Saturday , August 24 2019
Home / Tag Archives: Recession

Tag Archives: Recession

Investors Dilemma: Pavlov’s Dogs & The Ringing Of The Bell

Classical conditioning (also known as Pavlovian or respondent conditioning) refers to a learning procedure in which a potent stimulus (e.g. food) is paired with a previously neutral stimulus (e.g. a bell). What Pavlov discovered is that when the neutral stimulus was introduced, the dogs would begin to salivate in anticipation of the potent stimulus, even though it was not currently present. This learning process results from the psychological “pairing” of the stimuli. What does this have to...

Read More »

Making Sense Of 100-Year Bonds At 0% & 30-Year Bonds At Negative Yields

Over 50% of European gov’t bonds have a negative yield. Globally there’s $15 trillion in negative-yield debt. $15 Trillion in Negative-Yield Debt Excluding the US 44% of Bonds Have a Negative Yield European Negative Yield Government Bonds As of mid-June, over 50% of European government bonds have a negative yield. The total is higher now. Negative-Yield 30-Year Bond Yesterday, Germany issued a 30-year bond yielding less than 0%. Held to maturity you will not even get your...

Read More »

Monthly Macro Monitor: Does Anyone Not Know About The Yield Curve?

The yield curve’s inverted! The yield curve’s inverted! That was the news I awoke to last Wednesday on CNBC as the 10 year Treasury note yield dipped below the 2 year yield for the first time since 2007. That’s the sign everyone has been waiting for, the definitive recession signal that says get out while the getting is good. And that’s exactly what investors did all day long, the Dow ultimately surrendering 800 points on the day. I don’t remember anyone on CNBC...

Read More »

Germany’s Superstimulus; Or, The Familiar (Dollar) Disorder of Bumbling Failure

The Economics textbook says that when faced with a downturn, the central bank turns to easing and the central government starts borrowing and spending. This combined “stimulus” approach will fill in the troughs without shaving off the peaks; at least according to neo-Keynesian doctrine. The point is to raise what these Economists call aggregate demand. If everyday folks don’t want to spend – because a lot of them can’t – then the government will spend on their behalf. And the central bank...

Read More »

The Dog Whistle Heard Around The World

On August 15, 2019 the Washington Post led with a story entitled Markets sink on recession signal. The recession signal the Post refers to is the U.S. Treasury yield curve which had just inverted for the first time in over ten years. We have been highlighting the flattening yield curve for the past six months. As we have discussed, every time the ten-year Treasury yield has fallen below the two-year Treasury yield, thus inverting the yield curve, a recession has eventually developed....

Read More »

No Recession In Sight? But Cutting Rates To Avoid One

President Trump and his economic advisor Larry Kudlow have important announcements. I can help with translations. Please consider Trump ‘Not Ready’ for China Trade Deal, Dismisses Recession Fears. Consumers Doing Well Trump: “We’re doing tremendously well, our consumers are rich, I gave a tremendous tax cut, and they’re loaded up with money.”Trump Translated: The “tremendous tax” cut primarily benefited the wealthy. Consumers are tapped out. That’s why housing and autos are on the...

Read More »

5-Things Your Broker Wont Tell You – Part 2

Valuations Matter. As I mentioned briefly in Part 1 of the series,  investors about to the enter the retirement distribution phase of their lives or seeking to extract money from a basket of variable assets like stocks and bonds to re-create a retirement paycheck, must be keenly aware of portfolio risk and prepare for a cycle of muted portfolio returns. Newbies to the retirement experience and those who aspire to retire within the next 3-5 years must seriously consider comprehensive financial...

Read More »

US Industrial Downturn: What If Oil and Inventory Join It?

Revised estimates from the Federal Reserve are beginning to suggest another area for concern in the US economy. There hadn’t really been all that much supply side capex activity taking place to begin with. Despite the idea of an economic boom in 2017, businesses across the whole economy just hadn’t been building like there was one nor in anticipation of one. The only place where there was a truly robust trend was the oil patch. Since the last crash a few years ago, Euro$ #3, the oil sector...

Read More »

Europe’s Further Confirmation(s)

The key takeaway from Europe’s economic data dump today isn’t that the whole Continental economy is poised on the verge of recession, though that’s thrust of what’s being written about most. The reason is simple; this is all highly unexpected in the mainstream. Going by official accounts alone, there was never a hint of trouble before just recently. And many still believe this is all just overreacting. Mario Draghi like Jay Powell made his final hawkish move in December 2018. He actually made...

Read More »

5-Things Your Broker Will Ignore – Part 1

Investors mistakenly believe their financial partners are students of holistic financial planning. Outside of sell-side biased market information pumped out daily by an employer’s research department, there are several areas of study that many brokers would prefer to avoid. Worse are the practitioners who confidently communicate erroneous Medicare and Social Security advice which results in consumers leaving thousands of lifetime income dollars on the table. Then, there are the brokers who...

Read More »