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

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

#221

Post by strenholme »

I remember the dot-com crash of 2001 and seeing companies close so fast, they didn’t their employees a final paychecks; I remember one day, after the dot-com collapse a position I was qualified for got filled within three hours.

As someone who has seen this before, things are looking ominous: The stock market drop of late 2018 reminded me of the stock market drop we had in 2000, about a year before everything fell apart. The yield curve inversion doesn’t look good, nor does the problems with the German economy. Uber posting a multi-billion dollar loss and Tesla having a hard time getting income remind me of the very same issues during the dot-com bubble, where highly valued companies weren’t actually earning money. Moviepass’s debacle reminds me of Webvan; a company which tried to get VC by having a business model which was hemorrhaging money.

I hope I am wrong, but I predict a tech sector crash in late 2019 or early-to-mid 2020.

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

#222

Post by Allower »

apo wrote: post #33

Key recession indicator is flashing red. Unlike the stock market, which is both backward- and forward-looking, the bond market is myopically forward-looking. When the yield between the 10-year and 2-year US treasury inverts, a recession is months away. This chart, showing the difference between the yield (or spread), shows recessions in grey: https://journal.firsttuesday.us/using-the-yield-spread-to-fo... Notice how…

>Then when the Fed inevitably rides to the rescue For all your education you are still a fool

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

#223

Post by cestith »

blackflame7000 wrote: post #217
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 can't import(buy) more than you export(sell) forever and hope to still be rich

That's a very simplistic view of economics. The US is the world's largest market for just about everything. It creates enough wealth domestically that its citizens can afford to buy from other countries without bankrupting themselves or the nation. Read up on GDP, fractional banking, stock issuance, sovereign debt, oil as a commodity, and reserve currency.

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

#224

Post by davidw »

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…

> What we are seeing is the investment community's realization this might not be true.

As Rick Wilson says... "Everything Trump Touches Dies".

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

#225

Post by tempguy9999 »

polotics wrote: post #219
empath75 wrote: post #213

Earlier quoted context omitted.

> the thought has always been that the president was using a high leverage negotiating strategy Whose thought? The people who didn't know that trump was an incompetent nutjob?

It's not so easy to distinguish the drunken master from the drunk. They walk the same.

Nicely put, but a real drunken master doesn't get repeatedly decked. Look at trump's financial record, that should have been quite enough (6 bankruptcies was it?)

Those who were fooled, were fooled because they chose to be.

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

#226

Post by PaulHoule »

dkrich wrote: post #58

I'm surprised that everyone blindly cites the inverted yield curve as a recession indicator without considering the "why". Seriously, if you were to ask ten people why an inverted curve predicts recession, you'd get ten completely different answers. I personally don't think this is necessarily the inversion that is going to be predictive of a recession because the inversion is occurring at the long end (the 10/30 yea…

For one thing, inverted yield curves are bad for banks and for investors who do the same thing as banks.

That is, the main thing banks do is borrow short-term (demand deposits, 2-year CD) and lend long-term (5 year car loan, 30 year fixed mortgage.) Conventionally long-term interest rates are more than short-term interest rates so you can make money this way.

With an inverted yield curve you can't make money that way.

Since banks are important to the flow of capital in the economy, something that hurts the banks can hurt the wider economy.

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

#227

Post by roymurdock »

jonny_eh wrote: post #207
roymurdock wrote: post #183

Earlier quoted context omitted.

Come on this guy is the president of the US people need to stop calling him ignorant and dumb just because they don't like aspects of his persona (racist/greedy/cunning/divisive). He is surrounded by aides and business people giving him information and trying to forward their own agendas. He's not just sitting there thinking "wouldn't it be fun to start a trade war to look tough". I respect Krugman as an economist bu…

Would it have been wrong to call King George III mad?

We don't live in medieval times. Trump is not a good human being, I don't like him one bit, but he's sane (I would go as far as to call him cunning) and democratically elected.

Comparing him to insane kings from the 18th century just gets people to chuckle and move on, sweeping deeper critical thought under the rug.

To call him stupid or mad ends any line of further inquiry into why he does the things he does, and that to my mind is very, very dangerous.

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

#228

Post by streetcat1 »

throwanem wrote: post #203
streetcat1 wrote: post #181

Earlier quoted context omitted.

It would not be worse than 2008. since what happen in 2008 is known, by definition it is already prepared for and backed into global risk assessments. It can only get worse if there is something that was NOT present in 2008 will manifest itself.

A parallel recession in China, for example.

Sure. But this might also be baked in.

In 2008, you had a major failure (within days) of Lehaman Brothers and some major financial institutions, all were a complete surprise.

A recession in china (controlled recession) might actually be a good thing overall.

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

#229

Post by skrowl »

empath75 wrote: post #213
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…

> the thought has always been that the president was using a high leverage negotiating strategy Whose thought? The people who didn't know that trump was an incompetent nutjob?

He made billions of dollars in real estate and other industries, then when on to become POTUS.

HOW CAN ONE MAN BE SO INCOMPETENT!?!

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

#230

Post by almost_usual »

strenholme wrote: post #221

I remember the dot-com crash of 2001 and seeing companies close so fast, they didn’t their employees a final paychecks; I remember one day, after the dot-com collapse a position I was qualified for got filled within three hours. As someone who has seen this before, things are looking ominous: The stock market drop of late 2018 reminded me of the stock market drop we had in 2000, about a year before everything fell ap…

The hyper growth of the dot-com crash was way different than today. Are there companies that are outrageously unprofitable today and over-valued? Yes. But it's nowhere near the dot-com hysteria. I doubt a tech sector 'crash' is going to occur but I wouldn't be surprised if a correction happens.
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