Yield Curve Quotes

I am a cutter, you see. Also a snipper, a slicer, a carver, a jabber. I am a very special case. I have a purpose. My skin, you see, screams. It's covered with words - cook, cupcake, kitty, curls - as if a knife-wielding first-grader learned to write on my flesh. I sometimes, but only sometimes, laugh. Getting out of the bath and seeing, out of the corner of my eye, down the side of a leg: babydoll. Pull on a sweater and, in a flash of my wrist: harmful. Why these words? Thousands of hours of therapy have yielded a few ideas from the good doctors. They are often feminine, in a Dick and Jane, pink vs. puppy dog tails sort of way. Or they're flat-out negative. Number of synonyms for anxious carved in my skin: eleven. The one thing I know for sure is that at the time, it was crucial to see these letters on me, and not just see them, but feel them. Burning on my left hip: petticoat. And near it, my first word, slashed on an anxious summer day at age thirteen: wicked. I woke up that morning, hot and bored, worried about the hours ahead. How do you keep safe when your whole day is as wide and empty as the sky? Anything could happen. I remember feeling that word, heavy and slightly sticky across my pubic bone. My mother's steak knife. Cutting like a child along red imaginary lines. Cleaning myself. Digging in deeper. Cleaning myself. Pouring bleach over the knife and sneaking through the kitchen to return it. Wicked. Relief. The rest of the day, I spent ministering to my wound. Dig into the curves of W with an alcohol-soaked Q-tip. Pet my cheek until the sting went away. Lotion. Bandage. Repeat.

I have heard it called a dance, I have heard it called a battle. Some men speak of it with a knowing laugh, some with a sneer. I have heard the study market women chuckling over it like hens clucking over bread crumbs; I have been approached by bawds who spoke their wares as boldly as peddlers hawking fresh fish. For myself, I think some things are beyond words. The color blue can only be experienced, as can the scent of jasmine or the sound of a flute. The curve of a warm bared shoulder, the uniquely feminine softness of a breast, the startled sound one makes when all barriers suddenly yield, the perfume of her throat, the taste of her skin are all but parts, and sweet as they may be, they do not embody the whole. A thousand such details still would not illustrate it.

If there is a lot of matter, gravity will cause space to curve back on itself, yielding the spherical shape. If there is little matter, space is free to flare outward in the Pringles shape. And if there is just the right amount of matter, space will have zero curvature.*

I watched the water swirl away entirely before I twisted my head to look at him. His fingers were gentle, but firm where he’d fisted them in my hair. “You never failed them,” I rasped. “I did … horrible things to ensure that.” Those violet eyes near-glowed in the dim light. “So did I.” My sweat clung like blood—the blood of those two faeries— I pivoted, barely turning in time. His other hand stroked long, soothing lines down the curve of my back, as over and over I yielded my dinner. When the latest wave had ebbed, I breathed, “The flames?” “Autumn Court.” I couldn’t muster a response. At some point, I leaned against the coolness of the nearby bathtub and closed my eyes. When I awoke, sun streamed through the windows, and I was in my bed—tucked in tightly to the fresh, clean sheets.

We don't know what's going on here. If these tremendous events are random combinations of matter run amok, the yield of millions of monkeys at millions of typewriters, then what is it in us, hammered out of those same typewriters, that they ignite? We don’t know. Our life is a faint tracing on the surface of mystery, like the idle, curved tunnels of leaf miners on the face of a leaf. We must somehow take a wider view, look at the whole landscape, really see it, and describe what’s going on here. Then we can at least wail the right question into the swaddling band of darkness, or, if it comes to that, choir the proper praise.

short-term interest rates above long-term rates (which was called “inverting the yield curve”). Every time that happened, inflation-hedged assets and the economy went down. But Bunker

Of course, it is not so easy to “falsify,” i.e., to state that something is wrong with full certainty. Imperfections in your testing method may yield a mistaken “no.” The doctor discovering cancer cells might have faulty equipment causing optical illusions; or he could be a bell-curve-using economist disguised as a doctor. An eyewitness to a crime might be drunk. But it remains the case that you know what is wrong with a lot more confidence than you know what is right. All pieces of information are not equal in importance. Popper introduced the mechanism of conjectures and refutations, which works as follows: you formulate a (bold) conjecture and you start looking for the observation that would prove you wrong. This is the alternative to our search for confirmatory instances. If you think the task is easy, you will be disappointed—few humans have a natural ability to do this. I confess that I am not one of them; it does not come naturally to me.*

