Countdown to Inverted Yield Curve

And this effects strip clubs how?

^^ okay, should have put an [OT] in title. I’ll let you answer your own question.

Correct assumption. Start taking chips off the table slowly over the next 1-2 years.

Of course Burlington Ho will have to opine some contrarian statement to the OP.

By the way OP, I am seeing a 2.55% on the 2 year and a 3.05% on the 10 year for a 50 basis point spread.

Not sure where you are getting your figures from.

^might be a good time for real estate w/ mortgage rates starting to rise, cash will be king again.

Meat72, check your 10 yr yield again. I check Bloomberg app, treasury.gov, and federal reserve.gov, they all agree that 10 year yld has been, today and Friday, about 2.93%. Using that number we have 0.38% spread.

@Meat72,

This is getting a little tiresome. Obviously an inverted yield curve is a bad sign for the economy. But my point is that the inverted yield curve doesn't *cause* the problem. It's a symptom, not a cause. If you believe that the inverted yield curve is itself the sole cause, then you're the contrarian, not me, because no economist or analyst would accept that explanation. But you don't need to wait for the inverted yield curve to happen: we've already started to have equity market turbulence. It started last January. Waiting for the inverted yield curve now would be like waiting for your oven timer to go off when you can already smell that your food is burning.

This is because the inverted yield curve AND the declining equity market are BOTH actually pretty decent indicators of future recessions. So I fail to see how watching the curve can help you to predict the stock market if they're moving at exactly the same time.

^^^ IMO, watching the curve can help because it allows one to predict, and locate on a timeline, when investors are most likely to shift their allocation from equities to short-term fixed income. Do you think it’s merely coincidence that the equities market falls in sync with the rise in prices of short-term fixed income securities? The common sense (or perhaps not so common) is that it is less risky to buy short-term bonds of yields equal to the expected return in the overall equities market. But I’m going to give you the benefit of the doubt that you already know this and are talking about something entirely different.

10 year 2.924%
2 year 2.553

So yup, about 35 bps.

But the Treasury spread getting tight does not necessarily mean that inversion is imminent, nor by extension that a Recession is on the horizon. The yield curve threatened to invert several times during the hot economies of the 80s and 90s, yet actual inversions and recessions did not come for several years after.

@FTS said "Do you think it’s merely coincidence that the equities market falls in sync with the rise in prices of short-term fixed income securities?"

If the prices of short term fixed income securities were rising, then short term rates would be falling... and we probably wouldn't have an inverted yield curve, now would we?

Anyway, correlation depends on whether we're talking about intraday moves or long-term moves. Over the long term, sure, the stock market tends to be positively correlated with the bond market: interest rates go down, bond and stock prices go up, everyone's happy except for the shorts.

But intraday it's a different story. Often rates will go down when the stock market goes down, and vice versa, and it simply means that short term traders are fleeing risk on that particular day.

Here's my take: an inverted yield curve means that investors are demonstrating a preference for long-term fixed income over short-term fixed income and equities. They do this because they anticipate an economic slowdown, with falling short term rates and an equity bear market. They want to lock in safe long term rates now while they still can. Their movement out of equities and into long term fixed income is what causes the stock market to go down. But it all happens in lock-step, simultaneously and instantly. So it's not very predictive. Which means that something else is responsible for both the inverted yield curve AND the volatile stock market.

Bring it on, sooner all these bubbles crash, the better.

SJG

That funny FTS. If you go to the treasury Department’s yield curve chart it shows 2.55% (2 yr) and 3.05% (10 yr). I use the search “yield curve chart” and it takes me to the treasury department’s website for all interest rates on the short end all the way to the long end. It differs from your sources.

The finer details are moot but the same point is enforced. The long end being taken over by the short end is the death cross, and we are gradually getting closer to it. Some say it can be up to a 6 month lagbefore equities are shocked after it crosses.

Ho Factory, what did you say? I don’t have time to absorb SJG-Esque diatribes with a bunch of red herrings tied into it. At least FTS was concise.

^ ^^ ^^^ ^^^^ ^^^^^ ^^^^^^ ^^^^^^^
Homo!

I can administer acts of mercy, for those who leap from offices that are too low.

SJG

@Meat72,

A six month lag?! You're kidding me, right? The volatility in the equities market already started all the way back in January. Remember all those times when the Dow was down 500+ points? Who knows where the stock market will be by the time the yield curve fully inverts?

