Friday, July 1, 2011

The Treasury curve is getting steep

Lots of aggregates are appearing at the short end, is that what I said? If I ran my Huffamn encoder over the total Treasury market, then it would quantize hard along the short end, meaning deliverables due in six months to three years are dominating the market. They appear because they are unattended by the market, a lack of volatility.

The market responds with production at the short end, but fewer points of arbitrage, a rank contraction. The an attempt at expansion later down the road, resulting in another fgain of steepness, then repeat.

Out political system is now dominated by events that happen woth three and sx month frequency. Treasury is under stress, so the market focuses more on Treasury events that it would otherwise let pass, debt veiling, state budget dramas. We say the market is event driven, it is. The market is constrained to solutions surrouding queuing events, it is -iLog(i), constrained, rate driven like a quantized production system.

Network Theory:

Is government distribution rate synchronous with some major constrained channel? Or, is the F series that makes up government goods constructed from the prime factors in the constrained channel? The smooth normed math would ask about covariance in the continuous power spectrum, nut in reality the basis set is not continuous.

No comments: