Posted on 08/14/2019 5:00:12 AM PDT by Carriage Hill
Moody's Capital Markets Chief Economist John Lonski on the U.S. trade tensions with China and concerns about the U.S. economic outlook. The yield curve is blaring a recession warning.
The spread between the U.S. 2-year and 10-year yields on Wednesday turned negative for the first time since 2007. Such a development has occurred ahead of each and every U.S. recession of the last 50 years, sometimes leading by as much as 24 months.
IIRC, didn’t Obama take food, gasoline, rent out of the inflation indicator?
The recession is not scheduled for another 6 to 8 months to be ripe for the election. These things require careful planning - - George S.
As they say, the yield curve inversion has predicted 11 of the last 6 recessions.
Trade wars are good and easy to win.
BINGO! Your post fits my thinking.
Plus, we cannot predict the weather, let alone climate change and we cannot predict the markets, let alone the economy.
I’ve read countless articles on such predictions and the vast, vast majority are fertilizer at best.
So I think I’ll print this thread, compost it (it’s half there now) and put it in the garden.
No, you do not recall correctly.
“IIRC, didn’t Obama take food, gasoline, rent out of the inflation indicator?”
Yup, as long as the price of a Bentley stays the same there is no inflation.
The ONLY chance democrats have at the white house in 2020, and they know it, is a complete economic collapse... Or some other black swan event.
So the inversion curve has happened ever time prior to a recession.. sometimes by as much as 24 months? So tell me, exactly how long between inversion curves does this typically take?
24 months is a long window.
Business cycles, no doubt, but given the US economy has been restricted for nearly 2 decades, I hardly thing 2-3 years of growth have made up for the nearly 16 of anemic growth before it.
I’m not an economics expert by any means, but I do know something about algorithms. Algorithms, like those used by Google, the Global Warming alarmists and others, can be developed to deliver intended outcomes. In the case of the two aforementioned examples, they do so very, very well.
No, Food and Gasoline are never part of the inflation calculation because they are considered “too volatile”.
Of course this allows them to claim low inflation, while food costs climb through the roof... Beef and Dairy STILL have not returned to anywhere near normal inflationary and outpaced inflation by a country mile.
I still remember September, 2008, when the stock market crashed in a hour and McCain returned to Washington to “focus” on it, while Obama kept campaigning.
It was as if Obama knew it was coming...
Somebody pulled the plug on billions of $ in a short time period.
I wonder who caused that and what was their goal?
Soros? Obama victory?
An inverted yield curve means the Federal Reserve has manipulated short term rates way above what the market would charge.
For an animation of the manipulation go here:
https://stockcharts.com/freecharts/yieldcurve.php
Amazingly, many FReepers support such manipulation by the Ivy League elites and are against the market.
I remember my brother, back in the early 80’s telling me that Reagan was going to die in office because every president elected in a year ending in zero died in office.
Except he didn’t. The sampling was too low making the “empirical” data really anecdotal.
I’m not saying this will not happen, but that “always being right” regarding something that doesn’t happen is really only anecdotal.
I’ve been at a roulette table where black came up 27 times in a row. But the 28th time you would have lost if you bet on black.
Has anyone considered that when this thing goes red everyone reacts to that causing the outcome that makes it correct? What would happen if it was just ignored? Black tape over the red light and it is still running fine...
Not if it is artificially negative. The economy hasn’t made it negative. The Fed did. The rush to safety by foreigners hasn’t helped the situation. The economy needs more money for growth. Time to open up the spicket.
Recessions will come along. It is part of the business cycle and has been for at least two centuries. Sometimes it is correction. Sometimes it is because of wars and such. Most of the ones I remember have had a clear cause. End of Vietnam, Arab Oil Embargo, dot.com bubble burst.
They have always been predictable in hindsight for at least half a century. We always recover. People who stay in the market wait for the day they break even again and begin to grow value again. People who sell somewhere along the way brag about how fast their investments are growing back to where they were unless they were lucky enough to have new money to invest from the bottom.
The great recession is something the press tried to make happen for nearly two years before it finally did happen. It may not have been contrived but it probably was because of stupid greed and things like credit default swaps and gimme dat mortgages.
In March of 2008 I had bought two new tractors and was working out back, calls were coming in from people looking for people to do work, business was good. Things just felt good. By the end of summer it had all fallen apart at the seams as we remember. The crash didn’t feel right. Recessions before this you could feel coming. If it was planned, they over did it.
I hate to see another one come along. If it is recession the media want it is probably recession they will have. They are always painful. We can never hit the middle of moderate and sustainable growth. Just like most things we lurch from extreme to extreme instead.
Oh shut up!
Tell the UN to lambast China for its aggressive stance towards the people of Hong Kong! China is violating human rights!
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