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YIELD CURVE INVERTS: Recession indicator flashes red for first time since 2006

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The market’s most closely watched part of the yield curve inverted today, and if its record over the last half decade is any indicator, the U.S. could be headed for a recession soon.

 

Shortly after 6 a.m. ET on Wednesday, the yield on the 10-year U.S. Treasury bond dipped below the yield on the 2-year U.S. Treasury as the 10-year fell 1 basis point below the 2-year. The yield curve inversion has a strong track record of predicting a recession; each of the last seven recessions (dating back to 1969) were preceded by the 10-year falling below the 2-year.

 

The last time the yield curve inverted was in December 2005, about two years before the financial crisis sent the economy into recession.

 

Concerns over a global slowdown, in addition to uncertainties from the U.S.-China trade war, have weighed heavily on longer-term U.S.

Treasury yields. Since the new year, the return on the longer-term 30-year Treasury has fallen from a high of 3.12% in March to 2.08% on August 14.

 

Bond yields across the board have come down over that same time period, as investors move funds from more aggressive yielding securities into risk-off assets like gold and U.S. Treasuries.

 

Yields came down precipitously in August amid a mix of global concerns: President Donald Trump threatened new tariffs on China, an Argentinian election renewed worry over its debt crisis, and protests escalated in Hong Kong.

 

Morgan Stanley wrote August 12 that unless economic data tor U.S. equity earnings turn around, “the bear is alive and kicking.” Their note adds that investors should be careful about equity markets, recommending staples and utilities stocks amid recession risks.

 

“Growth stocks look more vulnerable than defensives,” Morgan Stanley wrote.

 

In an August 13 note, Bank of America Merrill Lynch warned that equity investors should not expect the stock market to turn sour immediately, as the S&P 500 has a tendency to experience a “last gasp rally” to a new peak after dipping.

 

BAML points out that it can take eight and 24 months for a recession to hit after the 2-year and 10-year curve inverts. They warned that an inverting yield curve means equities are on “borrowed time.”

Fed action

The Federal Reserve may have hoped that cutting rates in its July 31 meeting would have helped the yield curve steepen, since the shorter end of the curve closely tracks where the federal funds rate is.

 

The day after the Fed lowered rates, the 2-year bond did come down and widened slightly against the 10-year, widening the spread to 17 basis points.

 

But trade developments the Monday after clobbered bonds and began the fall into inversion, raising questions about whether or not Fed would be backed into a corner and forced to aggressively cut rates in its remaining meetings this year.

 
Fed Chairman Jerome Powell has grappled with interpreting the yield curve over the past few months. In early July, Powell told Congress that bond markets “reflected the real concerns that arose really beginning in May,” referencing the slowdown in U.S. business investment and broader global concerns abroad.

On that day, July 11, the spread between the 2-year and the 10-year was 28 basis points. Powell attributed the curve’s shape to the central bank’s signal in its June 19 meeting that it could cut rates.

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QUICK gop.....Trillions more in tax cuts for theTop 1% and the Corp's!!

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"YOU'RE GOING TO GET SOOOOO TIRED OF WINNING"

 

 

When we get a democrat back in office to fix the economy... AGAIN... It might be too late. China bought soybeans from us as part of a frade deal, once broken, they can buy soybeans for half the price we charge from other countries. Iran was positioned to only use nuclear for energy, that deal was broken and now they have no obligation to not build nuclear bombs. North Korea continues to test new delivery systems while convincing trumpie-boi they are interested in negotiations. Our allies in NATO, UN, and Europe are just sitting back and ignoring us until we get a reasonable sane person back in charge who understands... well, understands anything at all.

 

 

In 2018, American taxpayers paid over $90 billion more under ...

swordpress.com.ng/2019/06/12/in-2018-american-taxpayers...

In 2018, American taxpayers paid over $90 billion more under Trump’s tax law than 2017 – But Large Companies paid $91 billion less than they had in 2017 June 12, 2019 Written by admin; Published in swordpress, swordpress.uk, swordpress.us; 0; Permalink

Taxpayers paid over $90 billion more under Trump tax law

finance.yahoo.com/news/american-taxpayers-paid...

Corporations paid $91 billion less in taxes in 2018 under Trump's tax law Not just Amazon: 60 big companies paid $0 in taxes under Trump law Amazon will pay $0 in taxes on $11,200,000,000 in ...