So the simple explanation is that the long end of the yield curve predicts what the short end will look like sometime in the future. Inverted yield-curve seems to correlate well with US recessions, although the correlation doesn't hold up that well in other countries.

The US market seems to be way overvalued and ripe for a big correction:

http://www.multpl.com/shiller-pe/

..and a global trade way started by an incompetent and clueless US president should be great for the markets, too. /s

@BHF a correction is 10% or more, yes the Dow dropped almost 650 basis points once recently and had a few dips approaching or I’ve 400 basis points but with rhe Dow around 25000 we aren’t in correction territory yet not until we hit drops over 2000 points and there is still some room for the bull to run although I’ll grant You this trade war stuff is annoying.

^^^^^ Professional Gambler, putting money into things which he has no other type of connection to and could not possibly know anything the pro fund managers don't already know.

Sad.

SJG

HK Bar Sweetie. She has what many girls lack, enough ass. And she knows that besides for the bed, high heels are also for the shower. As @n0tmyf1r5t explained, the shower is the place for anal.
http://hktijuana.com/assets/img/gallery/…
http://hktijuana.com/assets/img/gallery/…

Another HK Bar Sweetie
http://hktijuana.com/assets/img/gallery/…
http://hktijuana.com/assets/img/gallery/…

Lot Lizards
https://www.youtube.com/watch?v=1M2NCpgE…
https://www.youtube.com/watch?v=kWXdnzLQ…
https://www.youtube.com/watch?v=_Nlc6qNH…

TJ Street
https://c2.staticflickr.com/8/7290/96201…

Lingerie
https://www.aliexpress.com/item/2014-New…

https://www.wickedweasel.com/en-us

http://g01.a.alicdn.com/kf/HTB1TB0hIXXXX…

Rev. William Barber: U.S. Policies on Healthcare, Poverty Are Immoral & a Threat to Democracy
https://www.democracynow.org/2018/6/15/r…

Jet Strip Cabaret, Lennox CA, pricey
http://jetstrip.com/dance-specials/

Erwin Kreyzig
https://www-elec.inaoep.mx/~jmram/Kreyzi…

Analogy Simulation Environment in Python
https://github.com/Tijl/ANASIME

Analogy delivers simulator, redefines strategy
https://www.embedded.com/print/4036892
https://en.wikipedia.org/wiki/Saber_(sof…

DSPACE
https://www.dspace.com/en/inc/home.cfm
https://en.wikipedia.org/wiki/DSpace

HK Bar Sweetie. She has what many girls lack, enough ass. And she knows that besides for the bed, high heels are also for the shower. As @n0tmyf1r5t explained, the shower is the place for anal.
http://hktijuana.com/assets/img/gallery/…
http://hktijuana.com/assets/img/gallery/…

Another HK Bar Sweetie
http://hktijuana.com/assets/img/gallery/…
http://hktijuana.com/assets/img/gallery/…

Lot Lizards
https://www.youtube.com/watch?v=1M2NCpgE…
https://www.youtube.com/watch?v=kWXdnzLQ…
https://www.youtube.com/watch?v=_Nlc6qNH…

TJ Street
https://c2.staticflickr.com/8/7290/96201…

Lingerie
https://www.aliexpress.com/item/2014-New…

https://www.wickedweasel.com/en-us

http://g01.a.alicdn.com/kf/HTB1TB0hIXXXX…

Rev. William Barber: U.S. Policies on Healthcare, Poverty Are Immoral & a Threat to Democracy
https://www.democracynow.org/2018/6/15/r…

Jet Strip Cabaret, Lennox CA, pricey
http://jetstrip.com/dance-specials/

Erwin Kreyzig
https://www-elec.inaoep.mx/~jmram/Kreyzi…

Analogy Simulation Environment in Python
https://github.com/Tijl/ANASIME

Analogy delivers simulator, redefines strategy
https://www.embedded.com/print/4036892
https://en.wikipedia.org/wiki/Saber_(sof…

DSPACE
https://www.dspace.com/en/inc/home.cfm
https://en.wikipedia.org/wiki/DSpace

^Hey stupid tell me how much money you have available to buy a new Huffy, Dumbass know nothing knucklehead.

Really Sad! Guy who believes that putting money into something he has no control over, is better than what he might do with his own efforts.

SJG

@twentyfive,

By my calculations we did have a correction, just barely, during the first quarter. It was around 11 or 12% decline, peak to trough. But it has been a really long time since we've had an actual sustained bear market.

