'The Sky is Falling' Narrative

[Elliott]

If you listen to national or even local media (reading from national news sources) you have been warned there's a recession a'comin (just in case you no longer worry about Russians or Racism).
The pretty news readers go to great length to explain the "Inverted Yield Curve" and how its a predictor of plague, famine, and pestilence, so you better be thinking about your vote. Bill Mahr is hoping one will come soon.

I find it pretty laughable, since inflation is low, interest rates are low, unemployment is low, and wages are rising.

But anyway, here is the scariest graph you'll ever see according to the media:

 

[Randolph Kinney]

What is a normal debt market?

About $15 trillion of government bonds worldwide, or 25% of the market, now trade at negative yields, according to Deutsche Bank. This number has nearly tripled since October 2018.

The whole German yield curve is now negative – and it will launch a long 30-year bond with a 0% coupon this week, which went negative after launch. The US is mulling a 100-year century bond.

The amount of global debt with negative yields continues to grow and as central banks scramble to react to a slowing economy they are seemingly making the yield decline worse.

 

[Pittsburgh Pete]

Apparently quite a few ignorant CEOs and economists have bought into this blatant conspiracy!

A Majority of Economists Think the Next Recession Will Come by the 2020 Election

Trade wars, protectionism, and housing prices could take a heavy toll.

fortune.com

What CEOs, Bankers, and Tech Execs Think About a Coming Recession

"I think that ’08 was the hors d’oeuvres course."

fortune.com

 

[Randolph Kinney]

So why are investors willing buy negative yielding debt?

https://www.bloomberg.com/news/articles/2019-08-15/three-ways-to-profit-from-16-trillion-of-negative-yielding-debt

 

[ucbruin]

"I find it pretty laughable, since inflation is low, interest rates are low, unemployment is low, and wages are rising."

According to many AF members so are appraisal fees....

 

[Andrei Fin]

Trump can hold off the recession by at least six months with one little tweet: "Trade war canceled!" And just in time for the 2020 election...

 

[RCA]

I am for Trump's policies - with respect to trade, however beware, despite appearances, there are trends that are downright disturbing:

1. Trump in fact hasn't made a dent in the trade balance. It is worse now than when he took office. --- To a large extent it could simply be companies and people stocking up on Chinese goods before the price goes up. ....

2. The dollar keeps getting stronger, making American exports overseas more expensive.

3. Protectionism against American goods in Europe and China has increased dramatically. For example, if I now send birthday or Christmas gifts to my grandchildren in France, the French customs opens the packages, prices everything out and charges the highest possible tariff. They didn't used to do that.

4. Scientists just discovered why Greenland glaciers are melting so fast, - because the ocean water underneath is getting so warm. If they all melt, that raises seal levels up to 22 feet. As soon as it goes up just another foot or so - you can be sure the brakes will be put on coal and gas - and that's not going to be pretty.

To support Trump's policies, the American voter is going to have to start thinking long-term. I would guess the Chinese are not going to budge much until maybe after the next election - if Trump gets reelected.

To avoid a recession, we may have to borrow more. And some magazine, 20 years back, I think MAD, predicted Trump would become president for 8 years and leave the US with a whopping debt figure. May happen, but I doubt it.

But it's really all up in the air.

 

[ucbruin]

The silver lining with another 4 years....
The red hats will be more negatively impacted by his policies than will the non red hats....

 

[RCA]

The silver lining with another 4 years....
The red hats will be more negatively impacted by his policies than will the non red hats....

That's actually not the case. A lot of people who now have work, KNOW they wouldn't have without Trump. And, just as - if not more importantly, that is what they believe ... and I'd have to be in agreement.

 

[Elliott]

I really, really have a hard time thinking a recession is a function of 90-day T-bills yielding 1/2% more than a 5-Year Note. I have a feeling the interest rate traders will figure it out before it drives the economy into recessions because of what, a lack of liquidity from the Fed?