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‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

nytimes.com

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Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#61

Post by kamarg »

67_45 wrote: post #45
kamarg wrote: post #37

Earlier quoted context omitted.

Short and long term interest rates in this case are for US Treasury Bonds that mature at different lengths of time. Short term bonds tend to have lower interest rates since you're taking less risk that your money will be tied up when the economy grows at a faster pace. If you invest in long term bonds and the economy hits a growth spurt, your money is stuck for a much longer period of time earning less interest than…

What is the goal of essentially reducing the amount of money in the economy?

Mainly to prevent inflation from getting too bad. We've got very low unemployment (among those actively looking for work) and still have excess amounts of capital sloshing around combined with the tax breaks. They're trying to keep the economy growing at a steady pace instead of taking off like a rocket only to crash land later.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#62

Post by pnathan »

peterwwillis wrote: post #38

While it's not a very accurate predictor, since 1960 there has been a US economic recession once every 5 to 10 years. The last one ended in 2009, 9 years ago.

Yep. "We're due" is my perspective on bear markets. We've had a bull for a long time now, and there's adequate macro factors that a tipoff into a bear is a fairly reasonable expectation.

In other words, it's quite time to make sure your holdings are prepared for a recession.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#63

Post by dlandis »

Of course they bury the most important part in the last sentence of the article.

> So if long-term rates were pushed lower by central bank bond buying, and now short-term rates are being pushed higher as the Fed tightens its monetary policy, the yield curve has nowhere to go but flatter.

“In the current environment, I think it’s a less reliable indicator than it has been in the past,” said Matthew Luzzetti, a senior economist at Deutsche Bank.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#64

Post by codingdave »

yellowstuff wrote: post #57
ISL wrote: post #44

Earlier quoted context omitted.

The S&P on roughly that date was 1268. In the depths of the recession, it reached as low as 684.

Then a year after the lows it was back over 1200, and it's basically been straight up since then. Unless you timed things very accurately you were better off simply holding.

Over the long run, that is always true. Just hold and grow, until you are within 10 years of retiring. Then move to a more conservative position.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#65

Post by pretendscholar »

yosito wrote: post #41

So it's probably a good idea to have some investments that aren't tied to USD right now, yeah?

Recessions in other parts of the world don't always affect the US but recessions in the US always affect other parts of the world.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#66

Post by ericd »

toomuchtodo wrote: post #26
scrooched_moose wrote: post #19

Earlier quoted context omitted.

They're down about 10% on the year: https://finance.yahoo.com/quote/WBA?p=WBA&.tsrc=fin-srch Also hadn't seen that news. Interesting.

GE long term is dead as an industrial conglomerate powerhouse, destined to be parted out. Jack Welch turned them into a bank, and then they divested the bank (now Synchrony). Very disappointing.

Interesting, I didn't realize they had multiple retail banks (GE Capital Bank became Marcus, Goldman Sachs' retail bank).

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#67

Post by qaq »

yosito wrote: post #41

So it's probably a good idea to have some investments that aren't tied to USD right now, yeah?

US due to its unique position can offload it's problems on the world at large it had -3% GDP in 2009 for some countries it dropped 10X that.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#69

Post by mabbo »

yosito wrote: post #41

So it's probably a good idea to have some investments that aren't tied to USD right now, yeah?

It's almost always smarter to have a geographically diverse portfolio, and to invest for the long term.

I use a low-fee robo-investor, WealthSimple[0], that has me invested in a variety of ETFs (Canadian, American, international) and bonds, and will rebalance my portfolio when any specific market falls or grows more than the others.

I prefer this kind of investing because it's stupid, cheap, and works.

[0]https://wealthsimple.com/ Or https://wealthsimple.com/invite/FCU4AG for a referral that gets you both of us some additional cash managed for free.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#70

Post by toomuchtodo »

ericd wrote: post #66
toomuchtodo wrote: post #26

Earlier quoted context omitted.

GE long term is dead as an industrial conglomerate powerhouse, destined to be parted out. Jack Welch turned them into a bank, and then they divested the bank (now Synchrony). Very disappointing.

Interesting, I didn't realize they had multiple retail banks (GE Capital Bank became Marcus, Goldman Sachs' retail bank).

GE Capital’s deposits platform went to Goldman, the lending went to Synchrony. I don’t have the background on why it wasn’t acquired as a whole, but I’m sure the information exists online.
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