Tim adds: “Now, this isn’t exactly the same as the rates at which banks lend to each other but it does give us a useful little clue as to what is happening.”

Err, “a” silly statement? And no mention of big swinging dicks (he mentions them more than once: I think the man has issues).

Reading his piece today, I knew Larry, dear dear Larry, would bring you out of retirement and back to making a post. I just knew it.

“although it can happen that the yield curve inverts”

And this normally a prediction of recession to come. Which it’s done fairly well this time too. Let us go back to Roger Bootle writing in 2006:

http://www.telegraph.co.uk/finance/2933047/Economic-Agenda-What-is-the-yield-curve-telling-us.html

Roger is quite temperate in his doom and gloom forecasts (he came in for some awful stick for predicting a housing market crash). Ambrose plays Cassandra more faithfully:

http://www.telegraph.co.uk/finance/comment/2940848/Monday-view-Storm-clouds-gather-over-a-US-economy-heading-for-icebergs.html

So the next time you hear someone say “no-one predicted this recession”, you need to say “bollocks” and point them at Roger and Ambrose. Archived on the net for all to see.

http://www.flickr.com/photos/mjtphotos/3814425672/

Tim adds: “historically the mortgage rate has followed the Boe Base Rate (or 3m money market rate) much more closely than the 10yr yield.”

Err, yes, because fixed rate mortgages are a relatively new innovation in the UK market. Last decade and a bit really……