Running out of steam

This morning Bill Gross posted his newest installment of his blog. In it, he claims that because rates are so low in and absolute sense, the yield curve will need to flatten less in absolute terms to be associated with past recessions. This is because so many have taken on large amounts of debt, especially of the shorter vintage. This will make monthly debt service more difficult to pay. So, with the massive amount of share buybacks that were financed with debt over the past decade, we may be in for a bumpy ride.

            Finally a breath of fresh air for those who weren’t on the “Load up! Rates are so low!” train.

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