Here's the way it's been playing out: short-term interest rates go up by a quarter-point, and the Dow drops by 100 points... Trump pulls some shit with tariffs, and the Dow drops by 300 points... Trump says he wants to pull out of Nafta, and the Dow drops by 700 points. So there's a difference. Rising interest rates are pretty predictable at this point. Powell has been transparent about telegraphing his intentions, so they won't catch anyone by surprise. (Although the Fed will probably get it wrong in the end, as they usually do.)

Anyway, if the yield curve is flattening, it's probably because investors are worried about the future, and there must be a reason why. Everyone has an opinion. My opinion is that they're nervous about the prospects of a trade war, and they realize that there's probably no additional fiscal stimulus in the works (i.e., taxes aren't likely to be decreased any further). The yield curve is an indicator of investor sentiment... but so is the stock market itself. And neither one is sending a positive signal at this point.

^^ When was there a 11or 12% decline ?
I don’t really care that much I’m almost at 50-50 with more than enough cash equivalents to ride out a normal recession, and as sure as the sun rises in the morning the retreat will be followed by the market rebounding, at some point and I confident enough in the equities that I currently hold, that with a minimum amount of adjustments and fine tuning they’ll be just fine.

^^^

The Dow dropped about 3,100 points from late January to late March of this year. From approx 26,600 down to approx 23,500. Other than that, I agree with everything you said, and there's absolutely nothing to panic about.

^^^And it started the year at around 24,800 and is sitting at a little over 24,650 today, which means that it is essentially flat YTD. If you want to get panicky over every intra-period decline of note then so be it I suppose, but many market participants agree that January was a crazy month and that the Dow jumping nearly 2000 points in a few weeks was a function of irrational exuberance.

So, Trump threatens a 25% tariff against German automakers. OMG, what a fuckin moron. Trade war. The media goes on the attack.

Then, within about a week,our new ambassador to Germany visits the CEOs of Mercedes, BMW, and Volkswagen. They all come out in favor of eliminating all auto tariffs between the US and Europe. The media barely notices.

That’s how negotiations work, when done properly.

To paraphrase John Lennon, imagine no tariffs between the US and Europe, if you can.

Sooner it crashes the better. Bring it on!

SJG

Seymour Hersh
https://www.democracynow.org/shows/2018/…

TJ Street

Girl that knows how to dress to please!
https://www.flickr.com/photos/navymailma…

https://www.flickr.com/photos/navymailma…

More

https://www.flickr.com/photos/navymailma…

https://www.flickr.com/photos/navymailma…

https://www.flickr.com/photos/navymailma…

https://www.flickr.com/photos/navymailma…

https://farm8.static.flickr.com/7403/961…

http://photobucket.com/gallery/user/lift…

https://c2.staticflickr.com/8/7290/96201…

DSPACE, the German Company I've seen lots of stuff from
https://www.dspace.com/en/inc/home.cfm

DSPACE, something totally different
https://en.wikipedia.org/wiki/DSpace
https://duraspace.org/dspace/

TJ HK Bar Sweetie
http://hktijuana.com/assets/img/gallery/…
http://hktijuana.com/assets/img/gallery/…

and

http://hktijuana.com/assets/img/gallery/…
http://hktijuana.com/assets/img/gallery/…

Saber, Simulation Software
https://en.wikipedia.org/wiki/Saber_(sof…

https://www.embedded.com/print/4036892

Seems to be separate:
https://github.com/Tijl/ANASIME

Erwin Kreyszig
https://www-elec.inaoep.mx/~jmram/Kreyzi…

@mark94,

That's great, but it's not really news. Corporate executives don't write policy, governments do. And so far the governments of Europe, Canada, Mexico, and China have demonstrated that they're just as stupid and economically illiterate as Trump is. So far every world leader has responded with retaliatory tariffs.

More importantly, I would just point out that eliminating trade barriers would probably help these automakers anyway. You see, in America we don't just have tariffs, we also have quotas and caps on the number of cars that can be imported. That's one of the reasons why Nissan, Honda, Toyota, Mercedes, BMW, and other companies have chosen to build their factories here. By contrast, American companies like Ford and GM are given preferential treatment, and they frequently build factories in Mexico for export to the US market. So eliminating trade barriers would be very beneficial to foreign carmakers because A) they could choose to ship cars directly to the US from Germany rather than being forced to build them in Alabama, and B) they would have more flexibility to build cars in Mexico and ship them to the US as well.

