Expectations about inflation/deflation are a critical factor for handicapping the future in terms of broad price trends, as we discussed in the previous post. Hold that thought as you consider that 5-year inflation-indexed Treasuries sold at a negative yield for the first time, according to Bloomberg.
Daily Archives: October 25, 2010
THINKING ABOUT DEFLATION
It’s important to distinguish between “good” and “bad” deflation, the former being a byproduct of improved technology, higher productivity, and other factors that can generally be lumped under the heading of “progress.” Bad deflation, by contrast, is the blowback from a shock of one form or another that produces a financial crisis, such as the one that occurred in 2008.
READING ROOM FOR MONDAY: 10.25.2010
►Wall Street focuses on the ‘three Es.’
Julianne Pepitone/CNNMoney/Oct 24
Investors are bracing for an onslaught of news this week: The earnings avalanche continues, midterm elections are approaching and economic data are due in a bunch of sectors. Those “three Es” are a lot for investors to digest individually, and this week’s triple-whammy could bring volatility to a market that’s been behaving somewhat normally.