage -- It's the Right Thing to Do for Hardworking Americans

In this week's address, Vice President Biden discusses the importance of raising the federal minimum wage. It's good for workers, it's good for business, and it would help close the gender pay gap, as women make up more than half of the workers who stand to benefit from a raise. And as the Vice President highlights, Congress should boost the federal minimum wage because it’s what a majority of the American people want.

Click here to watch this week's Weekly Address.

Weekly Wrap Up

FLOTUS Shows Us How She Moves in China

While visiting Xi'an, China, First Lady Michelle Obama was greeted by local kids and students performing music, double dutch jump roping, flying kites, and more. Of course, the First Lady couldn't resist getting in on the fun and showing the kids how she moves.

READ MORE

Six Days, Five Countries, One POTUS

President Obama spent this week across the pond, meeting with European leaders in the Netherlands, Belgium, Italy, and Vatican City, before traveling to Saudi Arabia to meet with King Abdullah. Deputy National Security Advisor for Strategic Communications Ben Rhodes took some time earlier this week to go over the President's schedule and the goals of the trip.

While in Vatican City, President Obama had an audience with His Holiness Pope Francis. Here's what the President said about their meeting, "I would say that the largest bulk of the time was discussing two central concerns of his. One is the issues of the poor, the marginalized, those without opportunity, and growing inequality. ... And then we spent a lot of time talking about the challenges of conflict and how elusive peace is around the world."

Extra! Extra! Read all about it! Over six million Americans have signed up for private health insurance plans.

Are you one of the six million? If not, what are you doing? There's only TWO days left to get covered before open enrollment ends on March 31. Head over to HealthCare.gov to get covered now!

GET COVERED

As always, to see even more of this week's events, watch this week's episode of West Wing Week:

WATCH NOW

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How your competitors may be outranking you with black-hat SEO techniques

How your competitors may be outranking you with black-hat SEO techniques

Posted: 28 Mar 2014 06:12 AM PDT

Black-hat SEO has been around as long as search engines, and many of the SEO techniques that were previously seen as white-hat and used by many, have gradually moved through the grey area to black-hat.

While many of these techniques are now likely to cause you more harm than good, it's frustrating to still see sites benefitting from old school black-hat tricks in a post-panda/penguin era.

Comment Spam and Track/pingback

This is something that we are all familiar with – you write a blog post and get lots of attention from people saying how useful they found it, only to find that their name appears as a suspicious keyword and they have added a link back to an unrelated website. It then becomes clear that the sole motivation for making the comment was for the link.

But the worst part about this is that, despite this form of spam being the main reason for Google to release the no 'nofollow' tag (which prevents any value from being passed through links), comment spam still appears to be working as well as ever.

Some examples

In the case below, the offending site ranks on page one for the term 'Karen Millen Outlet' – a brand that often has results removed after complaints are filed under the US digital Millennium Copyright Act. The exact same comment appears in over 560 posts:

I found that many of the spam links appearing on various blogs included terms such as "Louis Vuitton bags" and "Hermes Outlet". So, I did a quick search for "Hermes Outlet" and found this page ranking at number 3 http://chrisweaver.co.nz/hermes-bags-outlet-online-5179.asp. This page is pretty horrible, with a huge amount of keyword stuffing and a very poor design. It doesn't appear to have been live for long and has 566 backlinks that were built in the last 9 weeks, almost all of which are through comment spam.

While many of the linked sites above are no longer live, it's surprising how many of them do rank for the linked terms. For example, one site – sellyourcatsdirect.com ranks on page one for the linked term 'sell used catalytic converter'. Catalytic converters contain precious metals, so this industry is big business and black-hatters are cashing in.

HR Software

One particular area that I found has adopted this kind of spam is the HR software industry. For example, if you search “Pingback: HR Software” you will find hundreds of unrelated blog posts containing hundreds of spam links that point to a number of sites that succeed in ranking in the top positions for the term “HR Software”.

