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Yield Curves Invert in U.S., U.K

bloomberg.com

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Re: Yield Curves Invert in U.S., U.K

#151

Post by roymurdock »

throwaway5752 wrote: post #109

Everyone serious knew that a trade war would set a recession in motion, and that it would be a trade war the US would lose because of the directionality of the trade. The thought has always been that the president was using a high leverage negotiating strategy (see https://www.newyorker.com/news/news-desk/for-trump-diplomacy... , for example) to extract maximal concessions from PRC. But in the end, most of the people…

My question is what is the point of the trade war. What does trump get from initiating/escalating it, or who is directing him to do it. Seems to be a net negative for all sectors of the economy.

Re: Yield Curves Invert in U.S., U.K

#154

Post by WarDores »

kart23 wrote: post #150
WarDores wrote: post #111

Earlier quoted context omitted.

The question is, what is the bubble? I'd argue the entire stock market is the bubble right now, with boomers throwing everything they have into the market to get some of that free money before they retire. Once they start pulling back it's going to be a sad day. Right now US household "wealth" is sitting at >500% of GDP. That's not sustainable.

Not just boomers. Robinhood has made it so you can buy stock on your iphone in a couple minutes. Everyone has stock, and I think the market is crazy overvalued right now. I think everything's a bubble right now. People are in loads of debt, more regular americans invest in the stock market, driving prices higher, all we need is a spark to get the fire going. Could come in the form of china and Hong Kong, could be the…

Agreed. The stock market is seen as a sure thing right now. It's a buying frenzy out there, even for companies that have zero fundamentals.

Re: Yield Curves Invert in U.S., U.K

#155

Post by steelframe »

datpuz wrote: post #141

I asked this in a similar thread a couple of weeks ago, but I feel like the sentiment is a lot more pessimistic today than it was then. Anyway, I've been holding way too much cash for the last two years in anticipation of a recession. Everyone was telling me that trying to time the market is a bad idea and that I should just invest and forget about it, but given the current signals, might it be a good idea for me to…

I'm sorry to hear that you missed out on the market growth over the past two years.

I am prepared to "lose" nearly 7 figures of net worth in the near future. But that's the "cost" I'm willing to incur so that I am able to stay in the markets for the long run.

Re: Yield Curves Invert in U.S., U.K

#156

Post by adventured »

vpribish wrote: post #136
tlogan wrote: post #116

Earlier quoted context omitted.

And things will be worse because China is also heading into recession. You know, you need sell all these products to somebody... And when US consumer stops buying new iPhones (or what ever) combined with recession then situation is going be really really tough. So this will be worse that 2008. Much worse. Back in 2008, China was growing and helping to ease the recession. I do not think China's economy will grow durin…

much worse than 2008 how? Global debt markets nearly collapsed and the single largest investment of american consumers crashed. You are making a really bold claim there and it looks like cheap catastrophizing.

I think the next recession will be modest compared to 2008, comparatively shallow in all regards (including job losses). The recovery is going to involve drawn-out weak economic performance, elaborate growth stagnation, that will frustrate central banks as they attempt to stimulate and reinflate. We'll see aggressive front-run Fed & global central bank action. As opposed to 2007-2009, which frequently saw the Fed running from behind to catch up to a very severe implosion. The Fed regularly utilizing QE programs the last time around was quite novel. This time it'll be used very early on and aggressively as a normalized tool of fighting a recession (for better or worse).

The recession will be weak, the recovery will be weak. The repeating behavior and stacking debt is resulting in lower dynamism in all regards. We've already seen all of this: Japan showed us exactly how it works, why (government debt), and how it cycles toward increased stagnation, perma low rates and low inflationary pressure.

The overly dramatic doom predictions are merely making the perceived easy call, and piggyback riding on what happened in 2008. A repeat, much less something worse, is not what we're going to see at all.

Re: Yield Curves Invert in U.S., U.K

#157

Post by cjrp »

roymurdock wrote: post #151
throwaway5752 wrote: post #109

Everyone serious knew that a trade war would set a recession in motion, and that it would be a trade war the US would lose because of the directionality of the trade. The thought has always been that the president was using a high leverage negotiating strategy (see https://www.newyorker.com/news/news-desk/for-trump-diplomacy... , for example) to extract maximal concessions from PRC. But in the end, most of the people…

My question is what is the point of the trade war. What does trump get from initiating/escalating it, or who is directing him to do it. Seems to be a net negative for all sectors of the economy.

> What does trump get from initiating/escalating it

Kudos from his base, enhances his "tough guy" image, helps his 2020 campaign.

Re: Yield Curves Invert in U.S., U.K

#158

Post by sigstoat »

WarDores wrote: post #111
xivzgrev wrote: post #81

Earlier quoted context omitted.

I agree. For the two recessions I’ve lived through, we didn’t arrive at them with everyone well aware it was going to happen. They snuck up and took the country by surprise. The tech bubble burst, and the real estate subprime bubble burst. We may go into a slump because everyone is expecting a splump to happen because it’s been 10 or so years of a bull run. But I don’t see a full-on recession without a large bubble b…

The question is, what is the bubble? I'd argue the entire stock market is the bubble right now, with boomers throwing everything they have into the market to get some of that free money before they retire. Once they start pulling back it's going to be a sad day. Right now US household "wealth" is sitting at >500% of GDP. That's not sustainable.

boomers have been retiring since before 2008. probably the ones with the most equities first.

Re: Yield Curves Invert in U.S., U.K

#159

Post by sigstoat »

kart23 wrote: post #150
WarDores wrote: post #111

Earlier quoted context omitted.

The question is, what is the bubble? I'd argue the entire stock market is the bubble right now, with boomers throwing everything they have into the market to get some of that free money before they retire. Once they start pulling back it's going to be a sad day. Right now US household "wealth" is sitting at >500% of GDP. That's not sustainable.

Not just boomers. Robinhood has made it so you can buy stock on your iphone in a couple minutes. Everyone has stock, and I think the market is crazy overvalued right now. I think everything's a bubble right now. People are in loads of debt, more regular americans invest in the stock market, driving prices higher, all we need is a spark to get the fire going. Could come in the form of china and Hong Kong, could be the…

> Everyone has stock

everyone _should_ have stock; what reasonable investment plan doesn't have stock?

you might as well hyperventilate about everyone having drawers full of socks.

Re: Yield Curves Invert in U.S., U.K

#160

Post by elamje »

A very useful caveat from the insightful, and cautious, Howard Marks -

> In that regard, the Financial Times noted on June 1 that “the [yield curve] has ‘inverted’ before every US recession in 50 years.” (Note, however, that this is different from saying every inversion has been followed by a recession.)

https://www.oaktreecapital.com/docs/default-source/memos/thi...

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