A yield curve like this is "usually" not good for stocks (going back 30 years). A flight to quality with attendent credit concerns and a well-publicized liquidity injection of funds from the ECB (allowing levered positions in the U.S. seeking safe haven from Reg T.)that was, um..."deft".
Observe the short end of the curve dear reader in the past 48 hours...
Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr
08/08/07 5.04 4.95 5.01 4.89 4.64 4.64 4.69
08/09/07 4.70 4.81 4.86 4.74 4.49 4.51 4.58
Now...THAT is good old-fashioned curve steepening!
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