The Trump Presidency Nein: Leistung, Korruption und Lugen

taosjohn · Jun 28, 2019

JohnR said: ↑

The Fed controls short-term rates. The Fed increases them when it is concerned that the economy might be moving too quickly, thereby stimulating inflation. An inverted yield curve indicates that investors believe that the Fed has been rather too successful at its job, not only choking off upcmoing inflation but also slowing the economy down such that the relatively low payouts of long bonds look preferable to the even lower upcoming returns on equities -- because recession is coming.

That is how I think about the matter. But it is shorthand, for a complex relationship.
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It still sounds as though when you boil the jargon away, it is just sort of combining herd instinct with "well, what do you think"-- that fearing a recession can actually predict one by causing one?

song219 · Jun 28, 2019

taosjohn said: ↑

It still sounds as though when you boil the jargon away, it is just sort of combining herd instinct with "well, what do you think"-- that fearing a recession can actually predict one by causing one?
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I don't think so because to have a bagel, demand for all goods and services has to decrease beyond a certain point. I think the bond yield thingie is still partially predictive not causitive.

taosjohn · Jun 28, 2019

song219 said: ↑

I don't think so because to have a bagel, demand for all goods and services has to decrease beyond a certain point. I think the bond yield thingie is still partially predictive not causitive.
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So no one uses this bellwether to make decisions, they just fret when they see it?

JohnR · Jun 28, 2019

song219 said: ↑

I think the bond yield thingie is still partially predictive not causitive.
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It likely has some cause, but more indicative. I distrust explanations that beliefs lead to recessions, because Lord knows the WSJ/business community was rooting for one circa 2009-10, with their ongoing complaint about how Obama and the Democratic Congress was causing "uncertainty" that was preventing businesses from doing their jobs, but despite their wishes stock prices rose and the economy recovered, albeit sluggishly.

roby · Jun 29, 2019

song219 said: ↑

I don't think so because to have a bagel, demand for all goods and services has to decrease beyond a certain point. I think the bond yield thingie is still partially predictive not causitive.
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Well...in the event that the opposite of a bagel appears to be happening hold off on the balloons. You don't want to tempt fate!

onefineesq · Jun 29, 2019

Cascarino's Pizzeria said: ↑

The end of shame.

Didn't MT journalist assualter Gianforte keep his seat last year?
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Not only that, but he is reportedly going to run for governor next year.

Deadtigers · Jun 29, 2019

Recession, Recession, Recession!!

The pain has to come home.

American Brummie · Jun 29, 2019

Deadtigers said: ↑

Recession, Recession, Recession!!

The pain has to come home.
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Mods, kill the heretic.

The Jitty Slitter · Jun 29, 2019

JohnR said: ↑

The Fed controls short-term rates. The Fed increases them when it is concerned that the economy might be moving too quickly, thereby stimulating inflation. An inverted yield curve indicates that investors believe that the Fed has been rather too successful at its job, not only choking off upcmoing inflation but also slowing the economy down such that the relatively low payouts of long bonds look preferable to the even lower upcoming returns on equities -- because recession is coming.

That is how I think about the matter. But it is shorthand, for a complex relationship.
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Yes - the flight to safety becomes most important

The Jitty Slitter · Jun 29, 2019

song219 said: ↑

It doesn't have to do with what's being charged for loans, it has to deal with yields on short-term loans.
Creditors are loaning money to the federal government when they are buying bonds or notes in the case of short term loans. The yield is simply a function of the amount of the maturity of the bond versus how much you paid for it. When the price of a bond drops the interest rate goes up.
My only guess as to how this ties in with an upcoming recession is that people have so little confidence of being able to use their money profitably in the short-term, they put their money in long-term loans instead.
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I would add to that concerns about capital preservation. Equities may attract significant risk, so in terms of multi-asset strategy, a reallocation of money to bonds might reflect concern to balance risk in event of a bear market.

The Jitty Slitter · Jun 29, 2019

taosjohn said: ↑

It still sounds as though when you boil the jargon away, it is just sort of combining herd instinct with "well, what do you think"-- that fearing a recession can actually predict one by causing one?
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This is what we have been seeing in a key UK market. Brexit has likely caused the outlook on top of a difficult 2018

But in simple terms, because lots of companies have a negative outlook, due to high uncertainty, they are all cutting discretionary spending - e.g marketing, new contracts, new investments etc etc. This is said to be on a wait and see basis but that doesn't really make any difference to realities. This then leads to a self fulfilling prophecy where their own sales drop due to decreased marketing/sales plus roll on impact in the wider industry. Next will come large job losses which I expect soon.

