2 recession indicators with perfect track records show the US just entered a downturn — opening the door for stocks to plummet as the Fed gets set to

[NorthernHawkeye]

2 recession indicators with perfect track records show the US just entered a downturn — opening the door for stocks to plummet as the Fed gets set to cut rates

Is the US economy now in recession? These 2 indicators say so.

www.businessinsider.com

 

[artradley]

Time to celebrate, right?

 

[Jerome Silberman]

Paywall

 

[St. Louis Hawk]

Good grief.

OP, who was complaining about democrats changing the definition of recession just *yesterday,* posts an article that changes the definition of recession to get his favored result?

Because, of course.

 

[joelbc1]

One can’t be surprised, can they? Hopefully it will be of short duration and not too many folks will be wiped out.
Realistically, no “inflation” can ever end without a sharp economic downturn. Congress needs to figure it out and act in a responsible matter financially. The super low interest rates of the past are not the answer. Tax cuts are not the answer. Less spending is provably in the equation, though. Spending cuts, letting the Trump tax cuts go away and letting the market determine interest rates (not politics) are probably the best solution for long(er) term economic stability. Will Congress and politicians have the belly do allow this to happen?

 

[DFSNOLE]

Are these the same indicators that were present in early 2020 pre-Covid?

 

[Phenomenally Frantastic]

The Fed needs a crash to justify 2% rates to refinance open debt.

They don’t care about stock market crashes, that is not in their charter. 2% inflation and low unemployment is their prerogative.

 

[Scruddy]

The Fed needs a crash to justify 2% rates to refinance open debt.

They don’t care about stock market crashes, that is not in their charter. 2% inflation and low unemployment is their prerogative.

Unemployment went up yesterday though, didn't it? Part of the plan, or just a temporary road bump?

 

[NorthernHawkeye]

Good grief.

OP, who was complaining about democrats changing the definition of recession just *yesterday,* posts an article that changes the definition of recession to get his favored result?

Because, of course.

My "favored result"?

I favor America.

A recession in the fourth year of an administration is a sign that it's time to move on and try a different approach.

 

[hawkjt]

Fed needs a 50 point cut ASAP.
Waited too long to raise rates, now waiting too long to cut?

 

[joelbc1]

My "favored result"?

I favor America.

A recession in the fourth year of an administration is a sign that it's time to move on and try a different approach.

Even thought that Administration took over a rather weak and putrid economy?

 

[95Hawk]

My "favored result"?

I favor America.

A recession in the fourth year of an administration is a sign that it's time to move on and try a different approach.

“Move on” means going back to the stupid MFer who exacerbated inflation and accelerated jobless claims in the last year of his term?

 

[St. Louis Hawk]

My "favored result"?

I favor America.

A recession in the fourth year of an administration is a sign that it's time to move on and try a different approach.

Lol

Just fantastic.

 

[St. Louis Hawk]

Fed needs a 50 point cut ASAP.
Waited too long to raise rates, now waiting too long to cut?

Yep.

 

[Phenomenally Frantastic]

Anyone familiar with the Japan reverse carry trade and its implications on US equities? $20T to unwind?

Can the Fed or Treasury ward this off somehow?

Carry Trade: Definition, How It Works, Example, and Risks

A carry trade is a trading strategy that involves borrowing at a low interest rate and investing in an asset that provides a higher rate of return.

www.investopedia.com

@Randy Marsh
@hawkeyez
@bunsen82

 

[binsfeldcyhawk2]

Unemployment went up yesterday though, didn't it? Part of the plan, or just a temporary road bump?

In order to slow the economy and reduce inflation unemployment inevitably goes up.

 

[lucas80]

My "favored result"?

I favor America.

A recession in the fourth year of an administration is a sign that it's time to move on and try a different approach.

A different approach like economy killing tariffs announced via tweet at 4 am?

 

[Phenomenally Frantastic]

Points made:
1. No Bank in the world has allowed more borrowing/leverage than Bank of Japan.

2. Japan has been dealing with disinflation/deflation for decades.

3. Japan’s 1 year government bond interest rate has been <1% for over 20 years. (ie. very cheap capital) currently sitting at 0.259%.

https://www.marketwatch.com/investing/bond/tmbmkjp-01y?countrycode=jp

What’s the catch and why is it unwinding?

