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Started By
Message
2 year inverted yield curve
Posted on 4/22/24 at 8:19 am
Posted on 4/22/24 at 8:19 am
Usually recession follows the inversion. The Following recession usually comes within months.
We’re 2 years in now and no recession.
I’ve never seen anything like this.
How long can this go?
We’re 2 years in now and no recession.
I’ve never seen anything like this.
How long can this go?
This post was edited on 4/22/24 at 2:25 pm
Posted on 4/22/24 at 8:20 am to SlidellCajun
It has felt like a recession for 2 years
Posted on 4/22/24 at 8:31 am to SlidellCajun
The recession usually comes within 6-12 months after the inversion ends, we're still inverted. LINK
Prior to the current period, the longest lasting inversion was from September 1978 through April 1980 (20 months). The current inversion started at the beginning of July 2022 and is still going (meaning we're over 22 months and counting).
There's no known correlation between inversion depth/length and the intensity/length of the following recession.
Prior to the current period, the longest lasting inversion was from September 1978 through April 1980 (20 months). The current inversion started at the beginning of July 2022 and is still going (meaning we're over 22 months and counting).
There's no known correlation between inversion depth/length and the intensity/length of the following recession.
This post was edited on 4/22/24 at 8:32 am
Posted on 4/22/24 at 8:43 am to Bard
I've seen several charts lately floating around on twitter that point out the only 3 recessions where the yield curve was inverted this long were 1929, the aforementioned 1974, and then 2007. All were 50+% drops in the markets.
Game of Trades
Let's hope the correlation doesn't stick.
Game of Trades
Let's hope the correlation doesn't stick.
Posted on 4/22/24 at 8:48 am to SlidellCajun
A short line item thesis is usually to simplistic to explain economics, but I am not an economist. I’m not sure if there is anything novel here to take away, just my own thoughts.
Most of the yield curve inversions were in periods of a secular decline in yields. Coming off of ZIRP, inversion was easy to get to.
Zero rates which put in motion a potentially secular higher rate environment might make a LOT of 2000-2020 indicators obsolete. At minimum, less reliable.
Just like value metrics have been unreliable as we progressed into ZIRP.
Most of the yield curve inversions were in periods of a secular decline in yields. Coming off of ZIRP, inversion was easy to get to.
Zero rates which put in motion a potentially secular higher rate environment might make a LOT of 2000-2020 indicators obsolete. At minimum, less reliable.
Just like value metrics have been unreliable as we progressed into ZIRP.
Posted on 4/22/24 at 9:08 am to SlidellCajun
quote:
I’ve never seen anything like this.
No other president in history has been able to get away with this many executive orders that have completely bypassed Congress and SCOTUS to mask what's really happening. In 2022 Biden methodically raided the SPR on a monthly basis to artificially keep gas at the pump low. He's never attempted to refill that massive non-wartime selloff. In 2022 and now in 2024 he's making rules to forgive billions in student loans circumventing SCOTUS' ruling. But for every action there's an equal and opposite reaction...God help us all when those chickens come home to roost. Could be Carter 2.0.
This post was edited on 4/22/24 at 9:12 am
Posted on 4/22/24 at 9:44 am to Tomatocantender
I'm racking my brains over this. I'm 39. Tempted to put all future 403b/401k contributions for my wife and I into money market/cash starting this week with the anticipation of a hard recession similar to 2007-2009. I would not touch all current investments. Reassess 14-18 months out? Wise or foolish?
Posted on 4/22/24 at 9:54 am to Crescent Connection
quote:
Tempted to put all future 403b/401k contributions for my wife and I into money market/cash starting this week with the anticipation of a hard recession similar to 2007-2009. I would not touch all current investments. Reassess 14-18 months out? Wise or foolish?
Good luck timing it.
Assuming basically the majority of your 401K type investments are just broad index funds and your current age, I see no reason not to just continue like normal. Will be a blip on the radar at the end of the road.
Posted on 4/22/24 at 9:56 am to SlidellCajun
Started to become worried it's all going to come crashing down out of nowhere.
Posted on 4/22/24 at 10:33 am to Crescent Connection
quote:
I'm racking my brains over this. I'm 39. Tempted to put all future 403b/401k contributions for my wife and I into money market/cash starting this week with the anticipation of a hard recession similar to 2007-2009. I would not touch all current investments. Reassess 14-18 months out? Wise or foolish?