IMO we are likely already in the start of the bagel in the UK

The Jitty Slitter · Jun 29, 2019

Disappointing how many conservative commentators appear to support Putin's FT splash on the end of liberalism

However Trump is to dim even to do that

The US President insulting major American cities on foreign soil is a serious breach of an important norm.

The US President interpreting Putin's invocation of "western-style liberalism" to mean the practices of liberal politicians in the western United States is funny as fuck. https://t.co/CjCdKs62Fx
— southpaw (@nycsouthpaw) June 29, 2019

Sounders78 · Jun 29, 2019

The Jitty Slitter said: ↑

Disappointing how many conservative commentators appear to support Putin's FT splash on the end of liberalism

However Trump is to dim even to do that

The US President insulting major American cities on foreign soil is a serious breach of an important norm.

The US President interpreting Putin's invocation of "western-style liberalism" to mean the practices of liberal politicians in the western United States is funny as fuck. https://t.co/CjCdKs62Fx
— southpaw (@nycsouthpaw) June 29, 2019

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And no one is surprised he had absolutely no clue what the question really meant.

chaski · Jun 29, 2019

Funkfoot said: ↑

Better lox in a high interest rate now.
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And watch your rate spread.

Cascarino's Pizzeria · Jun 29, 2019

Funkfoot said: ↑

Better lox in a high interest rate now.
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Investors might get schmeared

xtomx · Jun 30, 2019

Happening right now (4:00 cdt) in North Korea:

Donald Trump invites Kim Jong-un to visit US after stepping into North Korea – live

"Donald Trump has invited Kim Jong-un to visit the US during talks at Korean peninsula’s demilitarised zone after he became the first American president to step onto North Korean soil."

The ignoramus in chief said that going to North Korea was a "great honor."

https://www.theguardian.com/us-news...-to-meet-north-korean-leader-kim-jong-un-live

Auriaprottu · Jun 30, 2019

Just think! This is all going to get worse before it gets better, if in fact it ever does get better...

sitruc · Jun 30, 2019

I shouldn't be surprised by anything, but I looked at my phone and that was the first story on the local news and I was still amazed.

HerthaBerwyn · Jun 30, 2019

Look who's palling around with terrorists.

ElNaranja · Jun 30, 2019

HerthaBerwyn said: ↑

Look who's palling around with terrorists.
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I know, shame on Kim.

HerthaBerwyn · Jun 30, 2019

Too bad Kim didnt kidnap him, only to discover that we dont negotiate with terrorists. This is my elevator pitch for a half hour sitcom version of 'Ransom of Red Chief'

Cascarino's Pizzeria · Jun 30, 2019

xtomx said: ↑

Happening right now (4:00 cdt) in North Korea:

Donald Trump invites Kim Jong-un to visit US after stepping into North Korea – live

"Donald Trump has invited Kim Jong-un to visit the US during talks at Korean peninsula’s demilitarised zone after he became the first American president to step onto North Korean soil."

The ignoramus in chief said that going to North Korea was a "great honor."

https://www.theguardian.com/us-news...-to-meet-north-korean-leader-kim-jong-un-live

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Wasn't sweeps week over a month ago?

dapip · Jun 30, 2019

CFnwside said: ↑

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HerthaBerwyn · Jun 30, 2019

Sweeps Week. Shit. Were old.

argentine soccer fan · Jun 30, 2019

JohnR said: ↑

The Fed controls short-term rates. The Fed increases them when it is concerned that the economy might be moving too quickly, thereby stimulating inflation. An inverted yield curve indicates that investors believe that the Fed has been rather too successful at its job, not only choking off upcmoing inflation but also slowing the economy down such that the relatively low payouts of long bonds look preferable to the even lower upcoming returns on equities -- because recession is coming.

That is how I think about the matter. But it is shorthand, for a complex relationship.
Click to expand...

Yes! I love the fact that there are some in the P&CE boards who actually understand this, because most people don’t.

A recession is coming. In fact, it’s overdue. And it will affect the elections.