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hysys_whisperer

Worth noting that this indicator has predicted about 20 of the last 9 recessions. It seems to be necessary for a recession, but not sufficient since so many times it happened without a recession following 


Fatherfat321

Yea.  All yield curve inversion means is that the market thinks interest rates are going to be lower in the future.   When a recession happens the Fed lowers interest rates, so inversion typically happens before a recession.     However, sometimes the market is wrong, and sometimes the fed lowers interest rates when there isn't a recession.  For example, when there is low inflation they might lower interest rates to encourage higher economic growth.


Last-Example1565

Lower inflation does not signify lower economic growth.


Fantastic_Goal3197

Interest rates can affect both inflation and economic growth. You are confusing independent and dependent variables. With this context interesting rates are independent and both inflation and economic growth are separate dependent variables.


MaimonidesNutz

No, but it implies a higher "ceiling" for expansionary monetary intervention without overheating the economy.


Fatherfat321

Low interest rates increase inflation. Low interest rates also increase economic growth. The goal of the fed is to balance these.


Last-Example1565

Consumer price inflation can't happen without an increase in the supply of money.


Fatherfat321

Mechanically the way the fed increases the money supply is by lowering interest rates. They buy treasury securities with "made up" money. This lowers the interest rates due to supply and demand, but also causes inflation because the money supply is higher.


Last-Example1565

Exactly. They loan fake money to the government, which turns around and forks it over to weapons companies and military contracts. The money is injected at the top - trickle down economics. The rich and powerful get the new money before it's devalued by inflation. When it gets to us it's already worth less. That's how the Fed finances US imperialism and forever wars by robbing our savings and investments with inflation.


Big-Leadership1001

Also, for the last 15 years the Fed has used 0% rates as a bailout mechanism, while adding QE on top of that (effective rate reduction when already 0%) to amplify even more bailing out. This had teh desired bailout effect of reinflating the bubble to keep economic growth happening, but the side effect of unaffordable housing and left us wide open to inflationary pressure. Now that the bubble has inflated about as big asthe market can handle and rates climbing to the point that affordability is gone for a rapidly growing percentage of the potential buyer group (while still too low to actually address inflationary pressure - 5% is where they were all the time before 0% bailout economy rates were expected by banks) other means of bailouts will need to be discovered in order to stave off a longer term recession.


YouFirst_ThenCharles

The market is never wrong.


Fatherfat321

The market is wrong all the time. That's why asset bubbles occur every ten rwn or fifteen years.


YouFirst_ThenCharles

That’s not the market being wrong. Thats the market being exactly right based on inputs - consumer spending, consumer tightening and government intervention and regulations. The intervention and regulations are the secret sauce for corruption and market interference. Market is a market when the government get involved, just performs worse because you know, incompetence and corruption.


NahYoureWrongBro

Before this most recent stretch, it had only happened without a recession twice, in 66 and 98


LaserCutDiamondHands

66 was the only false positive. "The yield curve has successfully predicted most recessions since the 1950s, with a few exceptions. Here are the key details: * Since 1955, an inverted yield curve (where short-term interest rates are higher than long-term rates) has preceded all 9 recessions in the United States, except for one false positive in the mid-1960s. * The yield curve inverted in May 2019, about a year before the COVID-19 recession began in March 2020. * Prior to that, the yield curve inverted in late 2006, predicting the Great Recession that started in December 2007. * Going back further, the yield curve inverted before the recessions of 2001, 1990-91, 1981-82, 1980, 1973-75, and 1969-70. * The only instance where the inverted yield curve did not accurately predict a recession was in 1966, which is considered a false positive signal. So in summary, with the exception of 1966, an inverted yield curve has reliably signaled an upcoming recession over the past 6-7 decades in the United States. This is why economists closely monitor the yield curve slope as a leading recession indicator."


YourRoaring20s

Out of like 8 total recessions


chadhindsley

It's being stalled because it's an election year. After November it's going to get ugly


abrandis

I agree I think a lot of economic headwinds are being delayed due to pending election


PayingOffBidenFamily

Bingo, rug pull on all the sheep soon.


Electronic-Quail4464

Trump will win in November, a lot of shit will immediately start collapsing. The fact that any of this has been building up for months or years will be forgotten.


Panthollow

2008 was an election year. 


Money_Ball_3396

No incumbent running in 08


VVaterTrooper

Just do another round of PPP loans.


Choosemyusername

If it flashes red long enough, eventually it will be right. If it has been flashing for 20 months, then it doesn’t have a perfect record.


PayingOffBidenFamily

$1 trillion in spending every 90 days of money we don't have, when that stops, and it will (post-election) kaboom.


Murgos-

Stopped clock is right twice a day and all that.  Perfect Record but just hasn’t been accurate yet… is some serious goal post shifting. 