It could be that God has not absconded but spread, as our vision and understanding of the universe have spread, to a fabric of spirit and sense so grand and subtle, so powerful in a new way, that we can only feel blindly of its hem. In making the thick darkness a swaddling band for the sea, God ‘set bars and doors’ and said, ‘hitherto shalt thou come, but no further.’ But have we come even that far? Have we rowed out to the thick darkness, or are we all playing pinochle in the bottom of the boat? Cruelty is a mystery, and the waste of pain. But if we describe a world to compass these things, a world that is a long, brute game, then we bump up against another mystery: the inrush of power and light, the canary that sings on the skull. Unless all ages and races of men have been deluded by the same mass hypnotist, there seems to be such a thing as beauty, a grace wholly gratuitous. If these tremendous events are random combinations of matter run amok, the yield of millions of monkeys at millions of typewriters, then what is it in us, hammered out of those same typewriters, that they ignite? Our life is a faint tracing on the surface of mystery, like the idle, curved tunnels of leaf miners on the face of a leaf. We must somehow take a wider view, look at the whole landscape, really see it, and describe what’s going on here. Then we can at least wail the right question into the swaddling band of darkness, or, if it comes to that, choir the proper praise.

Space is cold and stiff, but Time is alive. Space divides, but Time brings everything to everything else. It does not course outside of you and you do not swim upon it like a drifting log. Time flows through you: you yourself are in flow. You are the river. Are you grieving? Trust Time: soon you will be laughing. Are you laughing? You cannot hold fast your laughing, for soon you will be weeping. You are blown from mood to mood, from one state to another, from waking to sleeping and from sleeping again to waking. You cannot go on wandering for long. You come to a halt, you are tired, you are hungry, you must sit down, you eat, you stand again, you begin anew to wander. You suffer: from the distance unattainable, you glimpse the Deed which you long. But the stream is constantly moving you and one morning the hour of action has arrived. You are a child, and never (so you think) will you escape the helplessness of childhood, which locks you into four windowless walls. But look: your wall itself movable and yielding, and your whole being becomes re-fashioned into a youth. From within yourself there rise hidden springs that leap up to yourself. Posibilities open up before you like flowers, and one day the world has grown all around you. Softly, Time transports you from one curve to another. New vistas and horizons unfold at your side as you pass by. You begin to love the change: you've discovered an extraordinary adventure is afoot. You sense a direction, you feel a new impulse, you can smell the sea. And you see that what changes in you changes also in everything around you. Every point you hurriedly pass by is itself in movement. Every point is being whirled in some direction: its own long history is following its course: but each point knows the ending of its history no more than you know that of yours. You glance up to heaven, Sublime is the rotation of its suns, but these are each heavily laden with their planetary systems as with grapes, and they dash away from one another into already-prepared distances and unfathomable spaces. You smash atoms and they swarm about in more confusion that if you had stamped your foot on an anthill. You seek a mainstay and a temperament law in the temperate mid-region of our earth, but here, too, there is nothing but constant event changing history, and no one can forecast for you even next week's clouds.

The differences in their bodies were startling, he was unbending everywhere that she was yielding, and yet she fit perfectly against him. All of her curves hugged all of the right places of his rock-solid frame.

When required to work for set wages for a certain amount of time at work (i.e., a fixed-interval schedule, where one merely has to wait a certain amount of time before a single response will bring a reward), they tend to work slowly during the first part of the interval, gradually increasing behavioral output as “paytime” arrives (yielding a scalloped curve). When placed on variable-ratio and variable-interval schedules, where things are unpredictable (as in Las Vegas), animals work at constant steady rates, but the rates are substantially faster with variable-ratio schedules (just the way profiteers in Las Vegas want us to behave when playing one-armed bandits). Both humans and animals work in about the same way on such schedules. Unfortunately, behaviorism provided no cogent mechanistic explanation of why and how the brain generates such consistent learned behavior patterns.