The same goes for spam comments. I searched “HR Software Says” “reply” (based on the format of a blog comment) and quickly found posts containing comments with exact match anchor text links to the same HR websites.

Payday Loans

Next, I looked at one of the most competitive keywords in search – 'Payday loans'. The number 1 & 2 organic results were: http://www.ocics.co.uk/ and gayhomestays.co.uk/

After clicking both of these results, I was presented with the same content, branded as 'Monkey Payday Loan' on different domains (although gayhomestays.co.uk/ redirects to http://www.discopaydayloans.co.uk/)

So, at this point, any users that aren't paying much attention believe they have landed on a website called 'Monkey Payday Loan'. After entering their details and clicking 'Get Cash', they are redirected to the real site – https://www.monkeypaydayloan.co.uk/ (which does not appear in Google's index), then after filling in your personal details you are redirected again to the loan provider via a referral link, so visits are tracked and commission is paid.

However, after checking again a day later, these sites were no longer ranking and had been completely removed from Google's index. I did some further searching and found that http://www.ocics.co.uk/ was previously 'The Oxford/Cambridge International Chronicles Symposium', and still has links from several Universities, which would no doubt have helped it to rank, based on their high authority.

I also found several other domains with the same 'Monkey Payday Loan' content, for example www.autovana.net, so I'm expecting this site to make a brief appearance in the same space in the not too distant future.

This is hardly a long-term strategy, but such a highly searched term is likely to generate thousands of pounds a day, so I'm quite sure that the spamming will go on!

To summarise

While this type of link building is still helping many sites to rank, it's only a matter of time before they are caught out, so we would never recommend making it part of your SEO strategy.

If you make genuine comments on industry related blogs that include real comments from others, then add a link back to your site (avoid messing around with the anchor text), but stay away from sites that accept suspicious looking comments.

If you're concerned that one (or more) of your competitors is taking part in black-hat activities, there are ways to report them to Google – https://www.google.com/webmasters/tools/spamreport although this isn't necessarily going to work, so don't expect them to be penalised instantly.

Please share your experiences of spam techniques that are still in use!

By Sam Gooch

The post How your competitors may be outranking you with black-hat SEO techniques appeared first on White Noise.

Seth's Blog : Looking for the sure thing

Looking for the sure thing

It's been done before, sorry.

It's never been done before, too risky.

It's too obvious.

It's too obscure.

It's too easy, everyone can do it.

It's too hard to launch, it'll never work.

Too indy, why can't you get backers?

Too mainstream, the man has polluted you, you sold out.

It's never been practiced, you'll do it wrong.

You've practiced it too much, it can't possibly be fresh.

Not here, this city/market/audience is too jaded.

Not here, this city/market/audience is untested.

The market has peaked, nothing goes up forever.

The market is dead, it'll never catch on...

Most bestsellers are surprise bestsellers, because there's no sure thing, at least not where we want to look for it.

• Email to a friend •

vineri, 28 martie 2014

Mish's Global Economic Trend Analysis

Reader Question on Banking System Insolvency, QE, and "Necessity"
McCain Wants More Weapons Delivered to Al Qaeda Rebels; How Do Warmongers Get Elected?
Outrageous but Highly Believable Rumor Involving Syria, Turkey, Kerry
Are You Minding the Curves? Sweet Spot is Likely Not Where You Think

Reader Question on Banking System Insolvency, QE, and "Necessity"

Posted: 28 Mar 2014 08:26 PM PDT

In response to Will Prices Rise Significantly When Velocity of Money Picks Up? reader Dave, a friend, noted that as the Fed jacked up its balance sheet, velocity has mirrored the curve to the downside.

Dave asks "Can't an argument be made that since much of the banking system is really insolvent, that the Fed increasing its balance sheet is necessary?"

"Necessity"

This depends on what you mean by "necessary" and more importantly, who gets to decide.

I am one of those who staunchly believes that banks should fail. More precisely: Banks did fail, but taxpayers bailed them out.

