Author Topic: Yield Curve Inverting  (Read 5815 times)

meiroy

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Re: Yield Curve Inverting
« Reply #10 on: December 04, 2018, 05:57:30 PM »
I like grannis' work on this:  http://scottgrannis.blogspot.com/2018/11/the-yield-curve-is-not-forecasting.html

Yes, he's fantastic. He does have two strong biases, though: 1. he's 100% supply side, everything begins and ends with that.  2. he doesn't really get China's economy and its real impact on the U.S. economy. 


"In any event, it's possible, and likely, that good news on the global trade front could alter the bond market's expectations rather dramatically, resulting in a steeper yield curve and ultimately a stronger economy. "

China/USA issues are not going to be resolved any time soon.

Having said that, he does post clear data which is quite useful.

I'm betting that if there's a real panic starting the Fed will not raise until things calm down, if not next time then the one that follows.

« Last Edit: December 04, 2018, 06:33:31 PM by meiroy »


nickenumbers

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Re: Yield Curve Inverting
« Reply #11 on: December 05, 2018, 05:52:06 AM »
Great info and answers everyone.  Thank you.  I have started to read thru Scott Grannis's blog postings, etc.  Great info.

I am a banana eating monkey, and I am getting smarter by the day!
The fastest Cheetah still waits for the lame baby antelope.  ..patience..

Cigarbutt

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Re: Yield Curve Inverting
« Reply #12 on: December 05, 2018, 06:53:27 AM »
Great info and answers everyone.  Thank you.  I have started to read thru Scott Grannis's blog postings, etc.  Great info.

I am a banana eating monkey, and I am getting smarter by the day!
One has to wonder how much of available time should be spent on this (less than 5%?).

Some of the blog postings have more value.
Over time, the author has shown the ability to change opinions with changing facts which is good but also has evolved his narrative despite facts which is more concerning but don't we all do that?

Here are two samples to reflect upon:
http://scottgrannis.blogspot.com/2016/08/qe-and-amazing-demand-for-money.html
This post corresponds to the feed the pigs cartoon shown elsewhere when discussing QE.
People say it's more difficult to lose weight to offset the gain and there's the yo-yo effect.

http://scottgrannis.blogspot.com/2009/07/money-velocity-is-likely-stabilizing-4.html
This post deals with money velocity. The author has always believed that the most important factor consisted in finally adopting a risk-seeking attitude (?!) and unleashing animal spirits in order to stimulate fixed investment and increase real productivity so that the yield curve could steepen and we could all live happy forever after. Interestingly, the Fairfax team has somewhat equivocally espoused that thesis too.
Recently, the market has refused to cooperate and maybe it's time for a different tone (tune?).

Please continue yor banana learning and show old monkeys new tricks.

Cigarbutt

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Re: Yield Curve Inverting
« Reply #13 on: March 22, 2019, 05:57:40 AM »
Yields are getting horizontal and who knows what that means?
Bias: in another life a flatline meant efforts for resuscitation and it seems that the FED may be getting ready to do just that as they recently surveyed primary dealers on how to fine-tune the management of rates.

A lingering thought is that successful resuscitation is generally unlikely and is inversely related to the length of time spent attempting resuscitation. At least, that's what Wikipedia says.
« Last Edit: March 22, 2019, 06:03:24 AM by Cigarbutt »

Spekulatius

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Re: Yield Curve Inverting
« Reply #14 on: March 25, 2019, 06:39:26 PM »
Yields are getting horizontal and who knows what that means?
Bias: in another life a flatline meant efforts for resuscitation and it seems that the FED may be getting ready to do just that as they recently surveyed primary dealers on how to fine-tune the management of rates.

A lingering thought is that successful resuscitation is generally unlikely and is inversely related to the length of time spent attempting resuscitation. At least, that's what Wikipedia says.

I personally canít tell what is a symptom and what is the disease, but I tend to think of inverting interest rate as a symptom.

Just my opinion, but every time, investors put their hope into Fed, they tend to get disappointed. I suspect the market will take a real dump, if indeed the Fed starts to lower rates.
To be a realist, one has to believe in miracles.

Cigarbutt

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Re: Yield Curve Inverting
« Reply #15 on: March 25, 2019, 09:10:00 PM »

I personally canít tell what is a symptom and what is the disease, but I tend to think of inverting interest rate as a symptom.

Just my opinion, but every time, investors put their hope into Fed, they tend to get disappointed. I suspect the market will take a real dump, if indeed the Fed starts to lower rates.
If indeed the Fed starts to lower rates, it means we never really left the accommodative phase. Uncharted waters.

rb

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Re: Yield Curve Inverting
« Reply #16 on: March 25, 2019, 10:19:11 PM »
Wrong! It's been chartered before. See 1937. History helps.

Cigarbutt

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Re: Yield Curve Inverting
« Reply #17 on: March 26, 2019, 04:42:29 AM »
Wrong! It's been chartered before. See 1937. History helps.
The 1937 period is interesting, isn't it?
But "I don't know how we get out of this":
https://www.cnbc.com/2015/04/11/druckenmiller-this-could-end-very-badly.html

Charter: a document issued by some authority
Chart: some kind of map

If things get rough at this point, I'd rather have a map.

TwoCitiesCapital

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Re: Yield Curve Inverting
« Reply #18 on: March 26, 2019, 08:01:37 PM »
Yields are getting horizontal and who knows what that means?
Bias: in another life a flatline meant efforts for resuscitation and it seems that the FED may be getting ready to do just that as they recently surveyed primary dealers on how to fine-tune the management of rates.

A lingering thought is that successful resuscitation is generally unlikely and is inversely related to the length of time spent attempting resuscitation. At least, that's what Wikipedia says.

I personally canít tell what is a symptom and what is the disease, but I tend to think of inverting interest rate as a symptom.

Just my opinion, but every time, investors put their hope into Fed, they tend to get disappointed. I suspect the market will take a real dump, if indeed the Fed starts to lower rates.

I think it can be be both right? At first it's a symptom - it's markets being concerned about future growth/inflation and predicting a rate cut; however, it can also become self-fulfilling and contribute to the slowdown because the inversion strangles credit supply further slowing the economy

meiroy

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Re: Yield Curve Inverting
« Reply #19 on: March 27, 2019, 03:23:49 AM »
Yields are getting horizontal and who knows what that means?
Bias: in another life a flatline meant efforts for resuscitation and it seems that the FED may be getting ready to do just that as they recently surveyed primary dealers on how to fine-tune the management of rates.

A lingering thought is that successful resuscitation is generally unlikely and is inversely related to the length of time spent attempting resuscitation. At least, that's what Wikipedia says.

I personally canít tell what is a symptom and what is the disease, but I tend to think of inverting interest rate as a symptom.

Just my opinion, but every time, investors put their hope into Fed, they tend to get disappointed. I suspect the market will take a real dump, if indeed the Fed starts to lower rates.

I think it can be be both right? At first it's a symptom - it's markets being concerned about future growth/inflation and predicting a rate cut; however, it can also become self-fulfilling and contribute to the slowdown because the inversion strangles credit supply further slowing the economy

Reflexivity.   In this case, there are definitely fundamental issues regardless of expectations. Rising rates would have a serious impact, no matter how they do it, the only question is how bad.  The method the Fed uses makes things worse, because, well, they are clueless as the past few months have shown.

The big unknown here is not the Fed, it's Trump.  He called an emergency on the wall. He just nominated someone to the Fed that no doubt he believes will support his views. What else is he willing to do for us to get a happy dead cat bounce?  That's my bet, it's not going straight down from here.  We will have fun first.