The natural world is more recognizable and identifiable in its unaffected replies and usual predictability. This genuineness does have residual seepage observable in the surreal world of humanity as well, in instances where nature or a natural reality is observed in experience with an impassioned, ephemeral detection and the entirety of the world is shortly exposed as still living, composed of material, substance, texture and essence beyond the normalized human exposure of chosen limits of sensitivities, of closing endpoints of understanding, of illusory trickeries of senses, bewildering connotations of truth, and prospering beliefs in a newer, grander realism of self and the world without vital appreciation of a contextual reckoning of proportionality embedded within the curving, yielding designs of universal scales.” “Aspergic tendencies can establish a lifelong process of rebellious, reciprocated self-learning and self-teaching, whether the lessons taught are from oneself or insightful others during watchful experiences seeking new, keen-sighted inspirations to be marked by patterned, humorously strange and unexpectedly connected presences. It makes an individual believe in a perceived world which exists better in the enactions of others, while the real world of behaving, sensing and seeing a differently textured reality becomes an alleged fantasy.” “To an aspergic personality, allistic normalcy can be an enthrallment contrary to a naturally minded quest for equilibrium as a relationship with all reality. There can be guilt over one’s own social inadequacy. Inane separation can come from not wanting to impose such great exertion requirements on most others for the sake of a singular attending identity.” “As with multitudes of peoples under clever and hard-fought capitulation, nature quietly must adhere and defer to the idea of the perfect fusion of mind and body as fitting the successes of humanity accidentally shaped as the dualistic and sensitive personification of celestial, god-imaged spirituality within the universe.

There was only the memory of Cassandra's sweet, yielding mouth, the lush curves of her body molding perfectly to his. Like a melody that kept repeating itself throughout a symphony, she was his idée fixe, haunting him whether dreaming or awake. Everything demanded that he chase Cassandra, do whatever was necessary to win her. But if he succeeded, he would destroy everything that made her worth having.

To successfully launch a product, generic drug companies must tread in reverse through this obstacle course. Once a generic company zeroes in on a molecule, and its scientists figure out how it operates in the body, its lawyers get to work to establish how well protected it is legally. The next step takes place in the laboratory: developing the active pharmaceutical ingredient by synthesizing it into ingredient form. That alone can take several years of trial and error. Once successful, the finished generic has to take the same form as the brand, whether that be pill, capsule, tablet, or injection. Formulating it requires additional ingredients known as excipients, which can be different, but might also be litigated. Then comes testing. In the lab, the in-vitro tests replicate conditions in the body. During dissolution tests, for example, the drug will be put in beakers whose contents mimic stomach conditions, to see how the drugs break down. But some of the most important tests are in-vivo—when the drug is tested on people. Brand-name companies must test new drugs on thousands of patients to prove that they are safe and effective. Generic companies have to prove only that their drug performs similarly in the body to the brand-name drug. To do this, they must test it on a few dozen healthy volunteers and map the concentration of the drug in their blood. The results yield a graph that contains the all-important bioequivalence curve. The horizontal line reflects the time to maximum concentration (Tmax) of drug in the blood. The vertical line reflects the peak concentration (Cmax) of drug in the blood. Between these two axes lies the area under the curve (AUC). The test results must fall in that area to be deemed bioequivalent. Every batch of drugs has variation. Even brand-name drugs made in the same laboratory under the exact same conditions will have some batch-to-batch differences. So, in 1992, the FDA created a complex statistical formula that defined bioequivalence as a range—a generic drug’s concentration in the blood could not fall below 80 percent or rise above 125 percent of the brand name’s concentration. But the formula also required companies to impose a 90 percent confidence interval on their testing, to ensure that less than 20 percent of samples would fall outside the designated range and far more would land within a closer range to the innovator product.

One week before my wedding day, upon returning to my hotel room with a tube of borrowed toothpaste, I find a small bird waiting inside the area called the antechamber and know within moments it is my grandmother. I recognize the glittering, hematite eyes, the expression of cunning disapproval. The odor of a gym at close of day encircles her. What is the Internet? the bird says, does not say. Her head is the color of warning: sharp curve, yield-yellow. The eyes on either side of the Cro-Magnon crown are lined the way hers were in shoddy cornflower pencil as if to say, Really look, here. Her hair, that had throughout her life hurled silvery messages skyward, has been replaced by orderly, navy stripes that emanate down her pate like ripples in silk. Under the beak where her unpronounced chin would have been, four regal feathers pose, each marked by an ebony dot. She hovers inches above the sofa’s back, chastened and restless by her new form. The toothpaste lands with a dull thud on the carpet. I’m silent when stunned. No getting me to talk. What is the Internet? my grandmother the bird insists, speaking as if we are in the middle of a conversation, which, in a way, we are. She had called to ask this question ten years before. At the time I considered explaining the technological phenomenon, but she was so old.