 

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Trump’s sudden surrender in his trade war with China shows he still has no idea what he’s doing

rawstory.com/2019/08/trumps-sudden-surrender-in-his-trade-war-with-china-shows-he-still-has-no-idea-what-hes-doing/

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7 minutes ago, benson13 said:

h%C4%B1rsl%C4%B1.gif

 

 

You need to get some help, beanie.

 

Or is it FREDOSON these days????

 

ROFLMAO!!!

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http://wallstreetonparade.com/2018/06/the-yield-curve-makes-headlines-but-what-does-it-mean-for-your-finances/

 

Quote

At Wall Street On Parade, we’ve been calling our readers’ attention to what’s happening with the yield curve since November of last year for the simple reason that an inverted yield curve is an economic window into the future of the U.S. economy (reliably predicting past recessions including the 2001 meltdown and the epic collapse in 2008-2009). When the next recession hits, it will come at a time of unprecedented debt levels in the U.S. and a Wall Street banking sector that has, once again, loaded up on opaque derivatives exposure. That raises the stakes for more Wall Street bank implosions and, as a consequence, it raises the stakes for your financial well being.

 

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POOR LYING CRYING ROOM RETARD BENSON

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1 hour ago, benson13 said:

QUICK gop.....Trillions more in tax cuts for theTop 1% and the Corp's!!

Well, since tax increases contract an economy, more tax cuts sounds like a good idea. 

 

But since the WORLD economy is actually what's dragging US down, there's probably not much we can do. 

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‘Absolute amateur hour’: Trump’s own officials blast his latest botched handling of foreign affairs

 

"YOU'RE GOING TO GET SOOOOO TIRED OF WINNING"

 

 

When we get a democrat back in office to fix the economy... AGAIN... It might be too late. China bought soybeans from us as part of a frade deal, once broken, they can buy soybeans for half the price we charge from other countries. Iran was positioned to only use nuclear for energy, that deal was broken and now they have no obligation to not build nuclear bombs. North Korea continues to test new delivery systems while convincing trumpie-boi they are interested in negotiations. Our allies in NATO, UN, and Europe are just sitting back and ignoring us until we get a reasonable sane person back in charge who understands... well, understands anything at all.

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9 minutes ago, benson13 said:

Everything the gop touches they F Up....and especially this Idiot

Yep. He didn't read his own link, not has his media told him the global economy has been slowing down and will likely take us with it.....

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Just now, benson13 said:

‘Absolute amateur hour’: Trump’s own officials blast his latest botched handling of foreign affairs

 

"YOU'RE GOING TO GET SOOOOO TIRED OF WINNING"

 

 

When we get a democrat back in office to fix the economy... AGAIN... It might be too late. China bought soybeans from us as part of a frade deal, once broken, they can buy soybeans for half the price we charge from other countries. Iran was positioned to only use nuclear for energy, that deal was broken and now they have no obligation to not build nuclear bombs. North Korea continues to test new delivery systems while convincing trumpie-boi they are interested in negotiations. Our allies in NATO, UN, and Europe are just sitting back and ignoring us until we get a reasonable sane person back in charge who understands... well, understands anything at all.

😂You gonna fix the GLOBAL economy, stupid? 

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Just now, benson13 said:

"AND I WILL PAY OFF THE NATIONAL DEBT"

Benson. You got your ass handed to you. Now STFU and go play in traffic like a good little boy. 

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10 minutes ago, DeepBreath said:

Poor Benson probably didn't read his own link. 🤣

So what's new?

 

Let's face it...beanie wants our economy to collapse.  He still suffers from a severe case of 2016 TDS.

 

 

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5 minutes ago, personreal said:

So what's new?

 

Let's face it...beanie wants our economy to collapse.  He still suffers from a severe case of 2016 TDS.

 

 

He’s such a moron. 

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1 minute ago, DeepBreath said:

He’s such a moron. 

That's a mean thing to say about morons.   🤣

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China bought soybeans from us as part of a frade deal, once broken, they can buy soybeans for half the price we charge from other countries. Iran was positioned to only use nuclear for energy, that deal was broken and now they have no obligation to not build nuclear bombs. North Korea continues to test new delivery systems while convincing trumpie-boi they are interested in negotiations. Our allies in NATO, UN, and Europe are just sitting back and ignoring us until we get a reasonable sane person back in charge who understands... well, understands anything at all.

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LYING CRYING ROOM RETARD BENSON IS AT IT AGAIN

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