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Bond Curve Yield Inverting(Indicator of Last Three Recessions)

By NuttBoxer following x   2018 Aug 8, 5:35pm 610 views   10 comments   watch   sfw   quote     share    


Seems like more than a few people are getting nervous about getting their loans paid back...

1   MrMagic   ignore (11)   2018 Aug 8, 6:22pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

To quote one of our popular posters here: "Just following the excellent trend line started from the Obama days".
2   MisterLefty   ignore (0)   2018 Aug 8, 6:40pm   ↑ like (3)   ↓ dislike (0)   quote   flag        

Predicted 10 of the last five recessions....
3   marcus   ignore (3)   2018 Aug 8, 6:53pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Fun tool. Move the vertical bar on the stock market chart to see what yield curve looks like at market tops. Or play the animation. It flattens out but doesn't go very inverted. With exceptions such as when short term rates were way above long rates when Carters appointee Volcker was killing inflation.

The thing that's different here is how low rates are in general. But that's presumably reflecting the amount of debt out there among other things.

https://stockcharts.com/freecharts/yieldcurve.php


NuttBoxer says
Seems like more than a few people are getting nervous about getting their loans paid back...


I don't consider myself anything like an expert (not that I was before - just specialized within a little corner that was interest rate related - long ago).

Interesting to observe that at the very short end of the curve interest rates were near zero for most of the Obama years, starting with the crash. Maybe now, it's not so much that lenders are getting nervous, and more that they are actually making more business loans. Also perhaps not allowing a "carry trade" that was being done for several years.



I would agree that caution is warranted, but then I've thought that ever since our Orange leader was elected.
4   clambo   ignore (4)   2018 Aug 9, 8:10am   ↑ like (1)   ↓ dislike (0)   quote   flag        

I don't worry about the "inverted yield curve".

I remember the interest rates rising from 8.5% above 13% so I still love stocks.

I always love stocks anyway; notice those young people who have lousy jobs with iPhones in their pockets?

In a week or so Apple will pay me another dividend over $1000 bucks. Yield curves are not going to stop this from happening.
5   NuttBoxer   ignore (2)   2018 Aug 9, 9:59am   ↑ like (0)   ↓ dislike (0)   quote   flag        

clambo says
I always love stocks anyway; notice those young people who have lousy jobs with iPhones in their pockets?

In a week or so Apple will pay me another dividend over $1000 bucks. Yield curves are not going to stop this from happening.


Apple has peaked at the point in their history when they're putting out some of the shittiest, least innovative products to date. But I'm sure that has nothing to do with where they're stock is going in the future if yield curve continues it's trend, and more risk-averse people pull out of risky markets.
6   MrMagic   ignore (11)   2018 Aug 9, 10:19am   ↑ like (0)   ↓ dislike (0)   quote   flag        

NuttBoxer says
Apple has peaked at the point in their history when they're putting out some of the shittiest, least innovative products to date. But I'm sure that has nothing to do with where they're stock is going in the future if yield curve continues it's trend, and more risk-averse people pull out of risky markets.


7   clambo   ignore (4)   2018 Aug 9, 12:53pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Apple may not be making new innovations to please some since there is no new form factor for a computer possible; they are all made already.

Hand held, tablet (3 sizes), various laptops and desktops. What other computer shape/size is even possible?

I don't own one, but the iPhone 10 (called X) is an amazing piece of equipment. I use a cheapo motorola lately myself but I love to see those kids salivating over them.

Apple still makes a ton of money and people love the brand.

Interest rates will have to go up more for people to leave stocks for crummy bonds.
8   Quigley   ignore (0)   2018 Aug 9, 4:09pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

clambo says
Interest rates will have to go up more for people to leave stocks for crummy bonds.


Yah this is the real issue. The more people who want something the more valuable it is. Right now, people with money to invest are looking at bonds and saying “yuck!” They’ve been saying that for a couple years now as the stock market increased 50%.
9   Evan F.   ignore (0)   2018 Aug 9, 4:34pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Apple is going nowhere. They're an extremely well run company. They make good- to great products at a premium price that people seem willing to pay (and I own a Pixel 2xl). Christ, their average PE over the past 5 years is something like 15, which almost makes them a value play. You might be buying them at a peak right now, but if you're long for 5 or more years you'll get plenty from AAPL.
10   NuttBoxer   ignore (2)   2018 Aug 10, 11:26am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Evan F. says
They make good- to great products at a premium price that people seem willing to pay


We all use MAC Pro's at my work, and while I like the OS and touchpad much better than any laptop I've used previously, their quality is for shit. My return key has a crack down the middle of it, and another co-worker had to replace his because of bad HDD sectors after only two years. And no one here likes the new Pro's, the touchpad is too big, and interface is much less intuitive than before.

And then there's all the proprietary shit they do. Ever tried backing up an Apple product without using time capsule? Or want to use that usb cable that you've kept in stellar condition from a few years back? Or how about plugging an HDMI cable in?

I WAS a big fan of Apple, until I started using their products a lot...




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