Posted on 12/27/2005 10:47:43 AM PST by rhombus
NEW YORK (AP) -- Stocks stumbled Tuesday as the bond market gave signals that in the past have preceded economic slowdowns.
The yield curve, the spread between the yields of short-term and long-term bonds, inverted for the first time in five years. That means short-term interest rates are higher than long-term interest rates. Investors have been watching the yield curve closely because, in the past, inverted yield curves have usually preceded a recession.
(Excerpt) Read more at biz.yahoo.com ...
Yield curve inversion has not always preceded a recesion.
Judging by the sheer insanity of the mall yesterday, the crowds of people shopping, and my liberal brother's comment that the economy sucked....2006 is going to be a very good year.
NYT's sky IS falling..They just hit a new 52-week low!
Hahahaha
Most all predictions are S&P up 11% minimum, DJ at 15000 before year end and overseas seeing records.
With gold, it just happens to be that inflation is the cause for the demand.
High PEs can be the result of unrealistic expectations or falling earnings. Inversion of the yield curve is one of the single best predictors of the stock market which can be proven statistically. If one would have paid heed to this indicator in 2000-2001, one would have avoided all the grief which followed.
WAY too many folks (including on this forum) were expecting Dow 11k this week; the "Santa rally", etc. for it to possibly work.
Usually against profits. Not a lot of people have profits for the year.
If you find out, you can safely take the opposite position.
Why didn't the AP just headline this "COME ON, ECONOMIC SLOWDOWN, COME ON!!!!"?
It's too late. The Fed has already tightened 3-4 too many times. One benefit is that mortage rates are dropping for the first time in months.
More like correlated.
Anyone know if we have an "Investor" ping list here at FR? I am an evil DayTrader, or at least I like to think of myself as a trader, but in reality my returns are less than stellar.
That would be one opinion.
Now that makes entirely too much sense. No wonder you aren't in politics.
Until the GOP starts supporting true conservatives challenging RINOs in the primaries, they aren't getting ANY of my money or time.
Alaska for instance recieved over $12,000 per capita last year in federal dollars, so why can't the state build its own dang bridges? I wonder what the per capita tax collections were from that state, including income and exise taxes. Pols like Stevens are THE problem.
I think trend will not hold this time as it has historically. The Feds intention was to purposely cool the housing market by raising short-term rates. That appears to be working but it has not slowed the entire economy down. If anything, it will be energy that slows the economy from a great bull market in 2006 to a slow but steady bull market.
That generally means recession.
The Fed has already tightened 3-4 too many times.
The trouble is about 90% of that 9% increase was in the form of personal debt.
Most predictions YOU saw.
I sure hope you are incorrect, that would mean a really crappy year for the market in the most likely scenario.
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