Moderator: 3ne2nr Mods
A section of the U.S. Treasuries yield curve just inverted for the first time in more than a decade.
The spread between 3- and 5-year yields fell to negative 1.4 basis points Monday, dropping below zero for the first time since 2007, and the 2- to 5-year gap soon followed. The 2- to 10-year is more closely watched as a potential indicator of pending recessions. But Monday’s move could be the first signal that the market is putting the Federal Reserve on notice that the end of its tightening cycle is approaching.
While the yields on shorter-maturities fell on Tuesday during Asian hours, the spread between 3-, 5-year yields remained stable. Longer-maturity bonds rallied sharply, flattening the long-end of the yield curve. The U.S. 10-year slipped another 3 basis points to 2.94 percent, dropping below the 200-day moving average for the first time this year.
EFFECTIC DESIGNS wrote:OP posted a picture of sources which claims the US economy will crash.
Anybody actually observe those websites he posted? they are all 100% Liberal Anti Trump Propaganda websites.
This is just more proof that the dishonest liberal MSM can never be trusted to report the news. This is why we call them fake news
toyolink wrote:The dow for 2018 has just been bumping between a band of just below 26000 and low of just above 24000.
This seems to be just adequate for traders to make some money but leaves investors in the lurch.
With confidence in about everything questionable and a real lack of any constructive stimulus program, things can go south very easily.
ek4ever wrote:EFFECTIC DESIGNS wrote:OP posted a picture of sources which claims the US economy will crash.
Anybody actually observe those websites he posted? they are all 100% Liberal Anti Trump Propaganda websites.
This is just more proof that the dishonest liberal MSM can never be trusted to report the news. This is why we call them fake news
It was just a search to show that this is something that Americans appear to not be aware of since the Trump govt keeps painting a rosy picture of the economy. The difference is that the Fed added 4 trillion in additional debt which they didn't have in the 2008 crash. Also companies like JP Morgan are buying millions of troy once in silver and other precious metals. Several hedge funds have removed billions of dollars from the market and have it locked up in vaults....not bank or investment accounts...physical money. Sub-prime car loans are at a peak and banks are no longer providing loans to the lending institutions. And as was pointed out above the yield curve is in an inversion despite the fact that the feds fixed the 3 month bonds at 0.02%. At this point everyone is waiting on interest rates to rise.....which Trump is vehemently against....but the Fed has no choice because they need the headroom and need to be at around 5% for short term yields in order to fight a recession. Unfortunately they rigged the system with the artificial low short term yield for so long that they are trapped.
The real issue is that the problems that caused the 2008 financial crisis were never fixed, they were simply covered up and 10 years later we're back full circle except there is a lot more debt....Fed debt is up over 560%
Redman wrote:The market is different from the economy.
History has shown that the Presidential cycle is still intact-and that the Fed is willing to step in and fix stuff in the 2 years before Presidential elections.
As was indicated above-the sentiment isnt sufficiently extreme to indicate a real correction.
IBanks have been over long Gold and Silver for almost a decade.
The market will remain irrational longer that you will remain liquid.
Trinispougla wrote:ek4ever wrote:EFFECTIC DESIGNS wrote:OP posted a picture of sources which claims the US economy will crash.
Anybody actually observe those websites he posted? they are all 100% Liberal Anti Trump Propaganda websites.
This is just more proof that the dishonest liberal MSM can never be trusted to report the news. This is why we call them fake news
It was just a search to show that this is something that Americans appear to not be aware of since the Trump govt keeps painting a rosy picture of the economy. The difference is that the Fed added 4 trillion in additional debt which they didn't have in the 2008 crash. Also companies like JP Morgan are buying millions of troy once in silver and other precious metals. Several hedge funds have removed billions of dollars from the market and have it locked up in vaults....not bank or investment accounts...physical money. Sub-prime car loans are at a peak and banks are no longer providing loans to the lending institutions. And as was pointed out above the yield curve is in an inversion despite the fact that the feds fixed the 3 month bonds at 0.02%. At this point everyone is waiting on interest rates to rise.....which Trump is vehemently against....but the Fed has no choice because they need the headroom and need to be at around 5% for short term yields in order to fight a recession. Unfortunately they rigged the system with the artificial low short term yield for so long that they are trapped.
The real issue is that the problems that caused the 2008 financial crisis were never fixed, they were simply covered up and 10 years later we're back full circle except there is a lot more debt....Fed debt is up over 560%
To an extent they were fixed. Remember the situation was caused primarily by gross corruption is some of the world's leading banks and financial institutions. And it was a worldwide network which when exposed showed a housing racket in Spain, gross corruption in banks in iceland and something similar in Ireland. Hence the knock on effect in Europe. I think the congress put serious regulatory frameworks in place but those were reversed as soon after the election
Remember the govt cut taxes and borrowed money (bonds) to keep the bubble going...but who is going to buy bonds? Americans are broke and have less money than ever before....more personal debt than at any time in history...
.and just wait until their variable mortgage rates start to go up.... and no outside investor going to buy them as bond rates fall and the risk increases.
Miktay wrote:Remember the govt cut taxes and borrowed money (bonds) to keep the bubble going...but who is going to buy bonds? Americans are broke and have less money than ever before....more personal debt than at any time in history...
The average American does not buy US govt securities.
https://www.marketwatch.com/story/heres ... 2018-08-21.and just wait until their variable mortgage rates start to go up.... and no outside investor going to buy them as bond rates fall and the risk increases.
More people may be using ARMs because of the high cost of housing in metro areas but most US homeowners buy a fixed rate mortgage. Last time i checked it was above 85%.
ek4ever wrote:The fixed rate is for a certain period....not over the life of the mortgage
Grim start: Treasury yield curve, market's favorite recession indicator, flattens
JAN 3, 2019
NEW YORK - Traders return to their desks in the new year with a familiar warning signal flashing even more strongly than before — the Treasury yield curve got even flatter, feeding the market’s worst suspicions about the U.S. economy.
Market watchers noted a dramatic compression in what is arguably the most reliable indicator of recession — the gap between the 3-month and 10-year Treasury yields.
This spread hit a post-crisis low of just 18.6 basis points in early New York trading Wednesday, barely half the intraday peak it reached on Dec. 31. The gap has since pulled back toward its opening level for the day of around 24 basis points, but the narrowing trend is hard to ignore as U.S. economic data deteriorate and traders start pricing in the possibility of a Federal Reserve rate cut in 2020.
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