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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

#191

Post by soVeryTired »

buboard wrote: post #108
soVeryTired wrote: post #40

Earlier quoted context omitted.

Any continuous locus of points is a curve - that's what makes the Jordan Curve Theorem hard to prove :) On a more serious note, the graph displayed in the article is a timeseries of the difference between two points on the curve. The actual curve looks something like this: https://en.wikipedia.org/wiki/Yield_curve#/media/File:Yield_...

isn't that discontinuous?

Quips about the Jordan curve theorem aside, I don't think that's really a meaningful question. It is or it isn't, depending on how you want to model it.

Yield curves are bootstrapped from known bond yields at liquidly-traded tenors (1Y, 2Y, 5Y, 10Y, and short-dated). Those are the heavy black dots in the image. Outside of those tenors the 'true' rate is anyone's guess: you're basically interpolating. Whether that interpolation is continuous is up to you!

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

#192

Post by Filligree »

kaolti wrote: post #128
gilbetron wrote: post #124

Earlier quoted context omitted.

It probably does: https://www.space.com/24073-how-big-is-the-universe.html

In terms of space, yea. I mean there's a cycle of expansion and contraction that happens in time.

Doesn't seem to be. You're referring to the big crunch, but that theory was ~disproven.

Our best bet now is that the universe will expand forever, and the expansion will accelerate. We've yet to determine if the acceleration will accelerate (Big Rip scenario), but it's a possibility.

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

#193

Post by magduf »

api wrote: post #180
roymurdock wrote: post #151

Earlier quoted context omitted.

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.

You are making the error people always make with personalities like Trump. Assertive alpha signaling and mammalian dominance gestures tell the parts of our brain that haven't changed since we were small tree rats that "this person knows what they're talking about, trust them, follow them." These parts of the brain are primitive and emotional and can easily override the rational mind. This is why charisma tends to bea…

>This is why charisma tends to beat substance even when the audience really ought to know better.

Exactly, and this is why the Democrats keep losing elections. They just can't wrap their heads around this simple fact that you stated here. They keep thinking that if they pick candidates who can go on at length about policy, that voters will love this and not care about charisma, so they pick the most uncharismatic candidates they can find. Obama proved the DNC wrong when he "stole" the nomination from Hillary in the 2008 primaries, and showed that a candidate with a lot of charisma was what was needed to win the election.

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

#194

Post by xapata »

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.

Insider trading?

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

#195

Post by andreilys »

ahelwer wrote: post #120
andreilys wrote: post #73

Earlier quoted context omitted.

Well if this was Nov 1999 (one year before the crash), S&P 500 was at $1.4k, so it would've taken you 14 years for your position to be in the green again

Now do this experiment with reinvesting dividends instead of just looking at the chart.

27% return over 14 years with dividends reinvested (1.86% annualized)[1]. Although when we calculate it with inflation its -7% and -0.5% annualized.

Not exactly a compelling argument since you could've made a risk-free return via savings accounts (Wealthfront currently has 2.3%, which I'm sure has been higher in the past).

[1] Nov 1999 one year prior to crash, to Nov 2012 https://dqydj.com/sp-500-return-calculator/

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

#196

Post by turk73 »

xwdv wrote: post #123
hammock wrote: post #99

Earlier quoted context omitted.

Are you in index funds? Take a look at what they did in 2008. The selling point is not "they only go up." It's "you can't beat the market."

It is a myth that the market can’t be beaten. You can beat the market if you take more risk and it works out for you. I’m beating the market right now, I’m up 33% this year still in my portfolio even with all the bullshit that’s happened. And recently, I’ve dumped all the extra margin I was holding so now I’m holding 100% equity in my stocks and paying no interest. Beating this market since 2010. That’s why my net wo…

Says every arrogant trader ever, right before their killer strategy took a big shit on them.

Anyone beating the market year after year is trading on insider information. Prove me wrong.

As far as your boast of "being up 33% this year" some Vanguard funds are up 23, 24, 25% and those are no-brainer buy and hold mutual funds. So regardless if your additional ~10%, you aren't going to win this race in one year and you are discussing "unrealized gains" which are simply not real.

If you're trading on margin, I hope you can handle the leverage on the downside because I watched A LOT of people lose not only all their money in '08 and '09 but also their homes, marriages, etc.

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

#198

Post by cestith »

adventured wrote: post #133
throwaway5752 wrote: post #125

Earlier quoted context omitted.

The Fed does not have the tools at its disposal that it did in 2008, they have been exhausted. The leadership on either side of the 2008 transition was much better at every level. Also, 2008 was a balance sheet depression that was more tractable to fix with monetary approaches. What is happening, right now, is literally what happened in the Great Depression (with the concurrent reemergence of nationalism) and is what…

> The Fed does not have the tools at its disposal that it did in 2008, they have been exhausted. That hasn't been exhausted even in the slightest. The Fed has the exact same tool at its disposal as it did in 2008: it controls the global reserve currency and can run an annual trillion dollar QE program for years as necessary, forcing the rest of the world to partially foot the bill of that QE program to the benefit of…

Oil prices are lower and the euro is looking good as a second reserve currency.

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

#199

Post by hasitchanged »

dageshi wrote: post #142
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…

It certainly won't be worse than 2008. 2008 was a financial crisis, core parts of the banking system were suspect, nobody knew who they could trust or who was solvent and worse nobody had a clue how to solve it for a dangerously long period of time. The financial system is not in that same position this time and as for China, China's growth is largely kept to china itself and guarded jealously, China did little or no…

> core parts of the banking system were suspect, nobody knew who they could trust

Serious question - how has that changed? It looks to me like since about 2009 banks have been trying very hard to get back to the same shenanigans they were pulling before 2008, and are mostly succeeding. They were given the message that, "Hey - you're too big to fail. Uncle Sam's got your back, and there will be no consequences for the people at the top. Do whatever you need to do!"

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

#200

Post by sangnoir »

roymurdock wrote: post #165
cjrp wrote: post #157

Earlier quoted context omitted.

> What does trump get from initiating/escalating it Kudos from his base, enhances his "tough guy" image, helps his 2020 campaign.

I've heard that argument but it's wrecking parts of the ag sector, hurting manufacturing (big parts of his base), and will probably push all consumer prices up. I guess if his base can't put 2 and 2 together that prices are rising due to his tariffs it almost makes sense. But I don't think it's that simple, he's clearly a coin operated guy so which coin is operating him to escalate this trade war?

Maybe his coin? The real estate markets crashed. Now, I don't want to blame the real estate markets, because I always made a lot of money in bad markets. I love bad markets. You can do very well in a bad market
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