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Wed Aug 14, 2019, 08:15 PM

The Next Recession Is Going to Be Brutal

Market-watchers enjoying their first sip of coffee around 6 a.m. might have done a spit-take. For a brief period Wednesday morning, yields on two-year Treasury bonds were higher than those on ten-year ones — a short-term investment was seen as riskier than a long term one, and the return therefore higher — a signal that can portend major trouble for the economy. The last time the yields “inverted” was in 2007, before the “great” recession; the two times before that also directly preceded recessions. The dynamic flipped back before markets opened Wednesday, but stocks nevertheless dropped amid new fears of serious economic trouble ahead.

According to research from Credit Suisse (via the Washington Post) recessions historically have followed 18 to 24 months after the yield curve inversions like the one Wednesday morning.

Before we get too carried away, it’s worth mentioning that there are some who argue the yield curve invert isn’t as reliable a recession indicator as it’s generally made out to be. Former Federal Reserve chair Janet Yellen struck a note of caution during a Wednesday morning appearance on Fox Business. “Historically, it has been a pretty good signal of recession, and it think that’s when markets pay attention to it, but I would really urge that on this occasion it may be a less good signal,” Yellen said. “The reason for that is there are a number of factors other than market expectations about the future path of interest rates that are pushing down long-term yields.”

But sooner or later, the current economic expansion — by many measures the longest in U.S. history — is going to end. And that’s particularly troubling when you consider how many Americans continue to fare poorly even in the current “strong economy.”

https://www.rollingstone.com/politics/politics-news/recession-yield-curve-poverty-tax-cuts-trump-871198/

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Response to Yo_Mama_Been_Loggin (Original post)

Wed Aug 14, 2019, 08:20 PM

1. if Dems win and a recession ramps up during their term, they will be blamed

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Response to Demovictory9 (Reply #1)

Wed Aug 14, 2019, 08:29 PM

2. Hell we got blamed for the last one

before Obama even got in office.

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Response to doc03 (Reply #2)

Wed Aug 14, 2019, 08:48 PM

3. Limpballs especially tried. Not too credible blaming Obama immediately after election,

for a dive that was over a year in the making.

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Response to Yo_Mama_Been_Loggin (Original post)

Wed Aug 14, 2019, 09:21 PM

4. While I want trump as weak as possible next election, a weak economy is going to make healthcare,

childcare, college debt forgiveness, bolstering social security, etc., tougher to enact and maybe less of a campaign advantage.

But, not much anyone -- other than trump's so-called admin -- can do about it now.

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