Dow slumps triple digits as Treasury yield curve inverts (recession indicator)

MarketWatch.com (by Dow Jones) ^ | 12/27/05 | Tomi Kilgore

[SierraWasp]

There went the Santa Clause Rally, right down the toilet thanks to the bond market!!!

[NeoCaveman]

Thank the Fed.

If they hadn't overreached in their raising of short term rates, there wouldn't be a yield curve inversion.

[SolidSupplySide]

Dow slumps triple digits as Treasury yield curve inverts (recession indicator)

I remember clearly the recession of 1998.

An inverted yield curve is a good recession indicator except when it's not.

[loreldan]

ditto

[Gordongekko909]

I believe the term you're looking for is "right once in a row."

[mhx]

Yeah. Me too.

I think it's more of an indicator that the increases in interest rates are going to stop. A lot of times, they stop because the Fed has overshot the target and caused a recession. This time, if they stop in time, maybe that's not a problem (rates were really awfully low before, now they are more normal.)

It would be a great thing if they could just stop raising rates now, and leave things alone and let the economy coast for a few years without screwing around with it.

[TheErnFormerlyKnownAsBig]

I felt the recession pass. It's over already. Everyone can relax now.

[xcamel]

Morons.. loser sell-off to claim losses for 2005. It'll all get bought back in about ummm... 31 days.

[Arizona Carolyn]

You got it! They did the same thing in 2000 and brought on the Clinton Recession that President Bush inherited and was blamed for -- after-wards Greenspan admitted they were too aggressive and what does he do? He does it all over again.

Exactly what is wrong with a strong economy with low inflation that precipitates continual rises in the short term rate?

[BostonianRightist]

The Dow didn't drop until people started screaming about "recession indicators".

[NeoCaveman]

Morons.. loser sell-off to claim losses for 2005. It'll all get bought back in about ummm... 31 days.

YOU ARE CORRECT.

Today was the last day of the year to sell your losers and get the tax benefit this year.

I had forgotten all about that. Then again I have no dogs to get rid of.

[Carling]

That is exactly what I was thinking. It's tax-protection week for the big traders.

[SolidSupplySide]

Today was the last day of the year to sell your losers and get the tax benefit this year.

Sellers can get the tax benefit if they sell any time this week.

I don't like blaming any single incident for a one-day move in the stock market. We should all check up on this thread in a few months.

[Grendel9]

YOu got it. End of year profit-taking.

[Little Bill]

The market is driven by rumor, the drop in gas and oil prices are hedge funds locking profits, there has been a lot of play in that area. It seems to be a good time to bargain pick.

[theDentist]

Gee, thanks Fed.

[Beagle8U]

In guessing the markets for trends I follow the relationship of the up/down of the Dow V S+P.

Most of the true trends will show the S+P up/downs at aprox. 10% in relation to the Dow.

Thats what I see here, something is coming.

[q_an_a]

i got $35 oil by the end of the year wrong - in my fantasy game, but speculators are going to pay for betting against the American dream in 2006.

[NeoCaveman]

Sellers can get the tax benefit if they sell any time this week.

Doesn't it still take 3 days to settle (t+3) in which case tax losses taken tomorrow will be settled in the new year.

[SolidSupplySide]

You are all on record as saying today's stockmarket activity is the result of end-of-year tax selling. Is that a prediction that the stock market will decline all this week? If the stock market rises over the next three days, how can you reconcile that with your tax selling theory? Will you remember your explanations for today's activity on the stock market after today?