Christopher went still. After a long hesitation, she heard him ask in a far more normal voice, “What are you doing?” “I’m making it easier for you,” came her defiant reply. “Go on, start ravishing.” Another silence. Then, “Why are you facing downward?” “Because that’s how it’s done.” Beatrix twisted to look at him over her shoulder. A twinge of uncertainty caused her to ask. “Isn’t it?” His face was blank. “Has no one ever told you?” “No, but I’ve read about it.” Christopher rolled off her, relieving her of his weight. He wore an odd expression as he asked, “From what books?” “Veterinary manuals. And of course, I’ve observed the squirrels in springtime, and farm animals, and--” She was interrupted as Christopher cleared his throat loudly, and again. Darting a confused glance at him, she realized that he was trying to choke back amusement. Beatrix began to feel indignant. Her first time in a bed with a man, and he was laughing. “Look here,” she said in a businesslike manner, “I’ve read about the mating habits of over two dozen species, and with the exception of snails, whose genitalia is on their necks, they all--” She broke off and frowned. “Why are you laughing at me?” Christopher had collapsed, overcome with hilarity. As he lifted his head and saw her affronted expression, he struggled manfully with another outburst. “Beatrix. I’m…I’m not laughing at you.” “You are!” “No I’m not. It’s just…” He swiped a tear from the corner of his eye, and a few more chuckles escaped. “Squirrels…” “Well, it may be humorous to you, but it’s a very serious matter to the squirrels.” That set him off again. In a display of rank insensitivity to the reproductive rights of small mammals, Christopher had buried his face in a pillow, his shoulders shaking. “What is so amusing about fornicating squirrels?” Beatrix asked irritably. By this time he had gone into near apoplexy. “No more,” he gasped. “Please.” “I gather it’s not the same for people,” Beatrix said with great dignity, inwardly mortified. “They don’t go about it the same way that animals do?” Fighting to control himself, Christopher rolled to face her. His eyes were brilliant with unspent laughter. “Yes. No. That is, they do, but…” “But you don’t prefer it that way?” Considering how to answer her, Christopher reached out to smooth her disheveled hair, which was falling out of its pins. “I do. I’m quite enthusiastic about it, actually. But it’s not right for your first time.” “Why not?” Christopher looked at her, a slow smile curving his lips. His voice deepened as he asked, “Shall I show you?” Beatrix was transfixed. Taking her stillness as assent, he pressed her back and moved over her slowly. He touched her with care, arranging her limbs, spreading them to receive him. A gasp escaped her as she felt his hips settle on hers. He was aroused, a thick pressure fitting against her intimately. Bracing some of his weight on his arms, he looked down into her reddening face. “This way,” he said, with the slightest nudge, “…is usually more pleasing to the lady.” The gentle movement sent a jolt of pleasure through her. Beatrix couldn’t speak, her senses filled with him, her hips catching a helpless arch. She looked up at the powerful surface of his chest, covered with a tantalizing fleece of bronze-gold hair. Christopher lowered further, his mouth hovering just over hers. “Front to front…I could kiss you the entire time. And the shape of you would cushion me so sweetly…like this…” His lips took hers and coaxed them open, wringing heat and delight from her yielding flesh. Beatrix shivered, her arms lifting around his neck. She felt him all along her body, his warmth and weight anchoring her.

You didn’t lost control,” she whispered. “I did, during parts of it.” His voice was that of a man who had just awakened after a long sleep. He began to gather the disparate streams of her hair into a single river. “Did you plan this?” “You’re asking if I deliberately set out to seduce you? No, it was entirely spontaneous.” At his silence, Beatrix lifted her head and grinned down at him. “You probably think I’m a hussy.” His thumb edged the swollen curve of her lower lip. “Actually, I was thinking about how to get you upstairs to the bedroom. But now that you mention it…you are a hussy.” Her grin lingered as she nipped playfully at the tip of his thumb. “I’m sorry for having set you off earlier. Cam is going to work with the horse from now on. I’ve never had to answer to anyone before--I’ll have to get accustomed to it.” “Yes,” he said. “Starting now.” Beatrix might have protested his autocratic tone, except there was still a dangerous glint in his eyes, and she understood that he was chafing just as she was. He wasn’t comfortable with any woman having such power over him. Very well. She would certainly not be submissive to him in all things, but she could yield to him on a few points. “I promise to be more careful from now on,” she said. Christopher didn’t smile, precisely, but his lips took on a wry curve.

