Posted on 12/27/2005 1:36:38 PM PST by SierraWasp
Most people just thing I'm full of IT!!!
You need that when you live out as far past the end of the power lines as you do.
By the way... where'd you decide to put that extra cash?
In a sock.
I'll bet a lot of sellers don't even know what an inverted yield curve is. Their broker called and said, while winking to his amused buddy at the office, "you'd better get out now Sidney, this inverted yield curve thing is going to kill stock prices!"
Or 'Sidney' read some sensationalism in the media and did a solo panic.
I live at the end of the power line! And my Hummer rescue vehicle is one mean little Toyota SUV!!! (I will now have to add VOLVO SUV rescue vehicle, for sure!)
And last, but certainly not least, you're not supposed to put your cash in a sock! You're just supposed to put a sock in it!!!(snort!)
Smart.
Wrong, tax code specifies that for stock and bonds, the trade date is the date to be put down on the Schedule D. See IRS instructions.
IIRC, the market lost more than 20% in less than three months. Not exactly what I'd call shallow, but it was certainly temporary, thanks to Greenspan slashing interest rates and the fed bank in NY organizing the bailout.
The doom and gloom was rife back then and many were predicting a recession and global economic contraction. I think the S&P gained about 50% during nine months after the crisis.
The markets are still driven by emotion today as evidenced by their reaction to the yield curve inversion.
You're closer to the truth than either of us would want to admit.
I think that many years ago the IRS required year-end losses to be reported as of the settlement date, which might be January __, but gains on the trade date.
Just when I was starting to be proud of my mutual funds--hopefully this will not signal a deeper drop in the market. The FED should be at the end of rate increases.
Just when I was starting to be proud of my mutual funds--hopefully this will not signal a deeper drop in the market. The FED should be at the end of rate increases.
An inverted yield curve is an imperfect forecaster of a "general economic recession" but is considered FAR more accurate predictor of a "corporate profits recession".
I have to consider this at least somewhat perilous for the markets because 1) markets measure corp. profits, 2) corporate profits have been very high, however, that being based on 3) accomodative monetary policy and profligate gov't spending, both of which are supposedly coming to an end. All leading me to believe, and it is a belief, that what's driving the yield inversion is a short term demand for capital [demand for capital drives bond prices UP which drives their yields DOWN]....and yet....corp coffers are allegedly brimming with cash. So what's up with that?
It's lousy enough trying to formulate opinions in a world of pure and unrelenting media spin, but making financial decisions in that world is a frustrating game indeed.
IMO, markets head lower.
http://www.iseoptions.com/marketplace/statistics/sentiment_index.asp#
SCREAMINGLY bullish sentiment is not good.
(Latest bulletin from: http://BigCharts.MarketWatch.com)
What are you saying? That the yesterday's yield curve inversion doesn't have any predictive power when it comes to recession? Are you coming over to my point of view?
The yield curve is an excellent indicator of how much the Federal Reserve is manipulating the market, and whether they are overdoing it in either direction. Thus it can be used to predict recession, since it is the Federal Reserve that causes them in modern times.
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