Interest Rate Roadkill

Yield Curve Arbitrage
Does a steepening yield curve help bank profits? It depends on whether a bank has already bought long bonds before the steepening curve makes them cheaper. If the banks already own those bonds, then the more the curve steepens, the more it inflicts losses and then the banks have to sell, which steepens the curve further.

Treasury Yield / Stock Dividend
Does it really make sense to compress the spread between the Treasury bond yield and the dividend yield on stocks? Not if stocks can go down.

Japan
But hey, stocks can’t really go down while the Prime Minister of Japan is putting pressure on public pension funds to buy stocks (presumably as the central bank buys the government bonds off them)? And what happens after they are “all in”? The danger when the government thinks to tighten a screw here, and a pulley there, leading to tightening all the belts and straining all the levers is that eventually the forces unleashed bring about the crack up boom described by Mises, in a total blow-out of the currency.