@rickdugan,

I thought I was pretty clear that I'm not panicking at all. I'm not even slightly worried. Whichever way the stock market moves is really fine with me. I was just pointing out that the long-standing technical definition of a correction is a 10% decline from a high, and it happened in the first quarter of this year. Whether there was irrational exhuberance involved in the run-up is irrelevant - there's always some irrational exhuberance. So what?

Bring it on baby, not just a little crash, but the Big Big Big one, like 1929!

SJG

It is those at the bottom which keep this society going, even though they get very little for their efforts.

"Marx's main categorization was that people are either part of the class of bourgeoisie or the proletariat. The bourgeoisie are those who control the means of production in society, which gives them the power to then control the proletariat."

http://qa.answers.com/Q/How_did_Karl_Mar…

https://www.newyorker.com/magazine/2016/…

https://www.marxist.com/karl-marx-130-ye…

While millions are compelled to eke out a miserable existence of enforced inactivity, millions of others are forced to have two or even three jobs, and often work 60 hours or more per week with no overtime pay benefits. 85.8 percent of males and 66.5 percent of females work more than 40 hours per week. According to the International Labour Organisation, “Americans work 137 more hours per year than Japanese workers, 260 more hours per year than British workers, and 499 more hours per year than French workers.”

Marx and Engels explained in the Communist Manifesto that a constant factor in all of recorded history is that social development takes place through the class struggle. Under capitalism this has been greatly simplified with the polarisation of society into two great antagonistic classes, the bourgeoisie and the proletariat. The tremendous development of industry and technology over the last 200 years has led to the increasing the concentration of economic power in a few hands.

At the base, all this depended on the labour of the peasant masses. The state needed a large number of peasants to pay taxes and provide corvée labour—the two pillars upon which society rested. Whoever controls this system of production controls power and the state. The origins of state power are rooted in relations of production, not personal qualities. The state power in such societies was necessarily centralised and bureaucratic. Originally, it had a religious character and was mixed up with the power of the priest caste. At its apex stood the God-king, and under him an army of officials, the Mandarins, the scribes, overseers etc. Writing itself was held in awe as a mysterious art known only to these few.

SJG

The System (tm)
https://www.tuscl.net/article.php?id=912

Nicki Minaj
http://celebsunmasked.com/wp-content/upl…

http://celebsunmasked.com/wp-content/upl…

https://www.celebjihad.com/celeb-jihad/h…

http://thefappeningblog.com/wp-content/u…

TJ Street
https://c2.staticflickr.com/8/7290/96201…

http://photobucket.com/gallery/user/lift…

https://farm8.static.flickr.com/7403/961…

https://www.flickr.com/photos/navymailma…

https://www.flickr.com/photos/navymailma…

https://www.flickr.com/photos/navymailma…

https://www.flickr.com/photos/navymailma…

House rejects hard-right immigration bill, baring GOP divide
http://www.msn.com/en-us/news/politics/h…

US Treasury
10Y yld minus 2Y yld
Countdown to 0.00%
2/02/15 — 1.19%
8/29/16 — 0.76%
1/03/18 — 0.50%
4/17/18 — 0.41%
6/14/18 — 0.35%
7/11/18 — 0.27%

This yield curve inversion, that that I understand what it means equities will do, but you do guys move your 401k asset allocations? I ask because I'm 92% in equities and 75% Domestic stock. 3% bonds. Or just stay the course?

I ask because I have a (very small) small 401k portfolio. And I'm trying to learn this stuff.

^ check my post on the other thread BTW you are too much invested in equities you need to keep some cash on hand to act on an opportunity that presents itself.

So isn't this a critical time for the Fed to consider cutting rates? Wasn't the Fed raising rates into an inverted yield curve the last time this happened (2007)?

Yellen's probably glad she got fired -- so she doesn't have to deal with the next crash&burn.

US Treasury
10Y yld minus 2Y yld
Countdown to 0.00%
2/02/15 — 1.19%
8/29/16 — 0.76%
1/03/18 — 0.50%
4/17/18 — 0.41%
6/14/18 — 0.35%
7/11/18 — 0.27%
8/27/18 — 0.18%

Miraculously, it appears we are 48 hours away from Canada capitulating to the terms of the US/Mexico trade agreement. This is a 180% change from Canada’s prior position. This would require Canada to open up its banking and telecommunications to US investment, among other things. Intellectual property rights would be protected. All agricultural tariffs and barriers would be eliminated.

