The Greek Semi Inverted yield curve and what it means

Greece's semi - inverted yield curve. 

The Greek yield curve is strangely "semi inverted" as was pointed out by Tyler Durden at Market Guardian. Inverted yield curves mean recession, as happened before this current recession.  And Greece's yield curve was very highly inverted, meaning bad economic times for Greece.  However, the yield curve also represents the risk associated with the bonds and as such the short term yields were very low?  That's odd.  See image below: 

While it is very unique, it is not wholly unprecedented.  When working the trading floor at GMAC we had a long period of time that we had something similar, albiet 1-5 year yields were at 40+ %.  But the short term yields were much lower given that there was an investor or government bailout assumption built in on the short term.  

The reason in both cases was the fact that short term debt was covered either by investors as was the case at GMAC or the IMF or Europe in the case of Greece.  Makes you want to buy short term guaranteed debt.  Geez, why can't anyone fail anymore.  Via MarketGuardian:

Here’s one for the history books – this is what a semi-inverted yield curve looks like. The reason for the shaded area, and why the curve isn’t inverted off the bat: the IMF has pledged your money, dear Americans, to make sure Greece can at least roll its immediately maturing debt. Americans, via the IMF and Ben Bernanke’s Frankensteinian printing press are now guaranteeing the differential between 10% and 5% on Greek <1 year debt. And why? Is it going to prevent a Greek default in the end? Of course not, but at least US taxpayers can enjoy some of the the great moral gratification that being a part of the Komintern provides.


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