Christopher came up behind her. As Beatrix turned to face him, he searched her face with a gently quizzical gaze. “If you like, we can spend our first night together here,” he said. “But if this doesn’t suit you, we’ll go to Phelan House.” Beatrix could hardly speak. “You did this for me?” He nodded. “I asked Lord Westcliff if we might stay the night here. And he had no objections to a little redecorating. Do you--” He was interrupted as Beatrix flung herself at him and wrapped her arms tightly around his neck. Christopher held her, his hands coursing slowly over her back and hips. His lips found the tender skin of her cheeks, her chin, the yielding softness of her mouth. Through the descending diaphanous layers of pleasure, Beatrix answered him blindly, taking a shivering breath as his long fingers curved beneath her jaw. He shaped her lips with his own, his tongue questing gently. The taste of him was smooth and subtle and masculine. Intoxicating. Needing more of him, she struggled to draw him deeper, to kiss him harder, and he resisted with a quiet laugh. “Wait. Easy…love, there’s another part of the surprise that I don’t want you to miss.” “Where?” Beatrix asked drowsily, her hand searching over his front. Christopher gave a muffled laugh, taking her by the shoulders and easing her away. He stared down at her, his gray eyes glowing. “Listen,” he whispered. As the thrumming of her own heart quieted, Beatrix heard music. Not instruments, but human voices joined in harmony. Bemused, she went to the window and looked out. A smile lit her face. A small group of officers from Christopher’s regiment, still in uniform, were standing in a row and singing a slow, haunting ballad. Were I laid on Greenland’s coast, And in my arms embrac’d my lass; Warm amidst eternal frost, Too soon the half year’s night would pass. And I would love you all the day. Ev’ry night would kiss and play, If with me you’d fondly stray. Over the hills and far away… “Our song,” Beatrix whispered, as the sweet strains floated up to them. “Yes.

As he turned her face to study her, he said, “You have more courage than you have strength, Yellow Hair. It is not wise to fight when you cannot win.” Looking up at his carved features and the arrogant set of his mouth, she longed for the strength to jerk him off his horse. He wasn’t just taunting her, he was challenging her, mocking her. “You will yield. Look at me and know the face of your master. Remember it well.” Riding high on humiliation, Loretta forgot Amy, Aunt Rachel, everything. An image of her mother’s face flashed before her. Never, as long as she had life in her body, would she yield to him. She worked her parched mouth and spat. Nothing came out, but the message rang clear. “Nei mah-heepicut!” Releasing her, he struck her lightly on the arm. Wheeling his horse, he glanced toward the windows of the house and thumped his chest with a broad fist. “I claim her!” Loretta staggered, watching in numb disbelief as Hunter pranced his stallion in a circle around her. I claim her? Warily she turned, keeping him in sight, unsure of what he might do. He rode erect, his eyes touching on her dress, her face, her hair, as if everything about her were a curiosity. A taunting smile curved his mouth. His attention centered on her full skirt, and she could almost see the questions churning in his head. He repositioned his hand on the lance. The determination in his expression filled her with foreboding. He rode directly toward her, and she sidestepped. He turned his mount to come at her again. As he swept by he leaned forward, catching the hem of her skirt with his lance. Loretta whirled, striking out with her forearms, but the Indian moved expertly, his aim swift and sure, his horse precision-trained to the pressure of his legs. He was as bent on seeing her undergarments as she was on keeping them hidden. The outcome of their battle was a foregone conclusion, and Loretta knew it. His friends encouraged him, whooping with ribald laughter each time her ruffles flashed. She snatched the dirty peace flag from the wooden shaft and threw it to the earth, grinding it beneath the heel of her shoe. After fending off several more passes, exhaustion claimed its victory, and Loretta realized the folly in fighting. She stood motionless, breasts heaving, her eyes staring fixedly at nothing, head lifted. The warrior circled her, guiding his stallion’s flashing hooves so close to her feet that her toes tingled. When she didn’t move, he reined the horse to a halt and studied her for several seconds before he leaned forward to finger the bodice of her dress. Her breath snagged when he slid a palm over her bosom to the indentation of her waist. “Ai-ee,” he whispered. “You learn quick.” Raising tear-filled eyes to his, she again spat in his face. This time he felt the spray and wiped his cheek, his lips quivering with something that looked suspiciously like suppressed laughter, friendly laughter this time. “Maybe not so quick. But I am a good teacher. You will learn not to fight me, Yellow Hair. It is a promise I make for you.

