Recession coming down the road?

[MillCreek]

https://www.cnbc.com/2019/08/14/stock-markets-wall-street-in-focus-amid-earnings-economic-data.html

We are now in a yield curve inversion, which is a pretty reliable indicator of a future recession.  It will be interesting to see if one happens within the next year or two.  Pay off your debts, increase your savings and update your resume.

[WLJ]

The media sure seems determined to talk us into one.  

[Ben]

These inverse yield curves never seem to have been wrong, though there is quite a bit of wiggle room on when a recession might start. ~6 months to ~2 years is a pretty big window.

I'm actually more concerned with where we are on interest rates. We keep this up, and we're gonna end up like Germany, where with negative interest rates, you have to pay banks to keep your money.

I still submit that 4-5% on a 30 year treasury is a good and stable interest rate. It's not outlandish for loans and mortgages, and it lets banks make a little bit, which means they can pay reasonable interest rates, which are especially good for the elderly, who generally can't survive 10 year stock fluctuations in their retirement accounts, but who also can't survive on 1% payouts in Tbills and the like.

[RoadKingLarry]

Looks like the Dems may get their wish. A recession that gives them more people dependent on the government and they can blame Trump.

[French G.]

Of course it is Trump's fault, but truth is we are way overdue.

[charby]

https://www.cnbc.com/2019/08/14/stock-markets-wall-street-in-focus-amid-earnings-economic-data.html

We are now in a yield curve inversion, which is a pretty reliable indicator of a future recession.  It will be interesting to see if one happens within the next year or two.  Pay off your debts, increase your savings and update your resume.

Recession means job security for me, might be flat COL during that time, but Ag producers will be grumpy and that will keep me employed.

[RocketMan]

The media sure seems to determined to talk us into one. 

This, for sure.  And a recession will tank Trump's already slender re-election odds.  I think that's why the media is pushing recession talk so hard right now.
Even Drudge has been linking to any and all recession related stories he can find for weeks now.  Of course, he's never been a real Trump fan, and he's been slowly drifting left for some time.

[Ben]

If you take another historical datum into account, no president has ever been re-elected to a second term if a recession kicked in during the first two years of his first term.

[TommyGunn]

Experts debate whether or not this inversion curve means we'll have a recession.  OTOH,   predicting another recession is like predicting tomorrow's sunrise:

"Yes,  the sun will rise tomorrow morning .... don't know what time,  but tomorrow.  In the A M."

One report I heard said it could be 22 months out. 
 

Will it hurt Trump?

Given the sheer nuttiness of the democrat menagerie,  I'd like to think Trump's 2020 victory is pretty certain.

Then I remember Obama was reelected.
And elected the first time.

And then I recall Trump's own ... uh .... er.... "irregularities,"  shall I say?

And yea ..... it ain't no way certain.....

 

[charby]

Interesting segment on NPRs "All Things Considered" this am.

[grampster]

TDS is a broad spectrum.  There are money people that would like him gone too.    Especially if they are behind the scenes investing in a bad market.  The media is a given.

[dogmush]

TDS is a broad spectrum.  There are money people that would like him gone too.    Especially if they are behind the scenes investing in a bad market.  The media is a given.

I think a bunch of money folks would like to see more predictability in the .Gov. Even a predictable bad market can be made to make money,  whereas worldwide volatility is really hard on long term strategies. You might make a ton, or you might lose everything.

Trump seems to be pretty hard to predict.

[grampster]

The one issue I disagree with Trump on is the Stock Market and interest.  Interest rates being as low as they are is an aberration not a norm.  The stock market is at a high that has never been seen.  That is an aberration as well. 

Interest rates would be normal at about 4% on savings/CDs/money market.  The problem is that those artificially low interest rates we have are artificially propping up the stock market.  The Fed was slowly increasing those rates which in my view is what good money/investment policy should happen.  Do it slowly over a few years and the market, though it may decrease, could be stabilized.  That's a win win.  That actually was happening and now it's been reversed.

 Retired people and those who are a short time from possible retirement should be able to safely invest in savings instruments.  The banks would be healthier as they could be more conservative.  People are being forced into the volatile market or to be content with very low interest rates on savings.  I don't see where this is good economic/money policy.   

[gunsmith]

The media sure seems to determined to talk us into one. 

WE ARE DOOMED!!! DOOOOOOOOOOMED!!!111

[MikeB]

Recessions have be predicted since before Trump was elected, we were told just electing him would cause one. I think this is more media hopefulness than reality. The economy is doing things it hasn't done in a long time with some transition away from a service economy back to manufacturing. The Fed is doing stupid things, but they have always done stupid things. Finally 800 points is a drop in the bucket today, all the biggest drops have been in the last few years, yet we've also had the biggest gains. By percentages those drops aren't quite so big.

Finally I'm sort of surprised the article would even include this nugget as evidence of economic problems.

"Shares of Macy’s tanked more than 13% to their lowest level in a decade after the retailer posted second-quarter earnings way below analysts’ expectations as heavy markdowns used in spring to clear unsold merchandise weighed on profits."

I'm pretty sure Macy's has been going the way of the Dodo bird for at least a decade now. Malls are not the thing they were in the 80's and that is where that business mostly exists.

[brimic]

Brick and mortar stores are in their death throes.

[TommyGunn]

Brick and mortar stores are in their death throes.

Yea, but horse buggy whip makers are doing much worse.

[MikeB]

I’ll just leave this here. And the DOW is up about 285 at the moment.

https://www.cnbc.com/amp/2019/08/16/stock-market-us-bond-market-trump-china-relation-in-focus.html

[MechAg94]

If you take another historical datum into account, no president has ever been re-elected to a second term if a recession kicked in during the first two years of his first term.

So does that mean Trump is in the clear?  "first two years"

[Jamisjockey]

A mild recession would give me the opportunity to get more bang for the buck in my TSP over the next few years, and then would actually help our other business. People don't like starting new businesses when there's jobs everywhere...

[MillCreek]

Speaking as someone who will likely be retiring in the next couple of years, I would be thrilled if I could get 4% in a FDIC-insured savings account.

[DittoHead]

Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon.

There might be a few "bumps in the road" coming.

[makattak]

Economists have predicted 12 of the past 5 recessions.

[BTR]

There might be a few "bumps in the road" coming.

That doesn't sound good.

[MillCreek]

35 minutes left to go, and the Dow is down 564 points so far.