This same agreement is already being used as a negotiation template with Japan and the EU, opening up their markets to US businesses.

This is the type of free market, open trade environment, like the modern world has never seen.

The stock market is about to enter a renewed, super charged, bull phase for at least a decade. Maybe two. The interest rate market will adjust accordingly.

Uh, um, well, um. I worked on Wall Street for over 20 years. I only get nervous about the market when people start saying things like " bull phase for at least a decade. " It will correct. And it will start when there is no apparent reason for it to happen.

A major structural change can set the groundwork for a long term bull market. The tax reform act of 1986 was one such triggering event. The balanced budget during the Clinton/Gingrich era was another.

Trump now has 3 positive structural changes going on. Deregulation. Tax reform. Trade reform. Each of these alone could trigger a multi year bull market. Put together, we’ve never seen anything like it for generating a positive business environment, growth, and profits.

But, yes, a black swan could come along to undercut these structural positives. It would have to be one hell of a swan to overwhelm this momentum.

Average tie it takes for a trcddion to occur after the inversion is 9 months to 2 years. However we need to watch leading economic indicators in addition to this, and the most recent consumer sentiment #s show it doing extremely well. Keep an eye on CPI and PPI. If it runs too much higher then caution flags will wave. We’re only at 2% on both which is good. 3-4% is high, and wage inflation is still low along with productivity.

Bottom line, don’t take all chips off the table, but if you e made $10k, $100k, or even $250k in profits the last 5-10 years, keep your profits off the table at a minimum and leave your initial investment alone. Or do a 50-50 approach and take 1/2 your investment into short term instruments like cash.

^^^ should read “ average time for recession is 9 months to 2 years”, and stock market is forward indicator dropping 6 months ahead of a recession.

US Treasury
10Y yld minus 2Y yld
Countdown to 0.00%
2/02/15 — 1.19%
8/29/16 — 0.76%
1/03/18 — 0.50%
4/17/18 — 0.41%
6/14/18 — 0.35%
7/11/18 — 0.27%
8/27/18 — 0.18%
8/13/19 — 0.02%!!!!!!

+1

And best predictor of stock market is probably yield on longer-term bonds.

Don't worry Trump will fix it

How About Countdown to Doing Something Worthwhile, Rather Than Following These Financial Speculation Markets.


SJG


After the swimming pool stuff; check out the girl playing the electric mandolin! I guess she is wearing a flapper dress, unhindered by a bra. Like her big tits. Looks rather tall. And I love the full thighs. Anyone know who she is? Would not be easy to assemble a group of musicians who could play this so well, so much like the original recording. But I really like that one girl. My tastes have changed, post marriage.

https://www.youtube.com/watch?v=nsYenrhb…

Damn. Recession in an election year

US Treasury
10Y yld minus 2Y yld
Countdown to 0.00%
2/02/15 — 1.19%
8/29/16 — 0.76%
1/03/18 — 0.50%
4/17/18 — 0.41%
6/14/18 — 0.35%
7/11/18 — 0.27%
8/27/18 — 0.18%
8/13/19 — 0.02%
8/14/2019 — -0.01% DING DING DING DING.

/THREAD

Truth is most economic expansions don’t die of old age, they are usually killed by policy, the biggest threat to economic growth is this trade war that this moron, Trump has started with no real plan just a lot of bluff and bluster.
This is a guy who’s whole history is not paying for anything dodging bill collectors and filing for bankruptcy protection, if you want a sound economy get a sound President not this bigoted, opinionated ignorant jackass.

^^ Let's vote in Andrew Yang.

It will be interesting to see the Conference Board's LEI this month, it was flat 2 months ago and down last month. If it's down again then we will have three major signs of a coming recession: Inverted yield curve, leading economic index going down, and major declines in tax receipts on corporate income. You just watch, that really low unemployment number is going to start to creeping upwards.

FTS and all, the prices of these securities are determined by the professional managers of the pension, insurance, and hedge funds. There trades are so big that they determine the prices.

You can talk about this or that, and do computer analyses, but it is all after the fact, has zero predictive power, because everything you know is already long known by the fund managers.

So you guys are just playing along in a rigged game. Even if you think you win, it is the rich getting far richer, and you are helping them make it harder for you to live.

SJG

^^ Total bullshit, you don’t know what you’re talking about.

The game is under control of other people, you are actually funding them!

