Yield curve inversion, market instability deepens

So the market is continueing it's latest trend of dropping and going up by thousands of points a week. I guess if you are buying and selling by the day in index you could be doing good right?

Stocks Battered by Wall Street, Reuters

NEW YORK (Reuters) - Global stocks fell on Wednesday, plagued by a flattening yield curve that sparked concerns about an economic slowdown in the United States and weakening expectations of a lasting U.S.-China trade truce, while the dollar steadied.

I've been expecting this since 2017. By this I mean a major slowdown in economic activity. The signs are everywhere that our economy has gone from a business cycle to a debt cycle.

The yield curve is trying to tell us something, Bloomberg

Brace yourselves everybody, a recession is coming! Sometime in the next, uh, two years. Or less. Or more.

Earlier this week, interest rates on 3-year Treasury notes turned higher than 5-year rates for the first time since the dawn of the previous U.S. recession, back in 2007. This is called an inversion of the yield curve, or at least a small piece of the curve. The Big One will be when 2-year and 10-year Treasury rates swap places, and bond traders are doing their darnedest to make it happen soon, as Robert Burgess points out. That particular inversion has preceded every recession since the late 1970s. The thing is, as Bloomberg economist Michael McDonough notes in this chart, the yield curve is kind of a loooong leading indicator:

What is the yield curve?

Investopedia

A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, five-year, 10-year and 30-year U.S. Treasury debt. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates, and it is used to predict changes in economic output and growth.

So this can correct, and maybe it will. However this is an issue I've been watching closely. The DOW growth is largely due to confidence, stock buy backs and some of Trumps economic policies that enabled the corporations to enrich themselves with the tax breaks.

This could mean nothing. Just another thing in a long line of things that are making a lot of people go WTF in regards to market data. A lot of this isn't making sense but we are in a unique system with the central banks.

Time has come.
Again

a reply to: Phage

This can actually be a good thing for those of you who position yourself correctly *cough cough* look at the price of silver and gold.

This is an exciting time for those who have the knowledge to grow their wealth on the business/ debt cycle.

a reply to: toysforadults

Sometimes your cards ain't worth a dime.

a reply to: Phage

lol..

Big believer in the yield curve.

www.abovetopsecret.com...

a reply to: BeefNoMeat

We'll see if the 10 and 20 year yield inverts (am I still learning about a lot of this) but I believe it's only affecting the 3-5 year bonds

I'm a little tired took a final today so feel free to correct

a reply to: toysforadults

You know enough to pay attention to it — knowing is half the battle.

The 10-year and 30-year are effectively the same security; if inverts to the 10-year don’t forget what you learned about in class...it’ll pay dividends.

Good luck.

a reply to: BeefNoMeat

good to know

Market volatility provides huge opportunities to make money. Especially if you play with options like I have been the last few years.

a reply to: Metallicus

Just like roullete

originally posted by: Phage
Time has come.
Again

That's pretty good... but I need more cow bell.

Wait until the market hits 8000k then buy in before the government announces bail outs. Same stuff happened in 2007. If I would have bought $5000 of General Motors stock I'd be sitting pretty right now. It was $2 a share back then. Gold was $1800 an ounce. Those with gold might want to sell if it goes over $2000 an ounce.

a reply to: toysforadults

Aside from the long overdue turn down I predict that crypto, in particular XRP, is being secretly shuffled to by all the 1%ers.

See, once I learned of the OTC trading markets where the 1% are buying into discounted/off exchange investments where the data is typically not directed through the exchanges I awoke to a whole new reality.

Bankers can't control the printing of fiat nor the inflation that occurs as a result... they merely play the game to the best possible benefit they can gain from it. Bankers operate by way of shady closed door 1% handshake deals... this will likely remain as is until bankers don't exist.

Crypto remoes the needed trust for a human to manage... it creates a peer to peer decentralized system.

Bankers see the demise of fiat and the entire fraternity of them is slowly moving their fiat to crypto to serve as an insurance policy so to speak. These things can't happen transparently as moving the investments of all investors trusting banks would cripple their current operations.

I mention XRP because it is still somewhat centralized, offering regulators a smidgen of hope for currency control as crypto adoption escalates. Not to mention, China owns approximately 70% of crypto value and the U.S. will NEVER allow China to become the winners when full crypto adoption occurs.

Once the OTC crypto market data hits the exchanges and people see crypto value rising while fiat struggles we all just very well may learn that the next BIG down turn of economics is nothing but a puppet show of shift to crypto adoption.

Whoever is on the front side of the next crypto uptick may not have the concerns of those that require trust of another to manage their funds.

a reply to: ttobban

I'm sure when the recession happens it will be a total shock to many. I don't know why, everything is cyclic. What goes up must come down. The real issue is that there has been an augmented up cycle so I suspect the down cycle will reflect that as well.

When you see “The Jones’s” driving the same vehicles they bought brand new 5-10 years ago. Then you know the recession or right around the corner, if not already so.

a reply to: ttobban

I'm staying away from crypto, it's just not making any headway as an actual currency, the HODLRs or whatever they are called are the only reason for the current Bitcoin price IMO.

I know blockchain is huge though.

originally posted by: toysforadults
a reply to: Metallicus

Just like roullete

If the game is too scary for you then don’t play.