re: Inverted yield curves predicting a recession

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Where's the massive stimulus coming from?

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decreased taxes.

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Thanks tex, now it's all clear

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Thanks tex, now it's all clea

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What are you confused about? The stimulus came in the form of increased deficit spending and decreased taxes amidst an historic deficit. This is the very definition of stimulus. Obama tried to do the same thing.

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The average family has less than $1000 saved for emergencies

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"The average American household has $180,040 worth of savings in bank accounts and retirement savings accounts as of March 2019."

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There is room for both of these to not be wrong, IMO.

The retirement savings vs emergency savings leaves a lot of grey area.

Also, can you opine on my question on the last page? (eta: because I trust your expertise on it)

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The US decided to do quantitative tightening and pull 100s of billions of dollars off the market, and is still doing so.



Does this mean we are reducing our debt?

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No, we are not reducing the amount of U.S. debt.

You're conflating the amount of debt issued by the U.S. government (via the Treasury Department) with the amount of securities the Federal Reserve holds in its portfolio.

The Fed can sell debt issues that it owns thereby reducing its balance sheet, i.e., "quantitative tightening" but the amount of total debt issued by the Treasury Department remains unchanged by that action.

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"The average American household has $180,040 worth of savings in bank accounts and retirement savings accounts as of March 2019."

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Right. Which is why you should have steered him to look at the median:

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The median American household currently holds about $12,120 across these same types of accounts.

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It's not $1000, but that is still pretty bad. Also, tapping a retirement account for an emergency is sometimes an option, but you likely know the thrust of the metric is that the median American household has very little cash on hand.

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Home ownership is about where it was before the housing bubble of 2008/2009 burst

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The housing bubble burst starting in 2005. The later markets reached their peak in mid-2007. Either way, it was well before 2008/09. In any event, his point is likely off because that was a falsely high level of demand. In my view, we are well within historical range...and I'm not at all convinced that home ownership is a worthy goal for more than 2/3 of the country anyway.

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However, I'm all for stimulus via tax cuts.

Even in the midst of historic deficits AND set to the tune of more spending?

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Yes!!!! Now ask me if I'm for cutting the bloated Federal government by 50%, go ahead, ask me. Ahh, don't ask me, I'm for cutting the federal government as much as possible.

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quote: Yes!!!! Now ask me if I'm for cutting the bloated Federal government by 50%, go ahead, ask me. Ahh, don't ask me, I'm for cutting the federal government as much as possible.


Sure, me too. But you probably shouldn't have one without the other. Also, I doubt you're willing to cut military spending by 50%.

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We're still a quasi free society so remember this, for anyone who's unhappy with the Trump tax cuts it's really quite simple, remit your tax savings back to the federal government. This usually shuts most Prog/Dim leftists down cold. I'm not saying you're a leftist, not sure of your core politics.

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Disagree. There is way more to it than that. It is the overall debt picture of the average consumer that is scaring people.

If you look at all the factors, then things get a little concerning.

All-time high on CC debt
All-time high student loans
The average family has less than $1000 saved for emergencies
The lowest rate of homeownership in 25 years
96-month car loans
Stagnant wage growth
Home value growth far outpacing wage growth
Etc

How anyone can think the current state is sustainable for very long is ludicrous to me.

There is a lot more to it than "Chicken Little-ing"

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A lot of this is deceptive or simply false.

Many of your stats are skewed by people that don't hardly contribute to the economy as a whole (GDP), so acting like skewed stats are rationale for a recession is disingenuous and dishonest.

1. A huge amount of CC debt is healthcare-related liabilities (thanks Obamacare). And because of this, a significant amount of CC debt belongs to just a small percentage (~11%) of the general consumer public.

There's about $1 Trillion in CC debt. And nearly $600 Billion (~60% of all CC debt) of this is owned by around 20 million people. There's ~185 million people who own CC's in the US. CC debtors paid about $122 Billion in interest last year.

This means ~20 million people paid ~$73 Billion in interest ($3,650 each) while ~165 million paid ~$49 Billion in interest ($297 each).

$49 Billion is less than 1/4th of 1% of our $20.5 Trillion economy.

In other words, the VAST majority of people who contribute to the economy have very little CC debt, and this debt is meaningless in the big picture.


2. Student loans? You mean 80%+ Liberals with their identity studies degrees are having a tough time getting jobs and don't have consumer confidence? WHODATHUNKIT! Again, a very small percentage of those who contribute to GDP.


3. What does "saved for emergencies" mean? Savings is savings if it's accessible/liquid. The average middle class family has well above $1,000 saved. This is the dumbest statistic the Left has tried to push.

Responsible nuclear middle class families, you know, the ones who actually contribute to GDP, have over $180,000 in savings on average. And when you get to the biggest contributors to GDP, they average over $500,000 in savings.


4. Home ownership is up from 62.9 to 64.1 since the day Trump took office. LINK

It was on a stark downward trend the entire way from 2009-2016.

What's causing it to be volatile right now is that builders are going crazy building new homes, AND, there has been a huge influx of real estate investing where average consumers are buying homes and then renting them. These types of investors are up over 250% in the last 3 years.


5. The average car loan right now is 68 months at 4.21%. There's about $650 Billion in car loan debt to about 115 million car buyers.

Only about 4.1% of them are 90 days or more past due on paying their loans.

This is again a non-issue.


6. "Stagnant wage growth"?? FALSE

Wage Growth Stats

Wage growth was on a fast downward trajectory in 2016, but shot back up as soon as Trump was elected. We had a slight dip in last half of 2018, but it has shot back up near historical norms the first half of 2019.


7. "Home value growth far outpacing wage growth"? WTF does this even mean?

When did real estate value ever correlate to wage growth?

The HPI (Home Price Index) has been gradually decreasing since the beginning of 2018. It was relatively level between 5%-6.5% between 2014-2018, and is now around 3.5%.

LINK

Needless to say, I don't even know how this is relevant to anything, but even if it were, home value growth has been slowing while wage growth has been rising.



Look, the reason for the inverted yield curve is because of Quantitative Tightening and millions of idiot layman investors listening to news media telling them to buy longterm bonds to protect themselves from "Trump's disastrous economy".

The problem is, it's not disastrous and all the media is doing is fear-mongering and lying to people for political agenda.

Here's the truth... Reality eventually beats Sentiment.

The Lefty MSM is trying their best to sway people's sentiment with lies and fear, but it's going to come back to bite them when we're 5 more years down the road and no recession has happened, and there's millions of dumbfricks sitting there wondering why they're only earning 2.5% on their 20 year bonds and missed 9% annual ROR in the market.

And what's even funnier is that they'll still be sitting there listening to the MSM tell them it's Trump's fault because they're too fricked in the head with TDS to realize who deceived them.

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For someone who claims to be educated you sure do have a difficult time reading simple English sentences.

I said the housing bubble burst in 2008/2009, NOT that the housing bubble began in those years. The link I posted following my "bubble" comment even contains a graph showing the bubble expansion beginning in the mid-1990's.

This is just another example of you craving a "gotcha" moment.

In fact, all three of your comments to me in my reply to stout is your attempt at a gotcha.

Just how insecure are you???

frick off.....

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Not even the pot calling the kettle black. You're actually calling the pot POT.

frick off yourself you smug douche.

Know how I know I'm right and it struck a nerve?

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frick off yourself you smug douche.

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