No Happy Ending in Obamanomics

Despite the prognostications of those who have been saying since 2009 that the economy is “finally” on the mend, there is very little data to support the contention. Quite the contrary: There is a lot of data to support the idea that we have an economy that has had no development in either plot or character for two decades.

Periodically I trot out the numbers— unemployment, jobs, GDP, CPI— and discuss the cold, hard facts that liberals and central bankers (same-same) refuse to face: This economy does not reflect either the traditional strengths or the historical resilience of the American economic system. I get tired of this exercise, however, because the story hasn’t changed much in 20 to 30 years, and the liberals— both Dems and GOP— who created the mess won’t change policies, laws or expectations to set things right.

But there is a set of experts who refuse to be duped.

These are experts who’s very livelihood is dependent on being in touch with the real economy in a way that means dollars-and-cents every day. Specially I’m talking about those investors who trade the ten-year U.S. Treasury note.

As the benchmark note for interest rates, the direction on the ten-year Treasury for the last ten years tells a very bad story. It’s a story that has not yet had a happy ending. It’s a story that’s still a cliffhanger, like a false ending in a Die Hard movie, where the bad guy isn’t dead yet, but everyone thinks he is. But unlike a Hollywood drama, this story is not going by the script, and no matter how many rewrites happen, there is a lot of telling detail that says we could face another financial mass casualty event.

“If you say in the first chapter that there is a rifle hanging on a wall,” said the Russian novelist and playwright Anton Chekov, “in the second or third chapter it absolutely must go off. If it’s not going to be fired, it shouldn’t be hanging there.”

Let’s look the gun that so obvious to Treasury traders.

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