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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

#301

Post by paganel »

throwaway5752 wrote: post #125
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…

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…

Back in 2008, just after the Lehman collapse had happened and when money-market funds had gone bellow 0 (I think in late October), I predicted that there was a very great chance to have a world war in the next decade because of that ongoing crisis.

Fortunately it looks like I was wrong, but it also looks that “liberal democracy” is on its way out in many former bastions of said democracy. I fear that a new nasty recession right now will throw us out directly into a war, we’re at the 1937-1938 moment when almost all of Europe had gone the wrong way in the previous decade (politically speaking).

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

#302

Post by roymurdock »

harimau777 wrote: post #259
roymurdock wrote: post #227

Earlier quoted context omitted.

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 th…

I don't think that sane, cunning, or democratically elected are the same as intelligent.

You're splitting hairs and I'm not sure what your point is.

He's sane/rational. He has motives for most of his actions from what I've observerd. I'm asking what the motive is behind his initiation and escalation of the trade war with China.

I'm not arguing that it's an intelligent thing to do, or that Trump is intelligent. I'm asking what his motive is. If he was irrational I would concede that perhaps there is no motive because he's disconnected from reality.

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

#303

Post by doctorpangloss »

almost_usual wrote: post #230
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.

Facebook and Google make their money off businesses buying advertising, people rightly see their profits as being very fragile.

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

#304

Post by Tiktaalik »

ummonk wrote: post #248
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…

I think the difference this time around is that the largest tech companies (Apple, Google, Facebook, Microsoft, to a lesser extent Amazon) are generating healthy profits. So while there is likely an issue with a lot of the unprofitable unicorns, the industry as a whole won't collapse.

There's lots of relationships whereby the fortunes of one company can be effected by another. For example Tesla and Uber are total dogs snd I could see them imploding. Are there smaller startups that sell services to Tesla and Uber in a significant enough way that they could get hurt too?

Another relationship that has been mentioned before is that of mobile games and google and facebook advertising services. A recession and/or anti-lootbox legislation could harm mobile games, which would reduce ad spend on platforms like facebook/google.

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

#305

Post by Myrmornis »

What change if any should someone make if they have money in robo-investing services like wealthfront? Is shifting money to cash or lower risk robo accounts a sensible strategy, or have undesirable consequences crystallizing losses/gains, a somewhat expensive perturbation going against the robo algorithms that you have elected to trust?

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

#306

Post by ethbro »

alexandercrohde wrote: post #298

So, somebody with a more rigorous understanding correct me if I'm wrong, but I always thought it was a truism that any advice about the market appearing in print was necessarily useless: If there is advice (e.g. Buy/Sell when X happens) and there is statistical proof it's a good indicator, then large companies with multibillion portfolios would act on that evidence. At which time their behavior would "correct" for th…

Scale.

Some opportunities can't scale to multiple billions in size, which means they persist as available inefficiencies.

So broadly speaking, yes. But specifically, maybe.

Additionally, one of the reasons bonds and yields work they way they do (per my understanding) is that all buyers aren't free. Institutional buyers (e.g. banks) are required by regulation to consider ratings.

So they have to park their large amounts of money somewhere, and they have a limited number of legal choices.

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

#308

Post by cure »

magduf wrote: post #188
roymurdock wrote: post #165

Earlier quoted context omitted.

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?

>I guess if his base can't put 2 and 2 together that prices are rising due to his tariffs it almost makes sense. His base really can't put 2 and 2 together. You seem to think it's obvious that tariffs will cause prices to rise, but you seriously underestimate just how stupid these people are.

> His base really can't put 2 and 2 together. You seem to think it's obvious that tariffs will cause prices to rise, but you seriously underestimate just how stupid these people are.

I don't think they are stupid. But they are gullible and have been brainwashed. Their world view has been warped into something that just is not based in reality anymore ("invasions", "climate change doesn't exist", etc). This is not unlike what happens to people who get suckered into joining a cult...

So when Trump keeps saying that "China pays for the tariffs" - which is an obvious and outright lie because American consumers pay for them, it is a straight up tax on consumption - his base believes it. And somehow they don't - won't - put 2 and 2 together and connect the rising prices with the tariffs, because that would invalidate their worldview.

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

#309

Post by AnimalMuppet »

radiorental wrote: post #126
frankbreetz wrote: post #94

Earlier quoted context omitted.

I agree with this, also will we try to pass another tax cut to try to stimulate the economy. It seems to me should use tax cuts, large increases in government spending, and rate cuts to stimulate the economy on a "rainy days". Doing these things during a good economy seems foolish to me.

And Mitch McConnell recently argued the exact opposite. When asked he said (paraphrising) "Why would we increase taxes when the economy is doing well, why would we want to hurt that growth?" The mind boggles.

The idea of repaying borrowed money never occurs to people. The idea that interest rates might rise and cripple those who owe too much never occurs to people. That seems very short-sighted to me.

But... what if they're right?

Interest rates have been low for a decade. That's pretty unprecedented. What if they're going to stay low for another few decades? Maybe they're actually acting rationally... if they're right that this is going to continue for a long time.

This scares me, because I fear that we're just putting ourselves in a worse and worse position for when things get tighter. But what if it really is different this time? What if they never do get tighter?

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

#310

Post by ccffph »

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…

There's nowhere better to put your money is the issue. That's why equities keep rising.
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