SJG

Somehow, I picture FTS driving on the interstate as the guy who intently checks MPG and range remaining on DIS every minute that he misses seeing a hot female passenger in passing car flashing him.

^^ haha... not that exactly, but you’re not that far off. I have so many Excel spreadsheets and analyses, a lot of them are not even for finance stuff. Most of them are, though. You guys should really pay attention to Bitcoin... it’s coming out of its winter phase and by the middle of 2020 it could really be making big moves, up to 20k, 30k, 40k... maybe 100k by 2022.

But, being the kind of guy who makes spreadsheets... I don’t get a lot of pussy, unfortunately. Instead, I make $8k on one Bitcoin trade and then make an appointment for pussy.

@FTS- someone I respect pointed out that the yield on 10yr treasuries hasn't changed much since 2016. So the inverted yield curve is at least partially a result of the Fed raising rates earlier. So maybe it's more benign than you think. Who knows?

^^^ Something I agree with him about.

if you keep you're job you can do well at the club during a recession

Nothing that you guys talk about here has any predictive power, because it is the professional fund managers with vast computer simulations underway who determine the prices.

Following these simulations, they will bid up the price of an issue, until the simulation says enough. They the just sit.

Or they will dump it down, until the simulation says enough. Then just sit.

Then maybe at some other point, continue, or reverse.

They have vastly more resources to analyze and simulate than you do. And you don't know what they are doing or why.

You are following their lead, when it is they who are driving the prices. They buy low and sell high. But what then are you doing?

And FTS, you sound like a bright guy. You will undoubtedly have talents and abilities which deserve to be put to use. Shouldn't waste you time with what is just glorified gambling.

Gambling hooks people because it is immediate visceral appeal.

http://tickertapemachines.com/files/univ…

As so with the internet, this has gone much further, almost as bad as porn.

None of us here should be spending our time with such things.

SJG

@Random, the same could have been said about the 10 yr yield in 2007; it hadn't changed "much" since 2002.

I think the main reason why it may be that "this time it's different" is because we're at a critical junction that will force a decision about the next major trend in interest rates. For the past 30 years or so, yields on treasuries have been in a descending channel, but now that rates are so low there's more uncertainty on whether or not the trend will continue. Previously, rates bounced back and forth between the descending channel, so if it was near the top edge of that channel then you could reasonably expect it to fall. But now, if we continue with that same trend, then yields will inevitably fall below 0. How long can interest rates be negative? And how negative can they get? The whole idea of a negative interest makes no sense, so it's questionable whether or not the trend will continue. On the flip side, a new upward trend could begin, like we had from the 60s to 1980. But those two options are EXTREMELY different economic conditions, and it's doubtful whether or not it's even possible to begin a new uptrend without financing the government's massive debt with helicopter money. It's like we're between a rock and a hard place, which probably explains why gold has been bought up so much recently.

^^^^^ And the professional fund managers do extensive simulations and analyses. They know more than you do, you are following their leads.

SJG

We have $15 trillion in world wide bonds yielding negative on their debt. If that tells you anything why this time may be different, well I’d still take a US bond yielding positive safely versus non-US debt yielding h negative.

Then there’s the corporate debt, which is refinancing to buy back more shares as that theme continues. I think the US market holds strong with lower growth, and eventually overseas markets will catch up gradually over time, 2-5 years before the US hits it’s next recession

If there is to be a crash, then bring it on! The sooner it comes, the less it hurts innocent people.

And then if only, if only, people could decline to feed the next bubble.

High progressive taxation, 60%, 70%, 90%, would certainly help.

SJG

Don't need money inflating the securities or real estate markets. That is what causes the crashes.

SJG

We are transitioning from a global trade system, that was built to help the post war world 80 years ago, to one that reflects the realties of the modern world. That’s a huge transition that will take many years.

We are at a low point in that transition. Trump is tearing apart the bad deals, especially China, and we are just beginning to assemble the new deals. Congress hasn’t passed USMCA. We are probably a few months away from a deal with Japan and the U.K.

Once those deals are in place, we’ll begin to see something positive come out of this chaos. Until then, it’s going to be a bumpy ride.

Meanwhile, countries should be lowering marginal tax rates and cutting regulations like we did in the US. Politically, they can’t. So, Europe has negative interest rates, which accomplished nothing.

In a nutshell, that explains the whackadoodle interest rates. Incompetent bureaucrats causing more harm than good.

This is the point at which we must abandon Capitalism, and especially this Supply Side Laissez-faire Voodoo.