 

[Menace Sockeyes]

OP is trying too hard. He will find ANY excuse to support Trump. Even two random indicators. And no matter how shit Trump was on the economy (and he was shit even before Covid) OP would be like, “well, like, government cheese consumption is down, which is a key indicator of an economic recovery. We can’t change course.”

 

[Sharky1203]

“Move on” means going back to the stupid MFer who exacerbated inflation and accelerated jobless claims in the last year of his term?

Not a fan of his BTW, but I believe the COVID lockdowns had a huge factor in those numbers. Just like Biden's jobs increase after it was over was a false indicator in numbers.

 

[95Hawk]

Not a fan of his BTW, but I believe the COVID lockdowns had a huge factor in those numbers. Just like Biden's jobs increase after it was over was a false indicator in numbers.

Won’t disagree too much with that. The overall response to Covid from the Trump administration was disjointed and chaotic. Any president was going to have poor economic metrics follow their response. But Trump was piss-poor at managing the chaos and uncertainty.

 

[Sharky1203]

Won’t disagree too much with that. The overall response to Covid from the Trump administration was disjointed and chaotic. Any president was going to have poor economic metrics follow their response. But Trump was piss-poor at managing the chaos and uncertainty.

100%. But remember who was the expert and in-charge of the response. The same guy who screwed up AIDS in the 80's and 90's. Same guy that told us one mask wasn't enough and we should wear 3.

 

[Phenomenally Frantastic]

JPY: Peeling back the carry trade onion

The carry trade has many layers. A deeper unwind risks USD/JPY trading to 140

think.ing.com

BOJ Set to Cut Bond Buying as Fate of Rate Policy Stirs Jitters

Bank of Japan Governor Kazuo Ueda will have investors on high alert Wednesday when he lays out a detailed plan for quantitative tightening after years of massive easing. He may also double down by adding an interest rate hike to boot.

www.bloomberg.com

https://www.cnbc.com/2024/07/31/boj-raises-benchmark-interest-rate-outlines-roadmap-for-trimming-bond-buying-program.html

 

[TheCainer]

2 recession indicators with perfect track records show the US just entered a downturn — opening the door for stocks to plummet as the Fed gets set to cut rates

Is the US economy now in recession? These 2 indicators say so.

www.businessinsider.com

 

[binsfeldcyhawk2]

A different approach like economy killing tariffs announced via tweet at 4 am?

Not at 0400 but…😁

 

[Hoosierhawkeye]

You guys have been predicting a recession since we got out of the last recession.

 

[luvmyhawks]

View embedded media

View embedded media

Not at 0400 but…😁

That’s different.

 

[Phenomenally Frantastic]

Currency Carry Trade: Definition as Trading Strategy and Example

A currency carry trade is a strategy that involves using a high-yielding currency to fund a transaction with a low-yielding currency.

www.investopedia.com

Say you are a European banker that wants to borrow the equivalent of 10B Euro from a Japanese Bank offering loans at 0.1%.

You go to the BOJ and borrow 10B Euro equivalent of Yen. You now owe the borrowed amount back plus 0.1% back in 1 year.

The Euro banker takes the borrowed Yen, exchanges them for dollars, and invests those dollars into assets, ie. equities, higher yielding bonds (2.5%-3.5%), and real estate.

Or simply invests them in US T-Bills that were paying 4.5%.

That’s the carry trade.

Now consider leverage and the Yen/USD exchange rate. If the rate moves against the banker, the value of the trade falls. If the rate moves in their favor, the banker pays back the loan in cheaper Yen.

Then consider BOJ increased its interest rate on Wednesday.

“Japan’s central bank has raised its benchmark interest rate to “around 0.25%” from its previous range of 0% to 0.1% and outlined its plan to taper its bond buying program.

This would mark the Bank of Japan’s highest interest rates since 2008.”

 

[Phenomenally Frantastic]

How big is the Japan Carry Trade?

$20,000,000,000,000

“Japan's government is engaged in a massive $20 trillion "carry trade" - the funding of loans and foreign assets by borrowing low-cost yen - that could bring unexpected risks if the central bank tightens policy, Deutsche Bank analysts warn.
Using research by the San Francisco Federal Reserve and International Monetary Fund, Deutsche's head of currency research George Saravelos analysed a consolidated balance sheet of the Japanese government including the government-run pension fund GPIF, the Bank of Japan (BOJ), and state-owned banks, showing the asset-liability mix of its $20 trillion debt.”

https://www.business-standard.com/amp/economy/news/japan-s-20-trn-carry-trade-poses-risks-amid-central-bank-s-policy-shift-123111400696_1.html

 

[Phenomenally Frantastic]

Where does HROT think $20T in leverage provided by the BOJ went?

