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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

#261
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…

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…

> What is happening, right now, is literally what happened in the Great Depression (with the concurrent reemergence of nationalism) and is what led to two back-to-back world wars

Note: I understand that "yield curve inversion" does not mean "recession, depression, war" is inevitable or likely - only that these things are indicators at best. That said and understood...

Either our society is the dumbest there is (in aggregate - but possibly in general, too - with small pockets of intelligence, just not enough - and they are under constant attack) - or "someone" (not saying an individual or a group - or even planned for that matter) is wanting us to "go to war" - which if the past is any example, could very well be - or turn into - "the final war" (hah - who am I kidding - any survivors would probably battle each other with sticks and stones).

It's like were either really, really stupid in some regard - or there is this almost innate need by some portion of the species (or at least our American society) that desires and needs mass death and tragedy on a worldwide scale. If either is true, it points to a vast failing of our own making.

The sad thing? I can see it, others see it or have seen it; heck, those who were leaders and/or have been in "large-scale combat" have seen it up close and personal and don't want it.

This isn't a new observation at all; it is thousands of years old: "War is Hell" is a recent colloquial form of the message, and nobody (sane?) wants it.

So why, why, why do we keep doing it? Seriously - why?

I'm not expecting an answer; the possibilities and such are vast, likely rooted in various philosophical reasonings, etc - but seriously - all we have to do is...stop. Stop doing it. Stop being...dumb.

Education, even from an early age, does not seem to work - or at least, it doesn't seem to work on everyone. Many internalize the message, the idea, that "violence is bad" - and try their very best to avoid it. The "reptilian brain" keeps trying to reassert itself - but with some minor effort, we can avoid the issue mostly.

I'm not sure what its going to take for it to really stop. The Star Trek universe was built on the idea that humans had to first go through a massively devastating war before they would finally stop. Nice idea, but I think even that wouldn't be enough. We seem to be a species that constantly performs a "tragedy of the commons" experiment - and ultimately this need for "war" won't be won until only 0 to 1 humans are left. Even with only a single human around, I'm sure it would find a way to war...

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

#262
post #229

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?

He made billions of dollars in real estate and other industries, then when on to become POTUS. HOW CAN ONE MAN BE SO INCOMPETENT!?!

WRT making billions of dollars, clearly he didn't. WRT getting elected, he got 3mil fewer votes than his opponent, so you can thank the dysfunction of the EC. WRT to the votes he did get, it's pretty obvious- people dumber than he is, who are apparently blind to seeing his completely obvious con artist act and voting for him, that's how. By completely obvious I mean, the-sky-is-blue, 1+1=2 obvious.

That's how obvious it is that he's a bullshitter and a useful idiot for a lot of shitty people, and has no idea how anything works, and basically has the intellect and integrity of a first grader. Downvote me all you want everyone, but that's the truth. Every downvote I will take with great, great pride. If you voted for him, you're even dumber (or more selfish, if you think of him as your own useful idiot) than he is.

I have had a lifelong problem with constantly doubting my own perceptions about things, and always thinking that I can never be 100% certain about anything, and being hypervigilant about my own potential sources of bias and irrationality and unreliable information, but multiple years into this thing I have no choice but to admit that everything I wrote above is just plain true. It's not rocket science, it's not brain surgery, it's not even grade school arithmetic. It's OBVIOUS, and if someone doesn't see it after all these years they either don't pay attention or are as bad or worse than he is. Or they're literally children who are just that sheltered and naive about other people and the world and how it works.

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

#263
post #229

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?

He made billions of dollars in real estate and other industries, then when on to become POTUS. HOW CAN ONE MAN BE SO INCOMPETENT!?!

If your enemy is incompetent and he eludes you are every turn, what does that make you?

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

#264
post #241

Earlier quoted context omitted.

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.

There are strategic bankruptcies..

Serious question: how do these work, and can you actually make money off. or can you only limit cash losses with them?

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

#265

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?

Regardless of the man himself, historically the "deep state" (for lack of a better phrase) has so much inertia that radical changes (even if desired) by the White House end up moderated.