Was the last bailout "necessary"?

No - not to me. The world will not end if banks fail. Bondholders would have and should have paid the price. Who are the bondholders? In general, the wealthy own most of the assets, including bonds.

However, if "necessary" means in the eyes of central bankers, then yes – it was deemed "necessary".

It's all part of the moral hazard tactics of central banks that tells the "too big to fail banks" that no matter what they do, they will be bailed out, again and again and again.

Privatize the Gains, Socialize the Losses

Last time, Tim Geithner preached to Congress that financial Armageddon was right around the corner if Congress failed to pass a resuce package. Congress did pass a packages on the second attempt. Then Geithner promptly changed the terms of it to do what he wanted with the money.

Speaking before Congress, Bernanke said the collapse of Lehman was his biggest mistake. I suggest it was his only success. Over-leveraged financial institutions should pay the price for their folly, not overburdened taxpayers in general.

The poor bailed out the wealthy. The poor continue to pay the price in two ways.

Excessively low interest rates on deposits
Fed actions to drive up inflation when real wages do not keep up

Not only is that unnecessary, it's middle-class destructive. It's also conveniently disguised theft.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

McCain Wants More Weapons Delivered to Al Qaeda Rebels; How Do Warmongers Get Elected?

Posted: 28 Mar 2014 10:53 AM PDT

Lawmakers Bash Obama's Delusional Syria Policy

In a recent post I noted Turkey Plans Military Intervention in Syria, Bans YouTube for Leaked Reporting. As a followup, please see Outrageous but Highly Believable Rumor Involving Syria, Turkey, Kerry.

Meanwhile, back in the US Lawmakers Bash Obama's "Delusional" Syria Policy.

U.S. lawmakers lashed out at the Obama administration's handling of Syria's civil war on Wednesday, demanding a stronger American response to the conflict and better communication from the White House about its plans.

Senator Robert Menendez, chairman of the Senate Foreign Relations Committee, expressed deep frustration after Anne Patterson, the assistant secretary of state for Near Eastern affairs, declined to answer a question about strategy in a public setting.

"I have a problem with a generic answer to a generic question that I can't believe is classified," Menendez, a New Jersey Democrat, said during a committee hearing.

Members of the Foreign Relations panel in particular are frustrated by the administration's failure to do more in Syria, where 140,000 people have been killed, millions have become refugees and thousands of foreign militant fighters have been trained as rebels have fought to oust President Bashar al-Assad.

Arizona Republican John McCain, a frequent critic of Obama's foreign policy, called U.S. Syria policy "a colossal failure."

Secret Deals and the Failure to "Do More"

Once again McCain proves he is little more than a war-mongering puppet for the military "offense" industry. "Defense" has nothing to do with involvement in Syria.

Late January, Reuters reported Congress secretly approves U.S. weapons flow to 'moderate' Syrian rebels.

It seems that was about as secret as Turkey's secret discussion on intervention in Syria.

Rebel Infighting

And what are the rebels doing with the weapons the US sent?

Here is the answer: Syrian Rebels Fighting Each Other: Al Qaeda Clash with Rival Islamists.

The Al Qaeda-affiliated Al Nusra Front have sent an ultimatum to the rival Islamic State of Iraq and Syria (ISIS) to cease killing fellow rebels or face "expulsion" from Syria.

ISIS have waged a bloody campaign against fellow rebels, whom they regard as being insufficiently devout, and are widely suspected to be responsible for the killing of Suri. They have become known for the brutal enforcement of their extreme interpretation of Islamic law in the territory they control.

While Julani admitted that some Syrian rebel groups were guilty of "takfir" (unbelief), he accused ISIS of indiscriminately killing rebels and labelling them all as takfir.

Infighting between the Syrian rebel groups has intensified in recent months, with ISIS and Al Nusra severing links and fighting one another for territory. While Al Nusra have tried to build links with other rebel groups, including more secular ones, ISIS have focused on religious purity and stamping out more moderate voices.

