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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

#511

Post by fgonzag »

dageshi wrote: post #335
quotemstr wrote: post #288

Earlier quoted context omitted.

I'm in the "worse than 2008" camp, mostly due to the reasons the OP gives. Another consideration is that our current expansion has been a very long one, and the longer an expansion goes on, the more fraudulent cruft accumulates, the cruft beings things like assets not marked to actual market value, money-losing businesses subsidized in various ways, and sometimes outright Madoff-like fraud. This cruft appears financi…

There isn't anything like the housing bubble right now. There's nothing that really allows people who shouldn't be able to borrow lots of money to borrow lots of money like housing did last time. What you're describing is just the normal stuff that happens in all recessions. And as much as we had a long boom, we also had quite a long painful recovery from 2008, it wasn't the same as normal recovery which explains why…

I used to think VCs and startups were the next bubble, but the ridiculous investments seemed to be rarer these days. (though I still think many so called unicorns are overvalued)

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

#512

Post by tunesmith »

dv_dt wrote: post #411
tunesmith wrote: post #399

Earlier quoted context omitted.

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),…

He's referred to 2008 as the end of the long-term debt cycle, and the ten years since then as the reflation period.

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

#513

Post by bduerst »

kyralis wrote: post #363
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.

They're not stupid, for the most part. They just have a different set of priorities. Many of the individuals supporting the trade war and tariffs know that it's causing them problems, but as far as they're concerned it's worth it to stop China from "screwing them over" or "taking advantage of them". This is not, in fact, an unusual thing- people are are frequently willing to take some personal pain to punish what the…

"Having a different set of priorities" is just another way of saying someone is stupid or irrational. This base is supporting someone who is not acting in their best interests, because yes, their best interests are not a priority.

There's even a term for this in economics, called Animosity, which leads to economic imbalance: https://en.wikipedia.org/wiki/Economic_discrimination#Animos...

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

#514

Post by HillaryBriss »

dageshi wrote: post #162
throwaway5752 wrote: post #147

Earlier quoted context omitted.

Maybe I'm a crazy for taking the state of the fed funds rate, the budget deficit, and the Fed's balance sheet into account? We can print money, but so far the USD hasn't reflected any sort of consequence for that. They can do a QE program, but will other actors accept the implicit loss on their treasury holdings? I can think of one major player there that is a lot less likely to do so now.

What can the chinese do exactly? Sell all their USD treasuries? Sure, but what do they do with the money then? The only other currency big enough to absorb those kind of flows is the euro which would spike the euro exchange rate with the dollar to extremely painful levels for the EU, probably causing a deep recession in the EU but doing nothing to the US.

> Sell all their USD treasuries?

Last I read they were only holding about 1 trillion in USD treasuries. Selling all of that would not inflict much damage on the US economy or government. If there's one superior skill the US Treasury and US Fed have it's selling/buying even more massive amounts of debt than that. Markets are used to it. So, a $1 trillion dollar bond sale event might hurt for a short while, but it wouldn't really be all that heavy.

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

#515

Post by bduerst »

doctorpangloss wrote: post #303
almost_usual wrote: post #230

Earlier quoted context omitted.

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.

Advertising is a half a trillion dollar market - how is that fragile?

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

#516

Post by navigatesol »

navigatesol wrote: post #112
clomond wrote: post #93

Earlier quoted context omitted.

"Past Performance Is Not Indicative Of Future Results". I am not saying a recession ISN'T imminent - but to declare affirmatively due to a technical indicator that one IS in an environment which has differences from the past is equally egregious. This yield inversion is based on sentiment, not fundamentals (yet). Also, suggesting folks buy long-term treasuries is literally following what the market is doing right now…

> Suppose the trade deal is fixed tomorrow Do you really believe that's going to happen? The "cold war" with China is heating up. > governments add surprise stimulus in the coming months What happens to interest rates? > If recession fears go away in a few months What do you mean by "recession fears"? People are examining the data and seeing the global economy slowing down; it isn't arbitrary, it's data driven, with…

Downvotes with no replies.

Do not imply a recession is possible, the Silicon Valley elite have not yet fully cashed out.

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

#517

Post by war1025 »

walshemj wrote: post #505
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...

Also the inertia caused by having 52 states all with different laws probably has made for more of an impact.

52? When did we get two more?

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

#518

Post by graedus »

throw0101a wrote: post #424
zanny wrote: post #372

Earlier quoted context omitted.

> 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... See also: * https://en.wikipedia.org/wiki/List_of_writedow…

> Good book on how things went down and my who is Crashed:

Incredible book. Tooze's interviews and lectures on the subject can only scratch the surface of what the book covers, but they are worth a listen too. I can recommend his appearance on the podcast Talking Politics:

https://www.talkingpoliticspodcast.com/blog/2018/113-crashed

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

#519

Post by 0xffff2 »

paganel wrote: post #507
0xffff2 wrote: post #466

Earlier quoted context omitted.

War with whom over what exactly? Maybe it's just a failure of imagination on my part, but I really can't picture a scenario that leads to another world war, even in today's relatively unstable political climate.

I don't know, just war. > but I really can't picture a scenario that leads to another world war, even in today's relatively unstable political climate. Ten years ago I bet almost no-one was picturing the late-1980s anti-nuclear treaties going the way of the Dodo bird. Or a land war in Europe (Ukraine is indeed in Europe). Or German politicians being shot for their political beliefs. Or British politicians being shot…

How do any of those meaningfully point to a war though? Again a war between whom?

Assuming you're talking about the US pulling out of the INF treaty, that's not really a meaningful change. The Russians and various other countries were already largely ignoring it. Russia's territorial shenanigans are what really cemented the idea that we're not fighting a major super-power to super-power war ever again. The West has largely let it happen, and while I don't understand why, at this point it's hard to see why that would change. US troops have been in Europe for a long time. Whether you saw them more or less in the past, troop levels there haven't changed that much.

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

#520

Post by war1025 »

tunesmith wrote: post #343
refurb wrote: post #319

Earlier quoted context omitted.

You might want to consider the idea that people who disagree with you politically might in fact not be dumb, but just have views that differ from yours. Just a thought.

Philosophical question - why is that important to know? What added value is discovered by realizing your opponent's conclusion is not based off of bad facts or faulty reasoning, but different values?

Because seeing the world differently is different from being malevolent.

If someone is acting malevolently, then you can rationalize basically anything with regards to hurting them or their well-being.

If someone just views the world differently, you will be annoyed by them, but probably not able to rationalize to yourself that they should not exist.

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