Just before Thanksgiving, I met with Bunker Hunt, then the richest man in the world, at the Petroleum Club in Dallas. Bud Dillard, a Texan friend and client of mine who was big in the oil and cattle businesses, had introduced us a couple of years before, and we regularly talked about the economy and markets, especially inflation. Just a few weeks before our meeting, Iranian militants had stormed the U.S. embassy in Tehran, taking fifty-two Americans hostage. There were long lines to buy gas and extreme market volatility. There was clearly a sense of crisis: The nation was confused, frustrated, and angry. Bunker saw the debt crisis and inflation risks pretty much as I saw them. He’d been wanting to get his wealth out of paper money for the past few years, so he’d been buying commodities, especially silver, which he had started purchasing for about $ 1.29 per ounce, as a hedge against inflation. He kept buying and buying as inflation and the price of silver went up, until he had essentially cornered the silver market. At that point, silver was trading at around $ 10. I told him I thought it might be a good time to get out because the Fed was becoming tight enough to raise short-term interest rates above long-term rates (which was called “inverting the yield curve”). Every time that happened, inflation-hedged assets and the economy went down. But Bunker was in the oil business, and the Middle East oil producers he talked to were still worried about the depreciation of the dollar. They had told him they were also going to buy silver as a hedge against inflation so he held on to it in the expectation that its price would continue to rise. I got out.

Mr. Keir MacRae Lady Merritt Sterling The names had been typed... but why?... what for?... Bits and pieces of memory whirled in his head... thoughts wheeling just beyond reach. As he struggled blindly to catch hold of something, make sense of the tumult, he heard Merritt's voice... stay for one night just one... and there was the smell of rain and the cool darkness of night, and the warmth of a bed... the tender plump curves of a woman's breasts, and the hot clasp of her body pulling at him, squeezing in voluptuous pulsation, and the sweet, wracking culmination as she cried out his name. And there was the sight of her in candlelight, flames dancing in guttering pools of wax, catching glimmers from her eyes, hair, skin... and the glorious freedom of yielding everything, telling her everything, while inexhaustible delight welled around them. And the despair of leaving, the physical pain of putting distance between them, the sensation of being pulled below the surface of the sea, looking up from airless depths to an unreachable sky. Lady Merritt's fingertips pressing a typewriter key. Tap. Tap. Tiny metal rods flicked at a spool of inked ribbon, and letters emerged. Keir was panting now, clutching the slip of paper, while his brain sorted and spun, and pin tumblers aligned, a key turned, and something unlocked. "Merry," he said aloud, his voice unsteady. "My God... Merry.

They do not become more roundabout, because they refrain from investing in capital that will not show returns for a period of time (or a period when the interest rate has not been lowered as much as shorter-term rates). Thus there is a hyperfocus on—and even addiction to—the yields of stocks and other risky and high-duration securities (a “maturity-mismatch”); there is an irrepressible allure to the steep yield curve.

She lay motionless for a moment with her eyes closed and her breathing rapid and heavy while my lips caressed her throat and descended slowly to the brazen fullness of her bare breasts, my fingertips gentle against the smooth firmness of her thigh and the swelling curve of her hip, and then her fingers dug into my shoulders when my mouth found hers again, and she pressed her teeth into my lips as I caressed the soft, warm, myriad-curved length of her, and then there was only the intimate caress of her tongue against mine, and her fingers clutching at my flesh, and her yielding body writhing against me. I turned on the small table lamp at the side of the bed and lit two cigarettes for us

To measure the yield curve I use Moody’s Aaa Corporate Bond Yields as the long-term rate, and six-month commercial paper rates as the short-term rate. You can find these figures in government publications, Barron’s, and other financial periodicals.

But there were other types of PERLS buyers who lacked the training and experience to understand them at all. They looked at a term sheet for PERLS, and all they saw was a bond. The complex formulas eluded them; their eyes glazed over. The fact that the bonds’ principal payments were linked to changes in foreign currency rates was simply incomprehensible. These are the buyers I call widows and orphans. These are the buyers salesmen love. Some PERLS buyers had no idea that the bet they were making by buying PERLS typically was a bet against a set of “forward yield curves.” Forward yield curves are a basic, but crucial, concept in selling derivatives. The most simple “yield curve” is the curve that describes government bond yields for various maturities. Usually the curve slopes upward because as the maturity of a government bond increases, its yield also increases. You can think about this curve in terms of a bank Certificate of Deposit: You are likely to get a higher rate with a five-year CD than with a one-year CD. A yield curve is simply a graph of interest rates of different maturities.

idea. A forward curve is like a time machine: it tells you what the market is “predicting” the current yield curve will look like at some point forward in time. Embedded in the current yield curve are forward curves for various forward times. For example, the “one-year forward curve” tells you what the current yield curve is predicting the same curve will look like in one year. The “two-year forward curve” tells you what the current yield curve is predicting the same curve will look like in two years.

