It was big news when the interest rate on the 10-year Treasury bond fell below the interest rate on a 2-year note earlier this week. This interest rate inversion has generally signaled a recession in the near future. While I am skeptical of the causality here, the bond markets do have good reason to expect a weaker economy in the immediate future, which will presumably mean future rate cuts by the Fed.

The Washington Post noted the extraordinarily low interest rate environment, beginning by highlighting a Danish bank that has a negative nominal interest rate on mortgages. This means the bank is paying people to take out a mortgage loan.

The piece goes on to discuss a strange world of negative interest rates. It then gives a bizarre quote from Carl Weinberg, an economist at High Frequency Economics:

"This is a credit crunch. And a credit crunch is a known economy-killer."

Actually, this is 180 degrees at odds with a credit crunch. A credit crunch is when credit is either extremely expensive or unavailable altogether. In the current situation, credit is incredibly plentiful. Banks are paying people to take it, as the article points out. It is not clear what point Mr. Weinberg was trying to make, but what he said did not make any sense.