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Started By
Message
2 year inverted yield curve
Posted on 4/22/24 at 8:19 am
Posted on 4/22/24 at 8:19 am
Usually recession follows the inversion. The Following recession usually comes within months.
We’re 2 years in now and no recession.
I’ve never seen anything like this.
How long can this go?
We’re 2 years in now and no recession.
I’ve never seen anything like this.
How long can this go?
This post was edited on 4/22/24 at 2:25 pm
Posted on 4/22/24 at 8:20 am to SlidellCajun
It has felt like a recession for 2 years
Posted on 4/22/24 at 8:31 am to SlidellCajun
The recession usually comes within 6-12 months after the inversion ends, we're still inverted. LINK
Prior to the current period, the longest lasting inversion was from September 1978 through April 1980 (20 months). The current inversion started at the beginning of July 2022 and is still going (meaning we're over 22 months and counting).
There's no known correlation between inversion depth/length and the intensity/length of the following recession.
Prior to the current period, the longest lasting inversion was from September 1978 through April 1980 (20 months). The current inversion started at the beginning of July 2022 and is still going (meaning we're over 22 months and counting).
There's no known correlation between inversion depth/length and the intensity/length of the following recession.
This post was edited on 4/22/24 at 8:32 am
Posted on 4/22/24 at 8:48 am to SlidellCajun
A short line item thesis is usually to simplistic to explain economics, but I am not an economist. I’m not sure if there is anything novel here to take away, just my own thoughts.
Most of the yield curve inversions were in periods of a secular decline in yields. Coming off of ZIRP, inversion was easy to get to.
Zero rates which put in motion a potentially secular higher rate environment might make a LOT of 2000-2020 indicators obsolete. At minimum, less reliable.
Just like value metrics have been unreliable as we progressed into ZIRP.
Most of the yield curve inversions were in periods of a secular decline in yields. Coming off of ZIRP, inversion was easy to get to.
Zero rates which put in motion a potentially secular higher rate environment might make a LOT of 2000-2020 indicators obsolete. At minimum, less reliable.
Just like value metrics have been unreliable as we progressed into ZIRP.
Posted on 4/22/24 at 9:08 am to SlidellCajun
quote:
I’ve never seen anything like this.
No other president in history has been able to get away with this many executive orders that have completely bypassed Congress and SCOTUS to mask what's really happening. In 2022 Biden methodically raided the SPR on a monthly basis to artificially keep gas at the pump low. He's never attempted to refill that massive non-wartime selloff. In 2022 and now in 2024 he's making rules to forgive billions in student loans circumventing SCOTUS' ruling. But for every action there's an equal and opposite reaction...God help us all when those chickens come home to roost. Could be Carter 2.0.
This post was edited on 4/22/24 at 9:12 am
Posted on 4/22/24 at 9:56 am to SlidellCajun
Started to become worried it's all going to come crashing down out of nowhere.
Posted on 4/22/24 at 11:04 am to SlidellCajun
We already had a technical recession
Posted on 4/23/24 at 2:38 pm to SlidellCajun
Economists have predicted 12 of the last 6 recessions.
Posted on 4/24/24 at 6:59 am to SlidellCajun
History would tell us to keep buying into pull backs as our markets recover with huge returns after these periods. However it looks to me like our next “crisis” will be a sovereign debt crisis and that’s much different than what we’ve faced in the past. In 2008 the Fed was able to paper over the mortgage crisis but can the do that if US debt is the issue?
If you were Japanese buying into the Nekkai crash in 1989 it took almost 30 years t get back to even. But, during that same period if you shifted to US markets you made out like a bandit.
I got conservative in 2008 as it seemed a real possibility that everything was going to blow up. It cost me a little on the rebound and I learned that you shouldn’t underestimate the PTB ability to kick the can down the road and keep things from breaking to protect their wealth.
The truth is nobody knows what the next crisis will be. I agree that the markets and assets are in a bubble but who knows when and what the catalyst will be that triggers a correction or worse yet, crash. About all you can do is not try to time it and keep your head on a swivel.
If you were Japanese buying into the Nekkai crash in 1989 it took almost 30 years t get back to even. But, during that same period if you shifted to US markets you made out like a bandit.
I got conservative in 2008 as it seemed a real possibility that everything was going to blow up. It cost me a little on the rebound and I learned that you shouldn’t underestimate the PTB ability to kick the can down the road and keep things from breaking to protect their wealth.
The truth is nobody knows what the next crisis will be. I agree that the markets and assets are in a bubble but who knows when and what the catalyst will be that triggers a correction or worse yet, crash. About all you can do is not try to time it and keep your head on a swivel.
This post was edited on 4/24/24 at 7:05 am
Posted on 4/25/24 at 9:01 am to SlidellCajun
quote:
Usually recession follows the inversion. The Following recession usually comes within months.
We’re 2 years in now and no recession.
I’ve never seen anything like this.
How long can this go?
We haven't been in fiscal dominance since the 40s.
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