I can explain this more easily by an example. Suppose the one-year interest rate is 5 percent and the two-year interest rate is 10 percent. This is a very steep yield curve. Suppose you want to put $100 in savings away for two years. You can either (1) lock in 10 percent for two years, or (2) lock in 5 percent for one year, and wait to see what rate you can earn during the second year. Which would you do? If you lock in 10 percent for two years, and the one-year interest rate stays the same at 5 percent, you are better off. But if you lock in 10 percent for two years, and the one-year interest rate soars to 50 percent, you are worse off. What is the one-year break-even rate? In other words, how much would one-year rates need to increase before you earned the same return with either strategy? The answer—about 15 percent—is the one-year forward rate for one year. That is, the current yield curve is predicting, based on current trading between one and two year bonds, that in one year 15 percent will be the one-year rate. The actual rate in one year might be 15 percent, or it might not. The 15 percent rate is implied by current rates. There are elaborate formulas for calculating all the forward rates for every maturity and for deriving an entire forward curve, but the analysis is no more difficult than the above example.

steeper. In a way, the forward curve simply stretches or magnifies the shape of the current yield curve. And if you don’t believe what the forward curve is predicting, then derivatives allow you to bet against the forward curve.

One curves such as Art,with all the means of hope,as the striving mind it strives,the heart is throbbing high, to yield, from his Artistry!

the Fed was becoming tight enough to raise short-term interest rates above long-term rates (which was called “inverting the yield curve”). Every time that happened, inflation-hedged assets and the economy went down.

Initially, the CD futures contract was the most popular. In fact, for the first four years, it had twice the open interest and trading volume as the Eurodollar futures contract. However, something happened that would change short-term interest rate futures forever. Continental Illinois National Bank, the seventh largest bank in the U.S., began suffering from liquidity problems. In the futures market, anyone receiving a delivery on the CD futures contract always received a Continental Illinois National Bank CD. When Continental Illinois collapsed in 1984, the CD futures contract was all but dead, lasting only two more years until 1986. What was bad news for the CD futures contract was good news for its sister contract, Eurodollar futures. The Eurodollar contract proved to be resilient during that banking crisis. Banks could still estimate their borrowing costs, and the survey method allowed banks to patch the holes in their yield curve when there was no actual CD issuance. The Eurodollar futures contract went on to become one of most successful futures contracts ever. The first cracks in LIBOR appeared during the Liquidity Crisis of August 2007. At the time, cash investors were unsure which banks were holding subprime debt and CDOs linked to subprime, so they stopped buying bank CDs altogether. Between August and September 2007, no bank could issue CDs with a maturity greater than one month. So, what do you do as a LIBOR submitter when you’re called at 11:00 AM and asked where you are issuing CDs? Ironically, banks did what they were supposed to do: they estimated. Of course, those estimates ended up being extremely low. The Liquidity Crisis of 2007 showed that the LIBOR survey method could break down during a major crisis.

It’s importance, however, is bigger than that. Treasury securities are the risk-free yield curve for all of the financial markets. That’s right, the yields of Treasury Bills, Notes, and Bonds from overnight to 30 years make up a yield curve that is used to price all other fixed-income securities. The Treasury market is the reference rate for interest rates. Treasurys are a tool for pricing corporate bonds, municipal bonds, emerging market bonds, federal agencies, mortgage-backed securities, and other dollar assets. On top of that, they’re also a tool for speculation and hedging risk.

In general, outside of the auction cycle, 2 Year Notes accumulate the most shorts when the market expects the Fed to raise rates or there are a lot of yield curve flattening trades. “Flatteners” mean the Street is expecting short-term rates to rise relative to long-term rates. Proprietary trading groups will short-sell the 2 Year Note and buy the 10 Year Note against it. Given that the duration of the 10 Year Note is about five times greater than the 2 Year Note, it means that they are short-selling about five times as many 2 Year Notes as 10 Year Notes to be correctly risk weighted. When big hedge funds are in this trade, the 2 Year Note can get extremely Special.

This collar is a public sign of our commitment to each other, of yours to me, a sign of your trust, of your acknowledgment that I will always be there to care for you, your needs, both physical and otherwise. It’s a sign of your willingness to submit to me, to let me care for you in all ways. I commit to placing you and your needs as the most important priority in my life. Do you accept?” He held out a hand, and I placed mine in his as I knelt before him, holding my gaze on his. “James, I accept your collar, this sign of your commitment to me, and mine to you. I commit to accepting your place in my life as my Dom, to letting you care for me in all ways. I promise to accept and respect you, to yield to your authority as you have requested.” James stroked a hand down my hair, then clicked shut the tiny golden padlock. It was a faint sound, but the quiet in the club at that moment amplified it. I heard the click and felt it echo through me. James extended his hand and helped me to my feet. I turned to the pillow Lila held and took a small key suspended from a simple golden chain. “I give you this key, sir, as a sign of my devotion to you, sir.” A slow smile curved my lips as our eyes connected. “By accepting this key, you agree to respect the relationship between us, to value me as a person, to respect my worth and intelligence, and never seek to destroy what makes me who I am. Do you accept?” “I accept.” Then he dipped his head, which was a deviation, according to both him and Lila, from what would be considered a typical Dom’s actions. It was a sign that he understood and respected my independence outside the bedroom. After I slid the chain into place, he cupped my face in his hands and kissed me. “With the exchange of the collar, lock and key, James and Tina have made their public commitment to each other.

