This is a follow up on part 1 which basically said while CFOs expect a recession, they all think that THEIR company will do fine. (Just like all politicians are bad, except for the guy you voted...
This is a follow up on part 1 which basically said while CFOs expect a recession, they all think that THEIR company will do fine. (Just like all politicians are bad, except for the guy you voted for?)
Basically, we are all expecting a recession, because due to nose bleed inflation, the fed is going to hike rates to over 3% by September, which will invert the yield curve which will cause a recession... but otherwise the economy looks really good, (aside from the nose bleeding inflation and impending fear of recession.)
While real GDP is expected to decline for two quarters in a row this year, NBER isn't expected to declare a recession, because the other indicators are all looking so darn positive.
You're on the money. The whole market psychology seems to be so off from all the indicators in the actual economy. If we're being real, with how extremely over-heated the economy has been during...
You're on the money. The whole market psychology seems to be so off from all the indicators in the actual economy.
If we're being real, with how extremely over-heated the economy has been during covid, for no apparent reason, with record-breaking highs with production strongly down, who thought we weren't going to get a recession?
Then there's the energy markets, global logistics issues, War in Ukraine, raw materials crunch- this list is long.
The whole VC capital overheating and silly evaluations of unicorns without hope of ever making a profit, not even starting down the rabbit hole of NFTs and crypto, who hasn't expected this obvious bubble to burst like dot.com?
Everyone's been thinking THEIR investments/pension funds/over-priced real estate are going to be fine. I think we're in for a rude awakening. I can't be happier I took profits in late spring. It wasn't near the peak, but it'll surely give large fraction returns when reinvesting closer to the bottom.
I'd like to provide an alternate read: if each CFO is personally confident about the part of it that they can see most clearly and unsure about the broader picture, it's possible that the...
I'd like to provide an alternate read: if each CFO is personally confident about the part of it that they can see most clearly and unsure about the broader picture, it's possible that the overwhelming dread of the world is influencing their broad negative outlook. That's not to say that a depression isn't going to happen, since especially if everyone's afraid the market can easily crash, but they could be right-ish that their part is currently fine.
That article says that an inverted yield curve predicts a recession, which is different from saying that it causes a recession. The bond market tries to predict whether interest rates will drop...
That article says that an inverted yield curve predicts a recession, which is different from saying that it causes a recession. The bond market tries to predict whether interest rates will drop later and an inverted yield curve means they predict that they will. They're saying "I don't think these interest rates are going to last."
One way for interest rates to drop is a recession but if it were to happen due to a "soft landing" then I think an inverted yield curve would anticipate that too?
Rate hikes can lead to a recession. I think we can all agree on that? https://www.nbcnews.com/business/economy/jerome-powell-signals-potential-recession-looming-economy-rcna34784 St Louis Fed...
Rate hikes can lead to a recession. I think we can all agree on that?
Basically banks accept short term deposits and borrow out loans long term. When the yield inverts, it's just not profitable to lend money any more, so liquidity dries up.
The Fed thinks there is nothing to fear however, and that you are completely correct
Other economists love to point out that Yield Curve is a horrible predictor outside the US, so I guess it's true that economics really is the dismal science?
This is a follow up on part 1 which basically said while CFOs expect a recession, they all think that THEIR company will do fine. (Just like all politicians are bad, except for the guy you voted for?)
Basically, we are all expecting a recession, because due to nose bleed inflation, the fed is going to hike rates to over 3% by September, which will invert the yield curve which will cause a recession... but otherwise the economy looks really good, (aside from the nose bleeding inflation and impending fear of recession.)
While real GDP is expected to decline for two quarters in a row this year, NBER isn't expected to declare a recession, because the other indicators are all looking so darn positive.
You're on the money. The whole market psychology seems to be so off from all the indicators in the actual economy.
If we're being real, with how extremely over-heated the economy has been during covid, for no apparent reason, with record-breaking highs with production strongly down, who thought we weren't going to get a recession?
Then there's the energy markets, global logistics issues, War in Ukraine, raw materials crunch- this list is long.
The whole VC capital overheating and silly evaluations of unicorns without hope of ever making a profit, not even starting down the rabbit hole of NFTs and crypto, who hasn't expected this obvious bubble to burst like dot.com?
Everyone's been thinking THEIR investments/pension funds/over-priced real estate are going to be fine. I think we're in for a rude awakening. I can't be happier I took profits in late spring. It wasn't near the peak, but it'll surely give large fraction returns when reinvesting closer to the bottom.
I'd like to provide an alternate read: if each CFO is personally confident about the part of it that they can see most clearly and unsure about the broader picture, it's possible that the overwhelming dread of the world is influencing their broad negative outlook. That's not to say that a depression isn't going to happen, since especially if everyone's afraid the market can easily crash, but they could be right-ish that their part is currently fine.
That article says that an inverted yield curve predicts a recession, which is different from saying that it causes a recession. The bond market tries to predict whether interest rates will drop later and an inverted yield curve means they predict that they will. They're saying "I don't think these interest rates are going to last."
One way for interest rates to drop is a recession but if it were to happen due to a "soft landing" then I think an inverted yield curve would anticipate that too?
Rate hikes can lead to a recession. I think we can all agree on that?
https://www.nbcnews.com/business/economy/jerome-powell-signals-potential-recession-looming-economy-rcna34784
St Louis Fed thinks it's not unreasonable to claim that inverted yield curves actually cause the recession.
https://www.stlouisfed.org/on-the-economy/2018/december/inverted-yield-curve-cause-recession
Basically banks accept short term deposits and borrow out loans long term. When the yield inverts, it's just not profitable to lend money any more, so liquidity dries up.
The Fed thinks there is nothing to fear however, and that you are completely correct
https://www.federalreserve.gov/econres/notes/feds-notes/dont-fear-the-yield-curve-reprise-20220325.htm
Other economists love to point out that Yield Curve is a horrible predictor outside the US, so I guess it's true that economics really is the dismal science?
Good links,and that's a good point about banking. Thanks!