Posted by DigiNomad on 5th of Oct 2023 at 11:01 pm
I know almost everyone keeps saying we're not going to have a
recession, but all I kept thinking during tonight's newsletter was
"that chart suggests an impending recession" on repeat. I mean Dr.
Copper alone should tell the story but there are so many others to
back it up (CAT, WTIC, DBC, etc). Falling yields would be a nice
confirmation, but our fiscal situation may make this time a bit
different (this entire cycle to date has been VERY different from
previous cycles...why would it change now?). The long end is rising
to meet the short end - not the way most expected the curve to de
invert, but that's how it's playing out. Recessions don't kick off
during the yield curve inversion - they kick off when it de
inverts. The inversion is an advanced warning, but de inverting is
typically the trigger (not THE Trigger, but a hell of a lot closer
to a trigger than the initial inversion).
I know almost everyone keeps saying we're not going to have a
recession,"
I never understood why people say this. Of course we're going to
have a recession. It is just a matter of when. A recession is a
natural and expected part of the economic cycle.
Peter SchiffThe yield on the 30-year U.S. Treasury is over 5% for the 1st
time since 2009. At 4.85%, the 10-year will soon following, rising
above 5% for the 1st time since 2007. Yields won't stop rising at
5%. 6% and 7% handles will likely follow in 2024, resulting in a
financial crisis."
Not a bad
prediction
also, the 40 year secular bear market in interest rates (secular
bull market in bonds) ended early last year with that trendline
break on the monthly
people with too much 'recency' bias thinking rates will
eventfully go back down - yes eventually rates will pullback here
once TLT bottoms (remember my monthly chart looking at this as a
5th wave and once complete should have a decent ABC bounce, which
would provide a pullback in rates).
anyway the point is: rates being higher is the new normal for
the next 10, 20 years as rates are in a secular bull market, bonds
are in a secular bear. Again rates won't go up the entire time, but
the floor has moved much higher- not going to see the 10 year
go back to 0.6% like it was a few years ago - maybe for my my
future grandchildren
I never understood this concept of 0-3% rates. In india the
lowest rate we ever had was 9%. Currently home loans are around
12-13% and people think its completely normal. Economy in India is
booming like no tomorrow. Inflation is also pretty much the same
over the years. They have welfare schemes too but not to the level
of madness we have in US
by everyone you mean everyone on CNBC, not us LOL, I"ve never
changed my stance on that, the storm is coming, like a storm, it's
simply been a very slow moving front, eventually it will eventually
reach us
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Posted by steve on 5th of Oct 2023 at 06:20 pm
Thursday Newsletter
I know almost everyone keeps
Posted by DigiNomad on 5th of Oct 2023 at 11:01 pm
I know almost everyone keeps saying we're not going to have a recession, but all I kept thinking during tonight's newsletter was "that chart suggests an impending recession" on repeat. I mean Dr. Copper alone should tell the story but there are so many others to back it up (CAT, WTIC, DBC, etc). Falling yields would be a nice confirmation, but our fiscal situation may make this time a bit different (this entire cycle to date has been VERY different from previous cycles...why would it change now?). The long end is rising to meet the short end - not the way most expected the curve to de invert, but that's how it's playing out. Recessions don't kick off during the yield curve inversion - they kick off when it de inverts. The inversion is an advanced warning, but de inverting is typically the trigger (not THE Trigger, but a hell of a lot closer to a trigger than the initial inversion).
I know almost everyone keeps
Posted by brophy on 6th of Oct 2023 at 08:38 am
I know almost everyone keeps saying we're not going to have a recession,"
I never understood why people say this. Of course we're going to have a recession. It is just a matter of when. A recession is a natural and expected part of the economic cycle.
Yields
Posted by brophy on 6th of Oct 2023 at 09:24 am
Peter Schiff The yield on the 30-year U.S. Treasury is over 5% for the 1st time since 2009. At 4.85%, the 10-year will soon following, rising above 5% for the 1st time since 2007. Yields won't stop rising at 5%. 6% and 7% handles will likely follow in 2024, resulting in a financial crisis."
also, the 40 year secular
Posted by matt on 6th of Oct 2023 at 10:04 am
also, the 40 year secular bear market in interest rates (secular bull market in bonds) ended early last year with that trendline break on the monthly
people with too much 'recency' bias thinking rates will eventfully go back down - yes eventually rates will pullback here once TLT bottoms (remember my monthly chart looking at this as a 5th wave and once complete should have a decent ABC bounce, which would provide a pullback in rates).
anyway the point is: rates being higher is the new normal for the next 10, 20 years as rates are in a secular bull market, bonds are in a secular bear. Again rates won't go up the entire time, but the floor has moved much higher- not going to see the 10 year go back to 0.6% like it was a few years ago - maybe for my my future grandchildren
I never understood this concept
Posted by arun on 6th of Oct 2023 at 10:16 am
I never understood this concept of 0-3% rates. In india the lowest rate we ever had was 9%. Currently home loans are around 12-13% and people think its completely normal. Economy in India is booming like no tomorrow. Inflation is also pretty much the same over the years. They have welfare schemes too but not to the level of madness we have in US
by everyone you mean everyone
Posted by matt on 6th of Oct 2023 at 08:53 am
by everyone you mean everyone on CNBC, not us LOL, I"ve never changed my stance on that, the storm is coming, like a storm, it's simply been a very slow moving front, eventually it will eventually reach us