I think it's more correct to say that people are realizing that the old order under the president is gradually eroding and its moderating effects are weakening, which adds compounding risks (directly in the trade war stuff but also hidden ones that may be lurking as that erratic behavior starts more directly impacting all aspects of US policy).

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

#266

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.

There are two things China has been doing for years that the WTO hasn't put an end to. The stated goals of the trade war include stopping those, which I can - as anything but a fan of anything to do with Trump - actually agree need to stop. I'm far from certain the scale and breadth of tariffs involved are necessary to stop them, but I agree those two practices need to stop. One of those is outright IP theft. One esp…

Navarro said it best [0]:

Stop stealing our intellectual property

Stop forcing technology transfers

Stop hacking our computers and steal our trade secrets

Stop dumping into our markets and putting our companies out of business

Stop their state-owned enterprises from heavy subsidies

Stop the fentanyl

Stop the currency manipulation

[0] https://www.foxbusiness.com/economy/trumps-china-tariffs-not...

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

#267
post #34

It literally broke the Fed: https://fred.stlouisfed.org/series/T10Y2Y If you go to the homepage of the st louis fed and search popular series, this is the first that shows up.

They say they don't ring a bell at the top. But maybe there's a server that goes down...

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

#268

Earlier quoted context omitted.

> This is exactly the problem, where bonds are no longer providing interest payments. If interest rates drop even more, the value of bonds go up. Right now, a 1.68% 10-year bond looks like it sucks. But next year, a 1.68% 9-year bond will beat the pants off of a 1.3% 10-year. You can sell a 1.68% 9-year bond for a lot more money when everyone else only has 1.3% 10-year bonds. If the 10-year drops to 1%, you'll make e…

Thanks for the reply, I was confusing negative yield curves[1] with negative yield bonds (in the EU) [2]. It seems like if you already have high yield bonds, the value will continue to rise, as people exhaust other low yield options... however isn't this total value capped by the yield+face value? I don't really know how bond pricing works, but if you bottom out the yeild, or anticipated yeild... you should only be a…

> It seems like if you already have high yield bonds, the value will continue to rise, as people exhaust other low yield options... however isn't this total value capped by the yield+face value? I don't really know how bond pricing works, but if you bottom out the yeild, or anticipated yeild... you should only be able to make the face value back or someone is buying negative yields.

1. Bond prices are primarily determined by auction.

2. If a big bank (and the US Fed is one of the biggest banks) decides to make a move, smaller banks, and the general market, will shift the prices of bonds.

> EDIT: I _guess_ the bond reaches "maturity" in a much shorter time, which is perhaps your point. "1.68%" over 10 years is shit compared to "1.68%" over 1 year.

No. Its 1.68% per year over 10 years. Bond pricing is standardized upon APY (its a "notational standard": bonds all have their own terms. But you can always math-out an effective APY given any bond structure). US Treasury Bonds physically have a coupon (every year, or maybe twice a year, they give a $$ amount), and a principle (at the end of the term, you get $$ back).

Anything less than 1-year only has principle (and is commonly called a "Bill"). So you get different APYs by shifting the price of the bill. Ex: You may buy a $1000 (principle) 1-year Bill for $980, effectively earning 2.04% APY in this hypothetical example.

In any case: the reason why a 1.68% 1-year is better than a 1.68% 10-year is because you only lock up the money for 1-year (in the case of the 1-year bond). So normally, a short-term bond gives a lower APY.

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

#269
post #25
post #23

Earlier quoted context omitted.

Let’s talk in 10 years and see if your cash will beat my S&P allocation.

It’s about diversification and timing the market not simply holding cash for 10 years. I also just sold some stock, but I am still 75% in stocks.

As a person who isn't in any way confident in my ability to time the market, I think I'll stick to the old adage of time in the market not timing the market.

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

#270
post #129

Earlier quoted context omitted.

> I'd just like to point out that the yield curve inverted in 2018 [1] yet here we are. As pointed out in the article you linked, what happened in late 2018 was a small section (3-5 year treasuries) inverted. When people talk about yield curve being a harbinger of recession, they're usually talking about the 2-10 year spread, which is what the parent post referred to. You may argue "things are different this time", b…

Okay, I’ll get my shorts in. What date do you think everything will collapse?

The day world war Z II comes out in theatres.
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