Yield Curves Invert in U.S., U.K • Hacker News Board

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

#421

Post by pro-duct » Wed, Aug 14, 2019, 6:37 PM UTC

hindsightbias wrote: post #408

refurb wrote: post #346

Earlier quoted context omitted.

This is an insightful comment. The reason why tech has done so well in the past 10 years is partially due to luck. While investment dollars continued to pile up post-2008, tech was one industry who had recently shown really impressive returns. As such, that's where the dollars flowed. My concern is what happens when a few of those unicorns fail (e.g. Uber)? If sentiment shifts enough, you might see tech suddenly beco…

How many employees does Uber need to operate? They could probably lay off 80% of their staff, keep the lights on, and the stock price will soar.

Until every competitor leap frogs them. Everyone's running up a down escalator.

If uber just keeps the lights on, they will not maintain their stronghold on ridesharing, let alone be the last to market for the next generation of mobility that will replace their current product. Even Facebook goes out of fashion - that's why they bought Instagram and WhatsApp.

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

#422

Post by blindwatchmaker » Wed, Aug 14, 2019, 6:43 PM UTC

zanny wrote: post #372

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…

> So this will be worse that 2008. 2008 was bad because the collective banks of the US realized trillions in mortgages were money on the books that wasn't real and was never going to be real. The correction involved resetting said books and taking a few banks and a trillion dollars of US taxpayer money along the way. What is the correction this time? All it would really be is a run on confidence in global financial m…

> 2008 was bad because the collective banks of the US realized trillions in mortgages were money on the books that wasn't real and was never going to be real

An even larger amount of money was placed on bets on whether those mortgages were real, as opposed to the mortgages themselves.

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

#423

Post by baxtr » Wed, Aug 14, 2019, 6:45 PM UTC

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…

I think his thought is to force an economic downturn in 2019 and then release the tension going into 2020 to have a smooth economy once the elections are due

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

#424

Post by throw0101a » Wed, Aug 14, 2019, 6:45 PM UTC

zanny wrote: post #372

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…

> So this will be worse that 2008. 2008 was bad because the collective banks of the US realized trillions in mortgages were money on the books that wasn't real and was never going to be real. The correction involved resetting said books and taking a few banks and a trillion dollars of US taxpayer money along the way. What is the correction this time? All it would really be is a run on confidence in global financial m…

> 2008 was bad because the collective banks of the US realized trillions in mortgages were money on the books that wasn't real and was never going to be real.

Don't forget the Europeans. The 'prudent' Germans of Deutsche Bank were in the thick of it too:

* https://www.thelocal.de/20110415/34419

* https://www.reuters.com/article/us-deutschebank-suit-idUSBRE...

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

#425

Post by dsfyu404ed » Wed, Aug 14, 2019, 6:45 PM UTC

scarejunba wrote: post #416

dobleboble wrote: post #355

Earlier quoted context omitted.

"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.

Inefficiency alone is enough to be an effective damper of extreme change.

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

#426

Post by opportune » Wed, Aug 14, 2019, 6:47 PM UTC

8ytecoder wrote: post #276

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…

First of all predicting a crash is a fool’s errand. It as much about emotions as it is about fundamentals. There’s a perfectly valid explanation for the valuation of Startups and the availability of capital for startups in the last 9 or so years. After 2008 crash, markets were stagnant until 2012. At the same time capital was being eased by govts worldwide. This capital has to flow somewhere. Tech startups were ripe…

I am pretty sure recessions will at least be good for ridesharing companies, since they will get more drivers, which will lower driver pay. Since they can treat the prices consumers are willing to pay as sticky, this could help them solve profitability issues. I am not sure how much a recession would affect demand or consumers' willingness to spend on ridesharing though, but I think overall a recession is actually good for ridesharing

For Airbnb, it's a bit harder to say. More people will probably try to airbnb their places out, which will bring average costs down but increase the supply a lot. Demand may also increase as people unfortunately may turn to short term housing due to being in financially precarious situations. Since it's theorized that the American dollar will strengthen in the recession, this could also boost Airbnb's presence in international markets

Wework will probably gain too. More unemployment probably means more people trying to work out of weworks in startups or as freelancers. For the buildings they rent from non-executives, they could see a lower rent which would also help profitability.

So in summary I think the sharing economy is actually going to do ok. What do people do when they're unemployed? They try to make ends meet, and that means participating in the sharing economy

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

#427

Post by fucking_tragedy » Wed, Aug 14, 2019, 6:47 PM UTC

cestith wrote: post #278

theandrewbailey wrote: post #266

Earlier quoted context omitted.

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...

I'm not sure we can blame our fentanyl problems on China any more than our cocaine problems on Colombia or our heroin problems on Mexico. Currency control comes with being a sovereign nation. Our government and the Federal Reserve in the US issue more or less new money into the economy and raise or lower interest rates to control the strength of the US dollar all the time. I'm not sure dumping is a real problem for m…

The vast majority of fentanyl on the US black market is synthesized in 'clandestine' labs in China and shipped directly from there to dealers in the US via the post.

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

#428

Post by novaRom » Wed, Aug 14, 2019, 6:47 PM UTC

cr0sh wrote: post #261

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…

> 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 ag…

WW2 has transformed our civilization significantly: socially, technologically, etc. Maybe there's no rapid change without great shake. We tolerate our current system of things because it works short term, but it is no way eternal or stable, it will be changing, and it will adapt itself to new circumstances, like to lack of fresh water and other ecological disasters current system causes.

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

#429

Post by blevin » Wed, Aug 14, 2019, 6:48 PM UTC

perspective1 wrote: post #119

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…

QE is unprecedented. If you look at the absolute yields, we're talking about rates below inflation (1.8%). It's an inversion but the magnitude is so low it's hard to compare it to past inversions. Equity valuations are pretty much in line with earnings with the S&P 500 index as a whole trading around 20x earnings. Considering how low the risk free rate is (US treasuries), that's not a booming valuation and is probabl…

Regarding precedent: the Bank of Japan began QE in 2001 and has expanded it beyond sovereign bonds to also buy equities and ETF’s. Could the day come when the Fed bids up $BYND?

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

#430

Post by fredophile » Wed, Aug 14, 2019, 6:49 PM UTC

SkyBelow wrote: post #234

tempguy9999 wrote: post #225

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.

Why should the number of bankruptcies matter if the person is still rich? It shows that they are using it as a tool, which might inform us we need to consider how bankruptcies work, but that doesn't make someone incompetent. If you want to see someone who is incompetent with money, look at lottery winners who within 5 years end up worse than before they won.

How rich is he really? There is a lot of evidence that he has a long history of inflating his wealth and achievements. Combine this with his refusal to disclose financial info and I think that provides plenty of reason to doubt his current claims.

Other tools he's used include hiring undocumented immigrants for construction and then not paying them and refusing to pay contractors that worked on his buildings. He maintains his wealth by making deals and then refusing to pay when the bill comes. The bankruptcies are just a part of this pattern of behaviour.