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Thread: The Treasury yield curve just inverted, sounding the alarm for recession

  1. #1

    The Treasury yield curve just inverted, sounding the alarm for recession

    The Treasury yield curve just inverted, sounding the alarm for recession

    Dec 3rd 2018 5:08PM
    The bond market is beginning to sound the alarm of a recession, with an inversion in U.S. Treasury yields occurring on Monday for the first time since 2007.
    The yield on the 5-year Treasury note fell below the yield on the 3-year note, meaning that investors were being paid more to hold U.S. government debt maturing in three years than comparable bonds maturing in five years. It’s not the major curve inversion that investors watch for — the 2-year note holding a higher yield than the 10-year note, which has preceded every U.S. recession since World War II — but it portends that the market is headed in that direction, analysts told Yahoo Finance.

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  3. #2
    That's an important signal. Thanks.
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  4. #3
    Trumplainers have an answer...

    Fed bad but not as bad as Fed + Hillary.

    So support bad policies.
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  5. #4
    I agree the Fed is bad.
    Do something Danke

  6. #5
    Quote Originally Posted by oyarde View Post
    I agree the Fed is bad.
    Maybe we should end it.
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  7. #6
    Quote Originally Posted by Suzanimal View Post
    Maybe we should end it.
    Excellent Idea . I gave that book out for Christmas to some guys who worked for me one year .
    Do something Danke

  8. #7
    I do not know about recession . It is tough to keep the American consumer down from buying more cheap chinese plastic stuff they do not need , but continued sluggish growth is nearly guaranteed so consider the Dow will probably not make it back to the 26K by the end of the year it was at this spring and next year expect a little more sell off . Gold at about 1238 now with upside . Natural Gas is high and eventually that will take money away from consumer spending but it could be offset by cheap gasolines ( wholesale gas currently 1.43 ) . The decline will start eventually but it is too early to tell when . Until then dismal growth as is pretty much the norm for the past 18 years or so .
    Do something Danke

  9. #8
    Been close to inversion for months. Why lock up money for 10 years when you get the same rate short term?
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  11. #9

  12. #10
    Quote Originally Posted by enhanced_deficit View Post
    Already back to 25,200 or - 600 so about a two percent drop .
    Do something Danke

  13. #11
    Need more Tariffs.
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  14. #12
    Historically we are overdue for a recession.
    * Enforce Border Security – America should be guarding her own borders and enforcing her own laws instead of policing the world and implementing UN mandates.

    * No Amnesty - The Obama Administration’s endorsement of so-called “Comprehensive Immigration Reform,” granting amnesty to millions of illegal immigrants, will only encourage more law-breaking.

    * Abolish the Welfare State – Taxpayers cannot continue to pay the high costs to sustain this powerful incentive for illegal immigration. As Milton Friedman famously said, you can’t have open borders and a welfare state.

    * End Birthright Citizenship – As long as illegal immigrants know their children born here will be granted U.S. citizenship, we’ll never be able to control our immigration problem.

    Reprinted from [Nov. 29, 2011]

  15. #13
    Quote Originally Posted by angelatc View Post
    Historically we are overdue for a recession.
    This run up has been long . Lasted longer than I would have guessed .I would have lost a beer on it predicting it so I do not .
    Do something Danke

  16. #14
    Some troubling headlines today:

    Cracks appear in Trump’s claims of China trade agreement

    Wall Street tumbled more than 3 percent Dec. 4 as the U.S. bond market sent unsettling signs about economic growth and investors worried about global trade. (Reuters)

    December 4 at 9:43 PM
    President Trump’s claims of a new trade agreement with Chinese President Xi Jinping showed signs of crumbling Tuesday, with senior officials seeking to play down expectations of a breakthrough and acknowledging that major provisions remained in flux.

    U.S. stock markets took a closer look at Trump’s claims of progress with China and promptly sank more than 3 percent as investors puzzled over competing U.S. and Chinese accounts of the outcome of the Group of 20 summit this weekend in Buenos Aires. The reversals more than erased the tepid gains Monday in reaction to Trump’s initial account of what he said were promises made by the Chinese government.
    Three days after Trump emerged from his dinner with Xi touting an “incredible” deal, U.S. and Chinese officials were offering different accounts of whether there was a 90-day deadline for progress in new trade talks, the schedule for China to increase its purchases of American farm and industrial products, and Beijing’s plans to reduce or eliminate specific tariffs.
    [Stocks are plummeting, but a U.S. recession doesn’t look imminent]

    While Trump tweeted a day after the meeting that China would “reduce and remove” tariffs on U.S. automobiles, his aides acknowledged privately Tuesday that China had made no such commitment.
    “Nobody knows what the deal is,” said one top White House adviser, who was among six administration officials interviewed for this story who spoke on the condition of anonymity to describe internal deliberations.

    It doesn’t seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump’s tweets (which seem if not completely fabricated then grossly exaggerated) with reality,” JPMorgan wrote in a trading note.

    After Trump summit, no mention in China of 90-day deadline or trade ...
    2 days ago - Analysts wondered if Trump and Xi left their meeting with very different ... where the North Korean delegation went home with a very different set of perspectives ... “The Chinese are always playing for time and any pause that ...

    Trump Admits His “Incredible” Deal with China Is Bull$#@! | Vanity Fair
    11 hours ago - At the conclusion of the G20 summit in Argentina, Donald Trump boasted to reporters that he'd managed to strike an “incredible” trade deal with ...

    UPDATE 4-Trump: if no China trade deal possible, "I am a Tariff Man"
    12 hours ago - Trump said his team of trade advisers led by China trade hawk U.S. ... officials are contorting themselves into pretzels to reconcile Trumps ...

  17. #15
    The yield curve didn't actually invert. They played games to get that article headline. It is close probably early next year and there is usually a year lag between when the 2 and 10 year yields invert and a recession.

  18. #16
    So close. Dow was only down 799.

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  20. #17
    Quote Originally Posted by Zippyjuan View Post
    So close. Dow was only down 799.

    So.... Yeah..... That Tweet never actually happened. I would assume you know that but then why would you post it?

  21. #18
    Quote Originally Posted by Krugminator2 View Post
    The yield curve didn't actually invert. They played games to get that article headline. It is close probably early next year and there is usually a year lag between when the 2 and 10 year yields invert and a recession.
    Looks like the 2-10 spread will invert a hell of a lot sooner than next year if the recent trends continue. Maybe next week even.
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