What practically happens when the trade unwinds?

Sell equities, exchange the USD for Yen, then pay back loan.

This massive leverage is interest rate and exchange rate sensitive.

 

[binsfeldcyhawk2]

​

​

Stocks crash on recession fears as the ‘Fed is seizing defeat from the jaws of victory’​

Stocks crash on recession fears as the 'Fed is seizing defeat from the jaws of victory'

The S&P 500 was sinking by 2.5% in midday trading, potentially on pace for its worst day since 2022, and on track for its first back-to-back loss of more than 1% since April.

fortune.com

 

[noleclone2]

​

​

Stocks crash on recession fears as the ‘Fed is seizing defeat from the jaws of victory’​

Stocks crash on recession fears as the 'Fed is seizing defeat from the jaws of victory'

The S&P 500 was sinking by 2.5% in midday trading, potentially on pace for its worst day since 2022, and on track for its first back-to-back loss of more than 1% since April.

fortune.com

“Crash”. lol. Over last 12 months NASDAQ is still up 20%, SP500 18% and Dow 12%. Add to the pressure to try to get fed to finally lower rates, the stuff happening between Iran and Israel also was a big factor in yesterday’s profit taking.

 

[Menace Sockeyes]

​

​

Stocks crash on recession fears as the ‘Fed is seizing defeat from the jaws of victory’​

Stocks crash on recession fears as the 'Fed is seizing defeat from the jaws of victory'

The S&P 500 was sinking by 2.5% in midday trading, potentially on pace for its worst day since 2022, and on track for its first back-to-back loss of more than 1% since April.

fortune.com

Um, why did you post an article from midday yesterday? To hide the fact that it rebounded a full percentage point by the end of the day? We’ve had worse days this year, and it’s been a good year.

 

[binsfeldcyhawk2]

“Crash”. lol. Over last 12 months NASDAQ is still up 20%, SP500 18% and Dow 12%. Add to the pressure to try to get fed to finally lower rates, the stuff happening between Iran and Israel also was a big factor in yesterday’s profit taking.

I didn’t write it 😁

I would have called it a “correction”.

Um, why did you post an article from midday yesterday? To hide the fact that it rebounded a full percentage point by the end of the day? We’ve had worse days this year, and it’s been a good year.

Actually I posted it because the article blames the fed for waiting too long on rate reductions.

Not surprised by your take though 😂

 

[luvmyhawks]

Anyone familiar with the Japan reverse carry trade and its implications on US equities? $20T to unwind?

Can the Fed or Treasury ward this off somehow?

View embedded media

View embedded media

Carry Trade: Definition, How It Works, Example, and Risks

A carry trade is a trading strategy that involves borrowing at a low interest rate and investing in an asset that provides a higher rate of return.

www.investopedia.com

@Randy Marsh
@hawkeyez
@bunsen82

I would like to think this is straight fear mongering. Unfortunately, a lot of what is said here makes sense and is kind of scary.

 

[soybean]

Euro banker takes the borrowed Yen, exchanges them for dollars

There is the rub.

 

[soybean]

Pundits always like to described like its easy money because only the executor understands how it works. In reality the market understand it well and makes it its business to correct.

 

[Flie]

My "favored result"?

I favor America.

A recession in the fourth year of an administration is a sign that it's time to move on and try a different approach.

Like when the economy tanked at the end of Trump/bush jr/bush sr’s terms? Almost like there is pattern there.

 

[nu2u]

View embedded media

View embedded media

Not at 0400 but…😁

C’mon man tariffs which are targeted and calibrated are part of an effective trade strategy.

Trump has recently proposed a 10% across the board tariffs -and- a blanket up to 60% tariffs on all Chinese imports. Trump’s plan is plainly stupid, inflationary, and likely to start a trade war.

 

[hawksurprize]

My "favored result"?

I favor America.

A recession in the fourth year of an administration is a sign that it's time to move on and try a different approach.

But there is no different approach. Twiddle dee or twiddle dumb?