What a Yield-Curve Inversion Really Says About the U.S. Economy

https://www.bloomberg.com/news/arti...curve-inversion-really-says-about-the-economy

As this articles suggests, liberal media is trying to scare everyone into a recession.
The US economy is going strong and the recession is not happening any time soon.

 

A nice feel good article.
I just picked this on because I remembered some numbers.

You don't have to export to have your profits offshore.

YEAR IN REVIEW


• In 2017, the percentage of S&P 500 sales from foreign countries increased slightly, after two years of measured decreases. The overall rate for 2017 was 43.6%, up from 43.2% in 2016, but down from 44.3% in 2015 and 47.8% in 2014, which was at least an 11-year record high. S&P 500 foreign sales represent products and services produced and sold outside of the U.S.

https://us.spindices.com/indexology/djia-and-sp-500/sp-500-global-sales

It's kind of like China, where we don't export much but we sell a bunch of stuff we manufacture there.

 

What’s the percentage of the GDP that comes from those sales?

 

Bloomberg is a well respected publication. The author does make very valid points.

 

Hard to say, but probably not trivial since many products still use US components.

 

The only point I saw him make over and over is don't believe the inverted yield curve.

 

Anyone who says they have the economy figured out is lying.

 

I disagree with Trump on this.

Milton Friedman once commented that the two most important numbers in any economy are the exchange rate and the interest rate, both of which Trump has taken a keen interest in.

Focusing on the latter, the Fed lowers interest rates by - through several mechanisms - putting more currency in circulation.

This is fine in the short term until the market realizes their currency ain't worth what it used to be.

One of the best actions by any President were those by Jimmy Carter and Ronald Reagan when they appointed and renominated Paul Volcker as head of the Fed. Monetary restraint is difficult and unpopular, but it allows people to save and invest.

Getting a 3% pa mortgage seems great until the house costs 3x the price, then those 10% rates seem pretty damn good.

Retirees figure this out when retirement comes knocking, but by then it's too late and pretty much everyone else is binging on the easy credit like they did back in their day.

 

no one is trying to scare anyone, the recession is coming, just a fact, I predict within next 5 years

 

Well, considering that intrareceasion period is usually 10 years, your 5 year prediction is a shot in the dark.
Statistically speaking, based on just historic trends, the recession should have started almost a year ago.
Is that Trump’s achievement?

 

Trump didn’t try to make any point in this article.

 

Well, looks like he is right.

 

Not yet.

 

Look it up. Each of the LAST SEVEN RECESSIONS were preceded by a yield curve.

 

https://www.reuters.com/article/us-...what-is-an-inverted-yield-curve-idUSKBN1O50GA

There was one in December of 2018.
Where is my recession?

 

Your 2 years isn't up yet.

 

We are talking about recessions, not the mis-understanding of yield curves. The economy still has little more than one year to go.

 

1.8 %?
What oh what happened to growth of 4, 5 or even 6 percent.
Did the magic wand break?

 

The media reporting on a well-known economic indicator is "trying to scare everyone into a recession"?

 

Advance estimate for 2nd quarter is 2.1%.
Next release is due on August 29, just a week from now.

Any positive growth is not a recession. With 2.1% we are quite far from it.

 

Quoted article goes in great detail explaining why it’s an outdated “indicator”. Did you read it?

 

The argument is outdated, the inversion indicator is real.

 

I did. It's one person's opinion. He may be right, but that doesn't mean the media reporting on it are "trying to scare everyone into a recession."

 

Care to provide a real argument?

 

Based on the last seven recessions, all preceded by the inversion curve, we are about eight months (Trump better hope not) to sixteen months out.

One person's opinion about 'inversion is outdated' while supported by a poster's opinion here is flaccid argument.