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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

#411

Post by dv_dt »

tunesmith wrote: post #399
dv_dt wrote: post #177

Earlier quoted context omitted.

If you read Ray Dalio, he seems think think the next recession will be a "debt supercycle" which could be worse than 2008. (this could be him plugging his hedge fund, but he's semi retired, and really has no more money needed to make personally) Note also that recessions have been growing longer each cycle. IMHO it's related to the bottom 99% having been getting paid smaller and smaller portions of wealth, and so a b…

It's hard to follow his reasoning sometimes. Sometimes it seems like he's saying that we already went through the debt supercycle, or the end of the long-term debt cycle and we've already gone through the reflation period. But other times it sounds like he's saying the real "big one" is still about to happen, rather than just another recession.

I haven't ever seen anything from him that says we've gone through it already - he cagey about exactly when (and that's the correct view imo) the next big recession hits, but I see him trying to lay groundwork to allow a few paradigm shifts in how governments have to take on new financial tools if we want to stay stable - e.g. helicopter money. You could get his "Big Debt Crisis" book (I got the free pdf on rollout), that lays out the case in detail with data.

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

#412

Post by opwieurposiu »

cure wrote: post #308
magduf wrote: post #188

Earlier quoted context omitted.

>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 unl…

All the money in the world will not help you if you have no secure homeland for your children and grandchildren. You can not have security when the means of production of a state is located outside of the control the citizens of that state. Tariffs are a small step towards re-establishing local control over the means of production.

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

#413

Post by ashelmire »

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 don't think it's a tech crash at all. Sure, we've got companies being propped up by VCs that are doomed to fail (Uber, etc), but the fundamentals of other big tech companies are sound. They have customers, they sell products, and demand for some of those (advertising and support services) are and will be perpetual. The signals for the downturn don't really seem to have anything to do with tech in particular.

In a crash, I'd expect the VC money to become more cautious... for a bit. But that can be a good thing, too, because it means you aren't competing with garbage companies that are always operating at a loss.

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

#414

Post by basementcat »

tempguy9999 wrote: post #264
asdf21 wrote: post #241

Earlier quoted context omitted.

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?

One strategy might be to start with a number of business entities; move "troubled assets" of all entities into a single entity and have that entity declare bankruptcy.

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

#415

Post by throw0101a »

xiphias2 wrote: post #404
hedora wrote: post #382

Earlier quoted context omitted.

He didn’t “get” rich. He was born rich. He would have much more money today if he had passively invested it. The man is a managerial train wreck that’s been consistently burning untold wealth for 30+ years. Much of what he has left was gotten by repeatedly breaking the law, and somehow only ending up with civil liability instead of criminal convictions. Now he is actively wrecking the US economy and has somehow bulli…

I agree with you that passive investment would have got the same gains, but it's much easier to see in hindsight, it was not that easy to see beforehand. He made money by burning other people and companies, but he came out quite well from it.

Not being able to actively beat the market has been known since about 1973:

* https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street

Bogle started Vanguard in 1975:

* https://en.wikipedia.org/wiki/The_Vanguard_Group

* https://en.wikipedia.org/wiki/Index_fund#Origins

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

#416

Post by scarejunba »

dobleboble wrote: post #355
JeremyNT wrote: post #265

Earlier quoted context omitted.

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 h…

"federal government" is probably a better term than "deep state" unless you're intentionally trying to be inflammatory...

I imagine that what they meant to refer to is what we remember as "the bureaucracy" (the system of career policy-makers), but that term now has the connotations of inefficiency etc.

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

#417

Post by tunesmith »

gomez9 wrote: post #357
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…

Yield curve inversion is way bigger than the trade war. Also the trade war directionality favors the USA.

What is the reasoning behind "The trade war directionality favors the USA"?

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

#418

Post by wolf550e »

bradstewart wrote: post #342
cr0sh wrote: post #311

Earlier quoted context omitted.

> democratically elected. If this were true, he wouldn't be POTUS. At best, you could say he was "elected according to the rules, procedures and processes of our democratic republic form of government, as defined by our Constitution". That would be a fairly true statement. It would also probably be a true statement to say that our Electoral College failed us in their primary purpose, which should be to assure that th…

> At best, you could say he was "elected according to the rules, procedures and processes of our democratic republic form of government, as defined by our Constitution". What, exactly, should "democratically elected" mean if not that exact sentence?

The issue with the majority

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

#419

Post by IfOnlyYouKnew »

marcusverus wrote: post #321
the-dude wrote: post #11

German economy shrinks : https://edition.cnn.com/2019/08/14/business/germany-economy-... UK economy shrinks : https://metro.co.uk/2019/08/09/pound-plummets-uk-economy-shr...

There are articles all over the internet stating matter-of-factly that the US-China trade war has had a hand in the German recession. Why is that the case? At first blush it seems like newly un-fulfilled demand in the US and newly available supply/capacity in China would be a boon for other countries. What am I missing?

Germany exports mostly industrial goods, such as machines (for manufacturing). As such, China is a far more important market than the US. The overlap of things both China and Germany manufacture is relatively small.

Or, in economists' terms: Germany's and China's goods are complementary more than competitive.

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

#420

Post by hokumguru »

prewett wrote: post #320
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…

As you may have noticed from the article, the point of yield curves inverting is that it is a pretty reliable recession-coming indicator: "The curve inversion to this point is flagging a 55-to-60 percent chance of a U.S. recession over the next 12 months" Also, if your timeframe is long-term, information in print is relevant, since a stock frequently trades in a region for months or years. In fact, there is a whole s…

Personally I'm not quite sure I would call 55-60 percent "reliable".
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