SJG

Japan surpasses China as largest foreign holder of US Treasurys


Japan surpassed China as the largest foreign holder of U.S. Treasury securities in June.

Japan has added about $21 billion since May, making its holdings the largest since October, 2016.

Japan now holds $1.12 trillion Treasurys, and China has $1.11 trillion, a $2 billion increase from the month earlier, according to U.S. Treasury department data.

China has been a less aggressive buyer of the U.S. sovereign debt, and market players have speculated that one action it could take in the trade war with the U.S. is to lighten up on its U.S. holdings. But there are no signs that is happening, according to traders.

The U.K. is the third-largest holder with $342.3 billion, up from $323.1 billion a month earlier.

https://www.cnbc.com/2019/08/15/japan-su…

I really think this Donald Trump is about the worst sort we could have in the Oval Office.

SJG

China uses dollars to pay its foreign debt, buy all its imports and fund the belt and road initiative.

They used the trade surplus to build their dollar reserves. However, their dollar reserves have dropped rapidly. They’ve cut back on investing overseas and are selling assets to rebuild dollar reserves.

This is just one part of the economic struggle that China is facing. Like Japan in the 80s, I think we will discover the inevitable rise of China is a paper tiger.

I think the Republican's are going to have to yield and impeach Trump. His thematics and crowd pleasing, and upper income tax cutting, all for show. Need someone who can be real, lead us out of the Reagan Voodoo Era, and steer a good course in all of this mess.

SJG

We're on the eve of a recession yet consumer confidence is high, probably because wages are finally creeping up.

If I'm Trump I'm damn nervous because "it's the economy, stupid"

The Chinese Communist Party will end it’s annual retreat in a couple days. At that time, some big decisions will likely be announced. If they send the army into Hong Kong, the stock market will plunge. If they signal a genuine willingness to make concessions on a trade deal, the market will soar.

According to the WSJ, Trump has started a conversation with his advisers about having the US buy Greenland. He thinks the natural resources would be a good investment.

Just another day in Trumpland.

An old college friend of mine worked in Asia for about a decade and he mentioned he really had to be on his toes when doing business with Chinese people bc they were constantly trying to put one over on you - the way he described it was as if that was just ingrained in the culture.

I'm not holding out much hope for the Chinese to come clean per se

^ I think the Chinese are planning on waiting out for the 2020 election in hopes Trump doesn't get reelected and I would not be surprised if they somehow try to help the opposition

China is run by about 2,000 members of the communist party. All their wealth and power comes from the corrupt system they created. They are riding the tiger’s back. If they get off, they will be devoured. Giving in to Trump’s trade demand would be suicide.

Back to the original question about inverted yield, watch this video from Mohamed El Erian. He’s the smartest guy in any room. His view is that the inverted yield is different this time. It reflects a lot of global forces that are complex and challenging, far beyond just signaling a recession.

https://theconservativetreehouse.com/201…

One other thought on China. The 3 largest banks in China are all guilty of doing deals with Iran that are against US law. That’s all the excuse we need to bar them from participating in the Swift banking arrangement, controlled by the US, that is essential to international banking, such as transferring payments between countries.

If we close China to Swift, they would find it nearly impossible to participate in the world economy. Our allies would scream, and our economy would be hurt, but China would cease to exist as a modern nation.

If a trade war expands, we always have that card to play.

^ he’s doing a great job,
“trade wars are easy to win”
farm foreclosures are at an all time high, but don’t worry we’re taking in billions of tariff dollars from China “paid by Americans “
“We will replace Obamacare with something much better and cheaper”
Still waiting dude !
I could go on but it would be pointless your guy is going to leave this country trillions of dollars in debt.
Hope the kool aid tastes good

“ Farm foreclosures are at an all time high”

Wow, even higher than during the depression ? Now, that’s an impressive ( but totally made up ) statistic

“ ready wars are easy to win@

Well, this one isn’t. It’s messy, painful, and chaotic. Nothing easy about it. But, yes, we will eventually win it. And, with the damage that China has done over the last 30 years, the trade war was necessary.

“ we will replace Obamacare”

If we boot the Democrats out of the House majority, and get rid of the remaining Rinos in the Senate, we will

While every recession has been preceeded by the inversion, not every inversion preceeds a recession. More bullshit from the fake news media on both sides.