A learning curve—measured as the percentage unit cost reduction realized with each doubling of cumulative production volume—is typically steepest when labor and machinery add significant value in the production process, as with aircraft assembly or semiconductor manufacturing. Value-added refers to the difference between a product’s final cost and the cost of raw material inputs; this difference consists mostly of labor and equipment costs. Learning-by-doing—for example, finding a way to cut setup times for a new production run—often yields labor and equipment cost savings.

I have this dream,' Rhys said as I retched again, holding my hair. 'Where it's not me stuck under her, but Cassian or Azriel. And she's pinned their wings to the bed with spikes, and there's nothing I can do to stop it. She's commanded me to watch, and I have no choice but to see how I failed them.' ... His fingers were gentle, but firm where he'd fisted them in my hair. 'You never failed them,' I rasped. 'I did... horrible things to ensure that.' Those violet eyes near-glowed in the dim light.' 'So did I.' My sweat clung like blood- the blood of those two faeries- I pivoted, barely turning in time. His other hand stroked long soothing lines down the curve of my back, as over and over I yielded my dinner.

We called it the Maturity Extension Program. The press, not quite accurately, nicknamed it “Operation Twist,” after a Fed program of the same name during the early 1960s. Back then, under the leadership of William McChesney Martin, the Fed bought longer-term securities and sold shorter-term securities in an attempt to “twist the yield curve”—that is, lower long-term interest rates (to stimulate spending and investment) and raise short-term rates (to protect the value of the dollar, supposedly).‡ This time, our goal wasn’t to move short-term and long-term rates in opposite directions but to bring long rates closer to rock-bottom short rates. With so many reserves already in the banking system and our promise to hold rates at zero at least through mid-2013, we saw little danger that selling short-term securities would lead to a significant rise in short-term rates. Thus, we expected our purchases under the Maturity Extension Program to have effects similar to those of our purchases under QE2.

The securities lending business boils down to one concept: exchanging a security that someone needs for a different security or cash. The business is driven by the need of the dealer community to cover short positions, be it in stocks, Treasurys, agencies, corporate bonds, ADRs, or even ETFs. When a dealer is looking to cover a short position, they first check what are colloquially known as the “sec lenders.” The securities lending group will pull the security out of the end-user portfolio and lend it into the Repo market. When a securities lending group loans a security, they either receive cash or bonds in return. If they receive cash, they reinvest the cash. If they receive a bond, they earn a fee on the spread between where they loan the bond and borrow the other. In the case of cash, they need to invest it. They need an investment that generates a sufficient return to make the business viable, yet, at the same time, without taking too much risk. The safest and easiest way to invest is in overnight Treasury repo. The problem is that there’s very little profit lending a Treasury and reinvesting in a Treasury. In order to enhance returns, the securities lending groups take some risk. It’s not necessarily a lot of risk, but increasing returns involves increasing risk. It can be either interest rate risk, credit risk, or liquidity risk. Technically a combination of all three is possible, too, but that’s pretty dangerous. The yield curve is upward sloping most of the time, so investing for a longer period of time generally generates a higher yield. Let’s say the overnight rate is 2.00%, the one-month rate is 2.05%, and the three-month rate is at 2.15%. Instead of reinvesting cash overnight, there’s an extra 15 basis points for investing for three months. Since the end-investor clients usually hold their bonds to maturity, there’s only a small chance they will sell a bond during that three-month period. On top of that, the securities lending groups run multi-billion dollar portfolios, so they can ladder their investments.

It is suggested that the increased costs of sociopolitical evolution frequently reach a point of diminishing marginal returns. This is to say that the benefit/investment ratio of sociopolitical complexity follows the marginal product curve … After a certain point, increased investments in complexity fail to yield proportionately increasing returns. Marginal returns decline and marginal costs rise. Complexity as a strategy becomes increasingly costly, and yields decreasing marginal benefits.