Felix Salmon on debt ceilings and yield curves

I've watched the ongoing silliness from afar without commenting much, partly because for the most part it all falls outside the brief of this humble corner of cyberspace (possible exception the effect on gold) but largely because far better brains have been obsessing about it all and there's oodles to read already.

However this note by Felix Salmon on what can be read into recent changes in the yield curve is particularly good and worthy of a shout-out, because it manages to synthesize just about everything you need to know about the issue in one fairly easy to read lump. Here's how it concludes, full agreement from this desk:

"And this I think is what we’re really seeing in the yield curve. Never mind twitches at the very short end — look at the speed with which long-term rates are going down. That’s a sign of pessimism about long-term U.S. growth — an indication that Congressional failure to raise the debt ceiling will hobble the economy for the next decade. Thanks, guys."

READ IT ALL HERE