For my 401k, this is The Year of the Money Markets. All of my new allocations have been going into VFVXX or SPRXX. That said, I'm still holding my dividend stocks (since almost all of them reinvest).
I'm risk-averse so while some here were making good bank on the bulls earlier in the year, I was getting ready for what I believe is coming. That said, I'm not entirely convinced we're into the early stages of the shite yet (waiting to see Unemployment moving upward above 4% with momentum).
Posted on 4/22/24 at 11:04 am to SlidellCajun
We already had a technical recession
Posted on 4/22/24 at 11:11 am to Bard
To say nothing about the difficulty of market timing, idk why people would make their contributions more conservative if they’re nervous. You contributions are DCA by their very nature, so volatility is great for them. If you’re trying to lower your risk, lower your exposure into your existing investments.
To do it the other way around is the worst of both worlds.
To do it the other way around is the worst of both worlds.
Posted on 4/22/24 at 11:24 am to slackster
quote:
To say nothing about the difficulty of market timing
Do you even #FOMO, bro?

Posted on 4/22/24 at 12:13 pm to StonewallJack
quote:It has? Please share some details.
It has felt like a recession for 2 years
Posted on 4/22/24 at 12:14 pm to Tomatocantender
quote:Those are your two best pieces of evidence for why no recession? Keep trying.
No other president in history has been able to get away with this many executive orders that have completely bypassed Congress and SCOTUS to mask what's really happening. In 2022 Biden methodically raided the SPR on a monthly basis to artificially keep gas at the pump low. He's never attempted to refill that massive non-wartime selloff. In 2022 and now in 2024 he's making rules to forgive billions in student loans circumventing SCOTUS' ruling. But for every action there's an equal and opposite reaction...God help us all when those chickens come home to roost. Could be Carter 2.0.
Posted on 4/22/24 at 12:15 pm to Crescent Connection
quote:Extremely foolish. I could see maybe making the portfolio less aggressive, but trying outright to time?
I'm racking my brains over this. I'm 39. Tempted to put all future 403b/401k contributions for my wife and I into money market/cash starting this week with the anticipation of a hard recession similar to 2007-2009. I would not touch all current investments. Reassess 14-18 months out? Wise or foolish?
Posted on 4/22/24 at 12:16 pm to Bard
quote:Why not USFR? It's as much as 75bps higher, depending on the week.
All of my new allocations have been going into VFVXX or SPRXX.
Posted on 4/22/24 at 12:21 pm to Crescent Connection
quote:
I'm racking my brains over this. I'm 39. Tempted to put all future 403b/401k contributions for my wife and I into money market/cash starting this week with the anticipation of a hard recession similar to 2007-2009. I would not touch all current investments. Reassess 14-18 months out? Wise or foolish?
Same thing was said by Many on this Board back in 2022. How did that strategy work out? Not saying it wont happen because it could but agree with the other posters trying to time this market is a losing battle.
Posted on 4/22/24 at 12:35 pm to Crescent Connection
quote:
I'm racking my brains over this. I'm 39. Tempted to put all future 403b/401k contributions for my wife and I into money market/cash starting this week with the anticipation of a hard recession similar to 2007-2009. I would not touch all current investments. Reassess 14-18 months out? Wise or foolish?
I was 27 when 2008 hit. My 401 cut 50 percent in a few months. I always said that I should have seen it coming. But that’s always easy after you know the result. In reality virtually nobody times it right.
However, as 2008-2012 played out I upped my percentage to the highest I could afford and I bought discounted funds for years.
Also I put 5 percent in a govt bond fund that I used to jump into the market for buying on abnormally large stock falls. I’ve used it once and put a pretty large amount in the market in mid April of the Covid year. I invested in Tesla, Exxon, delta, and carnival. After a year and a piece I sold and put it back in the govt bond fund. I’m ready to pounce again while gaining a small amount of interest with the money that’s in that side fund.
Posted on 4/22/24 at 12:40 pm to Big Scrub TX
quote:
Why not USFR? It's as much as 75bps higher, depending on the week.
:CubanWritingShitDown.gif:
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