What a collapse in the spread over the last few days! A flattening yield curve hurts the bankers. We watched this play out the last few weeks. Keystone's spread indicator uses a 255 level as a line in the sand between happy bankers and sad bankers.
The fight above and below this 255 spread continued for the last couple months until a few days ago the spread collapsed lower. The financial sector topped in February.
As of this writing, the 2-year is 0.26% and the 10-year is 2.36 which gives a 210 spread, 45 points under the critical 255 level. That makes for sad banksters, as evidenced by the collapse in the financials. BAC was slapped silly yesterday crumbling lower from 8.17 to 6.51, or 20.3%. That is going to leave a mark. Financials, semiconductors and copper led the downfall of the broad markets when they topped in February 2011.
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