Posted on 02/23/2023 9:24:14 AM PST by Kaiser8408a
The US economy has a case of the summertime blues.
Bull steepenings in the yield curve are generally seen as a precursor to a recession, but they are often preceded by bear steepenings. The 3m30y curve is currently bear steepening, indicating a recession could begin as early as the summer. In fact, the 3m30y curve is now inverted at -94.628 basis points pointing to a recession in summer 2023.
(Excerpt) Read more at confoundedinterest.net ...
Haven’t been in a recession for a year?
Been telling my neighbors and friends, the pain is only beginning.
I remember the 70’s under carter, the next 2 years will make people pine for those years!
According to liberals a recession is new normal, forgotten Americans like the peons in East Palestine don’t really count when it comes to the economy
This is far more frightening than the Carter malaise was because we have NEVER had this amount of debt at every level from the individual through municipalities to state governments and with the Fed. On top of this, the unfunded mandates make true cost cutting very difficult regardless of how many accounting games they play.
Furthermore, real wealth as measured by assets is collapsing as home values and portfolios decline. Higher energy costs and excess inventories will continue to provide negative pressure on GDP. The current administration is incapable of doing the things it will require to begin a recovery - the only thing DC wants to do is spend more money we don’t have which will increase inflation.
One of the most telling indicators is from the credit card companies who are warning that “customers” are not only failing to pay down high interest debt, but they are increasingly using credit to pay basic bills.
We are in deep trouble and almost all of our “money media” are focused on politics and the stock market - not the real economy. I feel horrible for my kids because we are leaving them a real mess.
It is irrational to expect a “soft landing” after such an orgy of spending and money printing as we have had.
Nobody in their right mind should ever have thought we would not have a recession. We have never exited a period of growth without a recession.
Xiden has made the situation much worse though by continuing to spend and regulate. Both have made things worse.
YoY!
Rates still too low, need to be higher. This bout of inflation will likely take 2-3 years to calm down. The sooner the FED gets to 6%, the better.
No recession yet, economy still too strong.
The 30 Year US Treasury Bond is paying 3.891%.
The US Treasury offers 13 Bond and Bill durations from 1 Month to 30 Years.
Every bond between 1 Year and 30 Years is paying LESS interest than the 6 Month Bill.
Very strange - when you consider the massive financial risk from our future deficits and un-funded liabilities (Social Security and Medicare), it is hard to understand why investors would accept just 3.9% for a 30 Year Bond.
It’s not strange at all, the curve is right where it should be given the conditions. I’m loaded up on 3 and 6 month T-Bills, will go longer when the time is right.
Have been buying new 6 and 12 month T-Bills since last fall. The Sept. 6 mo Bills are nearing maturity. Planning to renew them as long as the interest rates are increasing.
Curious timing.
My apartment building recently stopped adding a 3% fee if you pay your rent by credit card.
I immediately switched my rent to my credit card, for the convenience, plus, the cash back benefit.
My FICO credit score instantly dropped 4 points, even though I pay 100% of my bill every month!
“It is irrational to expect a “soft landing” after such an orgy of spending and money printing as we have had.
Nobody in their right mind should ever have thought we would not have a recession. We have never exited a period of growth without a recession.”
It will be difficult to get out of this without a recession, agreed. Yes, we have exited periods of growth without a recession, 1995 was an example. Soft landings do happen, but wages are higher and consumers are spending. So that’s pushing inflation. Housing sales are declining, which is necessary, housing is 30% of inflation.
So people have make up their minds about what they want. What they want is a free lunch forever and that’s not going to happen. We just had 2 years of free lunch and the bill is arriving now.
I take the points too, but if they are not paying the balance they are simply postponing the inevitable and ALL of us will pay for it too.
“My FICO credit score instantly dropped 4 points, even though I pay 100% of my bill every month!”
If you pay your card off every month you are known as a dead beat in the credit business. You have too much open credit available because you pay the cards off, that hurts your score. I get dinged for that and for not having a mortgage. All my real estate is free and clear but the credit companies assume you don’t have a home if you don’t have a mortgage.
credit companies assume you don’t have a home if you don’t have a mortgage.
Should read: “assume you don’t ‘own’ a home...”
OK.
So, why are you not locking in 3.9% for 30 Years?
Just ten months ago, the 6 Month rate was paying less than 1%.
Because I’m just storing money and getting tax-free income until I use that money for stocks and real estate. I’m not interested in long-term bonds. When I invest for the long term I buy real estate.
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