US Backing Al Qaeda "Moderates"

That's right. McCain wants more US weapons for Syria, perhaps even a US invasion (when dealing with war-mongers it is usually correct to assume war is the real goal).

Yet, those weapons either go straight into the hands of Al Qaeda or eventually end up in Al Qaeda hands anyway.

This is precisely the idiocy of the policy "The enemy of my enemy is my friend". Supporting the overthrow of one corrupt regime for another corrupt regime typically makes matters worse.

Clear Policy Statement

The US needs a clear, consistent, easily explained policy on Syria.

And I can sum it up in two words "stay out".

If we supply arms and the Syrian government falls, the next government is likely to be run by Al Qaeda or militant extremists, and McCain and his ilk will be back at it, hoping to overthrow the next government, or worse yet, invade Syria to impose our will.

Clearly, the only winning option is to not get involved.

How Do Warmongers Get Elected?

Given that it's crystal clear that involvement is a losing option, some might wonder: "How Do Warmongers Get Elected?"

Here's the easy to understand explanation: The "offense" industry supports any and every candidate that supports war. If you are a candidate against war, the "offense" industry will label you "weak on defense", then toss massive amounts of campaign money at your opponent.

Democrat-sponsored pro-union advocates get elected the same way. In fact, it is difficult to get elected if you do not take campaign bribes.

This explains why those on the outside want campaign finance reform. But, once elected, bribes come in from every corner. The newly-elected want to stay in power so they too take bribes. Campaign finance reform dies in the process every time.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Outrageous but Highly Believable Rumor Involving Syria, Turkey, Kerry

Posted: 28 Mar 2014 10:03 AM PDT

Normally I stay far away from the rumor mill. Typically, most rumors turn out to be false.

However, actions in Turkey suggest at least some substance to this rumor. Moreover, it's entirely believable. First let's tune in to what Bloomberg reports (which I also commented on yesterday).

Please consider Turkey Blocks YouTube After Syria Incursion Plans Leaked

Turkey defended its decision to block YouTube after a leaked recording of a meeting where top officials discussed a possible military incursion into Syria appeared on the site.

Foreign Minister Ahmet Davutoglu today equated the leak to an "attack on Turkey's borders" in an interview with NTV television. Davutoglu said he had chaired the meeting with the head of national intelligence and other military and diplomatic officials to discuss how to respond to threats by Islamist militants against an enclave of Turkish territory inside Syria. Some sections of the tape were "doctored," the foreign ministry said in a statement yesterday.

The leaked tape is the latest in a series of recordings posted anonymously on the Internet since December, some of them allegedly from a police investigation, which have embroiled Prime Minister Recep Tayyip Erdogan in a corruption scandal and led to the departure of four cabinet ministers. It comes before weekend local elections, where Erdogan is seeking a victory that he says will lay to rest the allegations of graft.

Under fire since the corruption investigation burst into the open in December, he has purged dozens of prosecutors and thousands of police, as well as imposing media curbs. Yesterday's YouTube shutdown follows similar measures against Twitter last week. The government says some of the recordings were assembled by montage.

What We Know

The above is what is claimed by Erdogan and discussed by Bloomberg. We do know that Erdogan tried to shut down Twitter (but failed), and he did shut down YouTube.

He also called the leak an act of treason and refused to let media even discuss the allegation. What follows is the rumor.

Turkey Transcript

Here is the alleged Turkey Transcript involving a plot to invade Syria.

Select Quotes

Hakan FİDAN: But hear me out, we know how to put two and to together. Now, we know that what happens there has no real strategic value for us, besides the political outward appearance and whatever. Now, if we are going to enter a war, let us plan this beforehand and do it. Now, I..

Yaşar GÜLER: That's what we've been saying since the beginning.

