Buy low, sell high. The market got high, and people are selling.
They didn’t worry about a recession during Obama’s 8 years.
(which SHOULD be called “The Great Recession”)
I owned my own home in Seattle until 1997. I then rented and continued to rent until I left in 2011. The interesting thing is that we paid VERY low rent while people paid sky high mortgages as prices went up.
One of the homes we rented was just two blocks away from Paul Allen on Mercer Island. I nice tri-level on a beautiful lot (on what is called the “scar” because they bulldozed all the trees when it was built several decades ago). $1400 a month.
Eventually we paid $1650 for a five bedroom on a 1/4 acre professionally landscaped yard a few miles east of Renton in the highlands. The house was valued in Zillo for 330k when we first moved in and when we left that one in 2009 it had peaked at around $525k, but the collapse brought it down to less than $300k.
The price of that home is now $1.3 million.
We’re in another bubble and it’s going to hurt more than the last one.
Democrat control of the congress is the issue.
I got into more trouble from reading “Seeking Alpha” than at any other time. I advise against it.
I guess they could be right sometime.
The Fed increasing the interest rates multiple times! Purposeful sabotage!
As soon as the Muller madness comes to an end, market will recover.
This curve is NOT inverted, and i wish the press and inexperienced analysts would stop feeding on a naive and crass oversimpification. The T bill rate relative to the long T bond is far from inverted. Forget about 2 or 3 vs 5, and focus on 1 vs 10 or 20. And not “yell fire” or sound alarms until Fed Funds come closer to that level
What we have now (or at least in the works) is a HUMPED yield curve, which is not unusual in late cycle markets. Any student of interest rates will confirm this. Its predictive value is far less ominous. If anything it tells us that a recession is possible in several years.
Humped yield curves have been “transitional” to inverted curves, so it’s not unrealistic to put out the yellow flags. But it’s equally important to remember what Lalso Beryini’s historical research clearly shows about the run-up in risk asset prices during this phase of a long cycle.
Institutional investors (e.g. pensions and insurance companies) will buy the 30 year bond to lock in duration if they smell a serious recession risk, so the 10 vs 30 T-bond segment will have far more predictive value if it inverts more than something like 25-35 bps.That will signal that the big money has moved to a Crisis Risk Offset strategy at which point I’d also head for the hills.
And for students of history, see Sidney Homer’s classic work on the History of Interest Rates. Treasury curves in the 1800s were flat, humped and backwardated during many business expansions. That was before the Federal Reserve, historians note, but the point is that a disinflationary world (technology disruption) with relatively low rates of wage inflation can have very different market signals than what we all learned the hard way by our experiences in 2H of the last century.
None of this makes yield curve analysis useless. Schumpeter’s work established the conceptual framework which stands to this day. But let’s use the tool correctly, folks.
Also this past sell off was triggered by program trading which was signaled by a preset factor of an inversion no matter how small. I think it was .2 % not quite sure. That triggers an auto sell of of industrial and financials and again triggering more automate mayhem.
Div and Cap gains to be reinvested at the end of the month.
Revisiting all on 1/1/19
Time To Worry About a Recession?
Of course. Trump has to beput down for good before the election.
After 2 years the economy began to boom. I give credit to President Trump and especially his policies. I don’t believe anyone can deny that. What would happen if Trump’s enemies got their way and forced him out of office? Good Bye to our thriving economy. I believe that TDS is causing the decline in the market. I believe there are people in our government who will do ANYTHING to get their power back. There are always unintended consequences. Seems the left, especially the news media, cannot get over the fact that Hillary lost - and when she did they lost their power. If they help our President to fail, so goes our country.
Run, run, run away the sky is falling.
Or, is it my hair is on fire.
Just don’t know anymore.
Think I’ll just panic for the hell of it.
Bull$hit. These “financial analysts” have no more idea about the future than I do. When their words turn out to be false, nobody remembers them.
This is veeeeeery interesting for me ... I’m moving all my IRA assets back into the market next month. A decline, or mini-correction, in the market would be to my advantage.
IMO, I wouldn’t be surprised if george soros and/or other lefty billionaires are manipulating the markets.
The US economy is seriously out of balance: Stock values are rising, but can be worth -0- tomorrow; cash/interest on savings are less than 1%, but will never be worth less than the principal. Savings rates should be at least 6% to provide the economy with real money, rather than fiat money to feed the stock market.
Presently, the 30 year is 23 basis points higher than the short term.
In the mean time listen and watch this and sing along with
Louis Armstrong - What A Wonderful World [HQ]
8,857,701 views
What A Wonderful World: Lyrics
I see trees of green, red roses too
I see them bloom for me and you
And I think to myself what a wonderful world
I see skies of blue and clouds of white
The bright blessed day, the dark sacred night
And I think to myself what a wonderful world
The colors of the rainbow so pretty in the sky
Are also on the faces of people going by
I see friends shaking hands saying how do you do
They’re really saying I love you
I hear babies crying, I watch them grow
They’ll learn much more than I’ll never know
And I think to myself what a wonderful world
Yes I think to myself what a wonderful world!
https://www.youtube.com/watch?v=21LGv8Cf0us