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      12-05-2018, 11:21 PM   #11
WestRace
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Quote:
Originally Posted by 2000cs View Post
The fed is also liquidating its (QE) balance sheet, which is raising short-term yields and thereby creating some of the inversion.
I thought they already been doing that since beginning of this year (or last year) on a regular basis?


Quote:
Originally Posted by 2000cs View Post
Add to that the Fed wanting to raise rates (again it’s tool is short term rates) so it has room to cut when the next recession arrives,
But I think it's the bond market that creates the inversion? That is they are betting that the FED will have to lower the rate because the recession coming?

Quote:
Originally Posted by 2000cs View Post
new House fails to make tax cuts permanent, can’t agree with a Senate on infrastructure, etc
I actually think this is a good thing.

Quote:
Originally Posted by 2000cs View Post
and housing seems to have run up too quickly
I think a lot of the bank profits coming from housing loans and housing cost is just too expensive compared to real income. With housing slowing down, the banks profit will take a hit (which what's been happening with their stocks) With 3.7% unemployment but some of it has to be in thin ice, once the recession comes, a lot of those people will loose their jobs and their house, and once the housing market takes a hit, it will be a domino affect that is very hard to predict.

Quote:
Originally Posted by 2000cs View Post
So many factors that it isn’t “classic” market inversion and thus may not be a solid indicator of recession, but certainly a warning sign.c
I think if we have a sustain inverted yield curve then the odd for a recession is more likely. If it's a temporary one then maybe not.

But regardless, everything seems to be max out. Stock price, housing, QE is already max out (I can't imagine we try QE again), interesting rate although going up is still at historic low and I can't imagine going to 0% again.
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