The bond market is flashing warning signals of recession on the horizon. Maybe the villain this time will be corporate debt and not the housing market. In a recession, the Federal Reserve reduces...
So we’re proper fucked then? If we can’t expect our government to act as adults on truly petty issues, how can anyone fathom that they’ll be responsible and act in the broader interest of the...
It will be up to Congress to utilize fiscal policy (i.e. Keynesian deficit spending) and a co-ordinated Executive response to blunt the impact of the next downturn
So we’re proper fucked then? If we can’t expect our government to act as adults on truly petty issues, how can anyone fathom that they’ll be responsible and act in the broader interest of the country in a crisis?
It's one signal that's confirming other signals. Prior GDP results revised lower. Looks like much of prior GDP growth was actually due to mobilization for hurricane, wildfire and flood disaster...
it's one signal
It's one signal that's confirming other signals.
Prior GDP results revised lower. Looks like much of prior GDP growth was actually due to mobilization for hurricane, wildfire and flood disaster response. Recent numbers don't reflect the effects of increasing tariffs and trade war. Consumer credit default rates are now rising. Global economic growth is slowing. Tax "reform" looks like a dud, and any stimulus effect is now gone. Corporate bankruptcies are rising.
And from the subject of this thread:
The ratio of corporate borrowing to a variety of metrics — profits and assets, book value or the size of the overall economy — is at or near an all-time high.
Meanwhile, the difference in interest rates between the safest loans and the riskiest — in financial jargon, the “spread” — is at historically low levels, a reliable indication of too much money chasing too few good lending opportunities.
There's nothing certain here, it's all probabilistic. But it seems that the probability of a downturn is increasing.
The yield curve hasn't fully inverted yet. 10 year is still above 2 year and 30 year is above all else. Yet the Cleveland Federal Reserve Bank gives enough credence to the 3-month/10-year...
The yield curve hasn't fully inverted yet. 10 year is still above 2 year and 30 year is above all else.
Yet the Cleveland Federal Reserve Bank gives enough credence to the 3-month/10-year inversion to predict the probability of a recession based on the spread difference. Currently that is sitting at 30%. It's a well researched phenomenon.
If the yield curve fully inverts and stays inverted for a month or longer, what do you think the impact will be on banks that make short term loans, give out long term loans, and expect to make a profit on the difference? What impact will that have on the supply of credit? What impact would a credit crunch have on the economy.
If I remember correctly, the media made a big stink about fearing the yield curve inverting in 2006, but then switched their tune to "baby don't fear the yield curve" in 2007 just when...
If I remember correctly, the media made a big stink about fearing the yield curve inverting in 2006, but then switched their tune to "baby don't fear the yield curve" in 2007 just when unemployment started rising...
In addition to global corporate debt, the US Government debt is well over 110% of GDP. Also house prices are back up to 2008 levels Lastly, some tech stocks are looking a little frothy. Plus there...
The bond market is flashing warning signals of recession on the horizon.
Maybe the villain this time will be corporate debt and not the housing market.
In a recession, the Federal Reserve reduces interest rates to make the downturn less severe. Typically rates fall 5 percentage points.
But if a recession happens now with rates at only 2%, the Fed doesn't have much ability to act.
Since there's no historical precedent for this, if a recession happens in the next 12-18 months, what will happen?
So we’re proper fucked then? If we can’t expect our government to act as adults on truly petty issues, how can anyone fathom that they’ll be responsible and act in the broader interest of the country in a crisis?
It's one signal that's confirming other signals.
Prior GDP results revised lower. Looks like much of prior GDP growth was actually due to mobilization for hurricane, wildfire and flood disaster response. Recent numbers don't reflect the effects of increasing tariffs and trade war. Consumer credit default rates are now rising. Global economic growth is slowing. Tax "reform" looks like a dud, and any stimulus effect is now gone. Corporate bankruptcies are rising.
And from the subject of this thread:
There's nothing certain here, it's all probabilistic. But it seems that the probability of a downturn is increasing.
The yield curve hasn't fully inverted yet. 10 year is still above 2 year and 30 year is above all else.
Yet the Cleveland Federal Reserve Bank gives enough credence to the 3-month/10-year inversion to predict the probability of a recession based on the spread difference. Currently that is sitting at 30%. It's a well researched phenomenon.
If the yield curve fully inverts and stays inverted for a month or longer, what do you think the impact will be on banks that make short term loans, give out long term loans, and expect to make a profit on the difference? What impact will that have on the supply of credit? What impact would a credit crunch have on the economy.
If I remember correctly, the media made a big stink about fearing the yield curve inverting in 2006, but then switched their tune to "baby don't fear the yield curve" in 2007 just when unemployment started rising...
In addition to global corporate debt, the US Government debt is well over 110% of GDP.
Also house prices are back up to 2008 levels
Lastly, some tech stocks are looking a little frothy. Plus there are a bunch of tech unicorns that haven't even gone public yet.