^ You guys are the Rinos my Republican party was for fiscal sanity, not trillion dollar deficits, my Republican conservatism paid for your tax cuts,
and for the record farm foreclosures are discussed here
https://www.washingtonpost.com/business/…
I know anything by the washington Post that disagrees with your world view is fake news, that's baloney

People on the left are so unwilling to learn they are never going to figure out that no matter how big of a douche bag Trump is, they are worse. SJG is the typical fucktard leftie and I wouldn't let that jackanape water my garden let alone make policy.

^intended to rebut Mark94

"..not every inversion preceeds a recession"

_________________
I think it's six out of the last six inversions predicted a recession -- but who's counting.

...also you misspelled "precedes."

Btw, I was quoting @SkiBum.

Who do you think Trump will blame for the upcoming recession?

^^ You

That was such a witty comeback, @Meathead.

No, I think the blame will fall on Mexican immigrants or the Fed chair Trump appointed.

Washington Post: Farming is hard. If rates go way up, it will be harder. Family farms struggle to compete with Big Ag. Blah. Blah. Blah.

I see nothing about highest foreclosure rates in history.

^^ foreclosure rates? This ain’t 2007.

That might be an exaggeration but the facts are Americans are paying the tarrifs not the Chinese, the deficit is higher than ever, according to the CBO 31 miles of wall have been built in places where the existing fencing was deemed inappropriate or damaged, you guys have to stretch to believe there is a genuine plan this guy is playing it as he goes and he’s done nothing like what he claims.
For the first time in history our President has included one of our allies in a political fight over AIPAC, what do you expect from a man who has so little integrity that he accepted help from the Russians to get elected
As far as China’s Belt and Road program, that’s what he needs to hold up his pants he’s a fat pig, looks fatter than Rosie O’Donnell and getting bigger.

No, he didn’t accept help from the Russians. Comey and his partisans spent 2 years trying to find evidence of this and they came up empty.

Mexicvan immigrants? You mean the scum sneaking in illegally? They are criminals not immigrants. plenty of decent mexicans and the illegals comnstitute nary a one of them. You're a pussy Random. Did I spell that right pussy? By the way simple simon Obama blamed Bush and Reagan for the recession his stup[idity caused. That would be a precedent pussy.

TWENTY FIVE -We get it. Progressives are vermin and therefore worse than Trump not matter how fucking stupid he is.

@Mark does Comeys partisans include Muellar, if so you are smearing a good man, and they said there is no question as to whether the Russians interfered in our election, the probe was rigged so he couldn’t indict That fat fuck spin it any way you like I watched his testimony and you guys are blatantly lying to cover Trumps fat ass.

^ They finally closed the coal mine @dougster are you out of work again lol

^ Oops my bad I meant turd pit where you lived dougie what happened you got outsourced to a shit hole country and you couldn’t cut the mustard what a fuckn loser

Dougie still swallowing semen?

So, here’s a prediction on Tariffs.

We have negotiated a trade deal with Canada and Mexico that is much, much more favorable to the US than NAFTA. Nancy Pelosi refuses to allow a vote on it because it would be a win for Trump.

We know that the UK and US are hoping to have a trade deal negotiated by Oct 31.

We are rumored to be close to a deal with Japan.

As these deals reach a critical mass, a lot of other countries will want a deal. Australia and New Zealand will follow the UK’s lead. Singapore will want to step in to fill the role of Hong Kong. South Korea is already on board.

By January or February, Pelosi will be under tremendous pressure to approve these deals. If she doesn’t, it will be a cudgel that Republicans can use to take back the House.

With major trade deals approved, it will add 1%-3% of growth to an already healthy economy. The stock market will soar. Other nations, including the EU and India, will realize they need to join in. Nations like China, Russia, and Iran will largely be excluded from the world economy.

The tariffs were never intended to be permanent. They were always a tool to bring countries to the negotiating table. In a few years, we will have freer trade between nations than the world has ever seen

@Dougster your such a silver tongued shit licker So articulate it’s impressive that a single called organism like yourself can actually post on a website, you don’t need to make any sense we are all impressed that you can actually function

Wait! Txtittyfag is Dougster?

That’s so awesome! Are you sure he is? I thought Dougster said he was leaving to never be seen again, and I haven’t seen him since. If we did see him, he would be commenting about bitcoin and these sky high markets debating w/SJG and not walking under any high rises.

I want to believe it, but I can’t. Too many pedophiles are out on the loose for Dougster to remain calm on this site, not calling out Randummembers for their stupidity.