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Are you worried of Inverted Yields?

By kt1652 following x   2019 Apr 26, 12:56pm 407 views   10 comments   watch   nsfw   quote     share    


This is more interesting time for equity investors, as opposed to the record run-up of the SP500 since Nov 2016. The US-China trade war is a big wall of worry, as its impact is not just to the two countries but to the entire region around China. Malaysia, Indonesia and others raw material providers to the factories of China are facing economic issues. The yield curve is near or already inverted, depending which periods. In the past, yield inversion signals a slow down and perhaps 12-18 months away from a full blown US recession, which is overdue. But maybe this time is different, Trump has an ace card in his back pocket, he can make a deal with China anytime he wants. You can also count on him to throw the kitchen sink in to juice the economy and stocks short term. That’s what sitting presidents do to win 2nd term, or go to war ala GWB.

So what is your strategy for the next 12 months?

Bet on one more run-up before shtf?

The retail investor aka suckers is always chasing the last winners. One can make money front running them as long as one isn’t greedy. E.g. Tech, EM sectors.

Start rebalancing to more bonds, dividends, metals, cash…?
1   kt1652   ignore (1)   2019 Apr 27, 10:28am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Red flags are flying in the credit-card industry after a key gauge of bad debt jumped to the highest level in almost seven years.

https://www.bloomberg.com/news/articles/2019-04-26/credit-card-alarms-get-louder-as-charge-offs-hit-seven-year-high

3   Heraclitusstudent   ignore (2)   2019 May 30, 6:01pm   ↑ like (1)   ↓ dislike (1)   quote   flag        

Much WS propaganda tries to make you buy at the top. "this time is different" blah blah blah.

This stuff is simple: expansion => unemployment goes down => more sales => expansion.
When you reach the bottom of the labor pool, the fed raises rates and creates a recession. We are there now.
Unemployment claims are at a minimum. Can't get lower. Will start jumping up any week now.

Stocks will go down, if only because many people think they will go down.
4   APOCALYPSEFUCKisShostikovitch   ignore (38)   2019 May 30, 6:47pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

No one needs to wonder why Elon Musk's latest investment has been in low-cost FLAME! THROWERS!
5   willywonka   ignore (3)   2019 May 30, 7:27pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

What is Trump doing about inverted nipples!!??
6   Booger   ignore (3)   2019 May 30, 7:54pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Heraclitusstudent says
When you reach the bottom of the labor pool, the fed raises rates and creates a recession. We are there now.


Interest rates are still extremely low.
7   Booger   ignore (3)   2019 May 30, 7:55pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

APOCALYPSEFUCKisShostikovitch says
No one needs to wonder why Elon Musk's latest investment has been in low-cost FLAME! THROWERS!


Too good to be true.
8   Heraclitusstudent   ignore (2)   2019 May 31, 10:08am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Booger says
Interest rates are still extremely low.

Rates have been falling since the 80s. What does the absolute level of rates mean? Nothing. Just propaganda. Buy Buy Buy.

The only thing you have to ask is: are we gonna flip from deflationary to inflationary.
The answer is NO.
9   Hircus   ignore (0)   2019 May 31, 3:52pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

kt1652 says
Trump has an ace card in his back pocket, he can make a deal with China anytime he wants. You can also count on him to throw the kitchen sink in to juice the economy and stocks short term. That’s what sitting presidents do to win 2nd term, or go to war ala GWB.


I've been mulling this over for a while...I agree, and I feel like there's an invisible "Trump Put" in effect until election day, and he may deploy it. I'm certain of his desire to do it, but I'm not certain as to the magnitude or his ability. If his odds look poor in the months leading up to election day, then probably the Trump Put will lose effect (and, if Trump isn't looking like he will win, I think markets will just plain go sour).

But, ya, I'm thinking of betting on this aspect. Just a little though, as I don't know how to value it.
10   Hircus   ignore (0)   2019 May 31, 3:55pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Heraclitusstudent says
Much WS propaganda tries to make you buy at the top. "this time is different" blah blah blah.


You really don't feel that if say, Trump signed a legitimately good trade deal w/ China next month, that we would rally for significantly longer than if he didn't?

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