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DU Home » Latest Threads » Forums & Groups » Main » Latest Breaking News (Forum) » 2-year/10-year U.S. Treas... » Reply #8

Response to OneCrazyDiamond (Reply #7)

Tue Aug 27, 2019, 04:28 PM

8. Sometimes it takes longer to manifest as a recession.

For example, after the yield curve inverted in Feb. 2006, it was Dec. 2007 before the recession began. So this could end up being a flaming bag of dog poop on the incoming Democratic president's White House doorstep some time in early 2021.

Forbes published a handy chart in March 2019 showing different recessions and their yield curve antecedents. Note that several other times, it was about a year between yield curve inversion and the onset of a recession, so it's an inexact science, that's for sure.

One thing I read today is that the government has been buying a lot of Treasury bonds, artificially tightening supply and thereby decreasing the long-term interest rates they pay out. So it's hard to tell if this is really the usual indicator of investor confidence.

However, as this DU thread notes, more and more investors are dumping stocks. So that's another signal that rough times could be ahead.

I confess, I have mixed feelings about it. A stock market downturn will cause a lot of suffering, when that translates to layoffs, retirement fund shrinkage, and other economic problems. However, it could be what it takes to get rid of the Mar-a-Lago Menace, so it may be worth the suffering.

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Zorro Aug 27 OP
Wellstone ruled Aug 27 #1
Control-Z Aug 27 #2
bucolic_frolic Aug 27 #3
empedocles Aug 27 #4
bucolic_frolic Aug 27 #5
Javaman Aug 27 #6
OneCrazyDiamond Aug 27 #7
LineLineNew Reply Sometimes it takes longer to manifest as a recession.
klook Aug 27 #8
OneCrazyDiamond Aug 27 #9
eggplant Aug 27 #10
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