THE FIFTH SCREEN

Hakan FİDAN: Now, what I can't accept is this: we are accepting the risk of using weapons for the sake of the Tomb of Suleiman Shah. It's 10 acres of our country's land and we are accepting to risk a war for it, for the *thing* of our 22-28 soldiers over there, for God's sake, how many kilometers of this country's land lie on the Syrian border? And we don't risk a war for for thousands of kilometers of land and the lives of millions of people? That's not logical! If we are going to use weapons, let's do it from the beginning. If these guys pose a threat..

THE SIXTH SCREEN

Ahmet DAVUTOĞLU: Keep this between us, but the Prime Minister told me on the phone that in this conjuncture, we count this (the proposed false flag attack on the Tomb of Suleiman Shah) amongst our options.

Hakan FİDAN: Commander, if we really need a reason, I'll send 4 guys to the other side, I'll get them to launch 8 rockets at empty places. That's no problem! If we need a reason, we can produce it. The thing is to show a mutual will for that. We are exerting a will for war here, and nevertheless we are making the same mistake as we always do, the mistake of not being able to think properly.

Feridun SİNİRLİOĞLU: I'll tell you this, it's 10 acres of land. 10 acres of land is a very strong casus belli in the international jurisprudence, also for justification if we do this operation against the ISIL, we'll have the entire world behind us. Have no worries about that.

THE SEVENTH SCREEN

Feridun SİNİRLİOĞLU: We need justification, justification.

Hakan FİDAN: I told you, I can produce justification if need be. Justification is no problem.

THE EIGHTH SCREEN

Ahmet DAVUTOĞLU: Many a times I've had amicable conversations with Kerry, he asked me precisely about whether we've agreed on a final decision on this strike..
....
This is translated by Doğukan Piyale. I am probably putting my life at risk, but the State never runs out of assassins, so if I'm going to die, I'm going to die anyway. I just wanted to serve the international community and my people by letting everyone know about these warmongering bastards.

Entirely Believable

I do not know whether that is an accurate translation of a real tape or not. But the fact is, it is entirely believable.

Moreover, shutting down YouTube, and then banning media discussion of the tape, while calling its release an act of treason, lends further credence to the rumor.

True or not, that something of this nature could be so easily believable says a ton about the corrupt state of global politics.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Are You Minding the Curves? Sweet Spot is Likely Not Where You Think

Posted: 28 Mar 2014 12:16 AM PDT

Curve Watcher's Anonymous has its eye on the yield curve again.

Over the course of the last year, and except for the close front-end, US treasury yields have risen across the board, and in some cases dramatically. This is what one would expect from a tapering Fed that is also discussing rate hikes.

However, the action in the last three months is not what one would expect.

click on any chart for sharper image

In the past year, 5-year treasuries have been hit the hardest (sharpest yield increase). That is not what one might expect from a strong recovery. And certainly a drop in the 30-year long bond is not what one would typically expect either.

Typically, when the Fed starts hiking or announces intention to hike, the long end of the curve changes the most. It did, until the beginning of the year. The following charts will help put things in perspective.

Yield Curve as of 2014-03-28 Monthly

The above chart shows monthly "closes" where the yield was at the end of the month. The current month shows the present value.

Yield Curve as of 2014-03-28 Weekly

The above chart shows weekly "closes" where the yield was at the end of each week. The current week shows the present value.

Symbols

$TYX: 30-Year Green
$TNX: 10-Year Orange
$FVX: 05-Year Blue
$IEX: 03-Month Brown

Since the beginning of the year, the middle and long portion of the yield curve has flattened dramatically.

The "sweet spot" for investors has been the long end of the curve. Those hiding in 5-year treasuries have been hit the hardest.

Given the Fed is holding the low end of the curve near zero, the typical inversion one sees in the yield curve preceding a recession is not going to happen. We could see the 5-10 spread invert but that would take some doing.

Regardless, this flattening of the curve is certainly not a sign of a strong recovery. Given blatant Fed yield curve manipulation, this may be as close to a recession warning that we get.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com