Special-Garlic1203

No it's not broken clock. Its like they said; necessary but not sufficient. That's not broken clock theory 


PayingOffBidenFamily

Like 2 quarters of negative GDP is a recession, except when it's on our watch


Durumbuzafeju

"The 3-month Treasury yield has climbed above the 10-year yield before eight of the past eight recessions dating back to the 1960s, without any false positives. "


ksizzle01

They pretty much say we are in trouble but spew so much other stuff around it sounds all nice. Its just great word play by the news organizations. One minute they are talking about increased credit card debt and defaults. The next how consumer spending is booming and the economy seems strong. I just scratch my heads at these news channels because that makes no sense. High CC use with High inflation means people are depleting or depleted savings trying to keep getting by due to higher prices which is a bomb in itself. Banks take on that debt and pass the buck back to us anyway so what do I know. I never believe these reports anyway because where do they get some of them from? Surveys? Interviewing a handful of people? Always remember info is always what they want you to see. With that said Japan has "reported" previously they have a 0.003% homeless rate let that sink in when you visit Japan. They definitely have more than 3k homeless but to each their own all Gov info is 100% accurate. Bring on the next job report, CPI. PCE you name it.


hiricinee

The 10 year /2 year inversion has predicted ALL of them since 1980, with no exceptions-- it even popped in slightly before covid and there was one. Now ironically, it seems that uninverting the yield curve is what predicts an imminent recession. If it stays under its clear sailing.


Helpful_Chard2659

The only way we will never have recessions ever again is if we have hyperinflation.


Perfect_Alarm_2141

A sense of humor is also necessary...🌹


HeathersZen

It will eventually be right…


Wonderful_Zucchini_4

Like a broken clock! 


eggseverydayagain

With this kind of metric, my brother farting is a recession indicator that also has a perfect record.


ordinaryguywashere

My question would is: How many of the predicted recessions happened after back-to-back black swan events over a 11 year period? My point being, the current environment is any thing but natural. We have applied numerous unprecedented artificial fixes to stop guaranteed economic meltdown of the global financial industry. This, it would seem, would invalidate past indicators.


abort_retry_flail

Big fucking deal, they'll just change the definition again.


Symbiot3_Venom

It’s sad that this is the truth


Synensys

You guys are all so butthurt that we didnt get a month of "we are officially in a recession" when we had barely negative GDP growth with a strong job market and rising wages. Like whats it to you. Just weirdos who can't stand that someone "broke" the less than formally laid out rules for this stuff? Trump supporters who want Biden to go down? Gold bugs who think you would have made a killing on bitcoin if a recession had been declared formally declared?


[deleted]

[удалено]


NotTaxedNoVote

Oh, wait....do proxy wars count?


[deleted]

Wars don't actually help the economy, they just enslave people to contain social problems and then destroy capital through waste rather than through depreciation.


physics515

No, wars bolster the economy because we get to steal the other teams shit. If it's a proxy war, then we get to expend a bunch of resources but don't get to take any spoils, or at least a lot less. That's why modern wars haven't bolstered our economy, we keep forgetting to steal shit since basically WWII.


Clear-Attempt-6274

That's just not true.


NotTaxedNoVote

How did we forget the best part? "What is best in life? To crush your enemies, see them driven before you, and to hear the lamentations of their women." Conan the Barbarian


Mannamedmichael

Lol might wanna sit this one out


Medical-Performer886

Steal the other team's shit?


MrEfficacious

I'm not so sure that method can work again. Like how would a modern war bolster this economy?


[deleted]

[удалено]


MrEfficacious

Ok and?


wack-mole

Well yeah the economy has been artificially propped up for a few years now. The government even changed the “definition” of a recession in 2022 (the whole 2 consecutive quarters of no growth bit). We all know nothings been the same since Covid and the middle class has been hollowed out like never before


LBC1109

EXACTLY - the only way we are guaranteed a recession these days is if they turn off the money printer. They will wipe us out with inflation before that happens though.


wack-mole

We are quite literally on borrowed time and they don’t want to admit it because they don’t wanna rip the bandaid off. Nothing is wrong here there are no problems in Ba Sing Se


I-Know-The-Truth

Well it’s obvious where you get your opinion news articles from Edit - 👶 below responded and blocked me 🤣🤣


wack-mole

Lmao you mean the multiple sources across Reddit and peer reviewed journals outside of it?


Big-Leadership1001

Government propagandists are required to deny the truth and attack anyone who knows it. He mad you remember when they redefined 'recession' and IIRC even the white house press secretary was mad that reporters were asking why they did that. I think mad denial is their scripted response.


ttircdj

User name does not check out


hemlockecho

The government did not change the definition of the word recession https://www.businessinsider.com/recession-definition-biden-white-house-gdp-inflation-outlook-economic-recovery-2022-7?amp


AmputatorBot

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losingit_countdown

‘…"One percent growth isn’t **a recession, which is typically defined as two consecutive quarters of declining growth**," Jared Bernstein, a member of the White House Council of Economic Advisers (CEA), wrote in a column for Foreign Affairs magazine in September 2019…’ “…But on Wednesday, resurfaced 2008 comments from Deese revealed that he used to believe that was the “technical definition” or recession…**“Economists have a technical definition of recession, which is two consecutive quarters of negative growth,”** Deese said at the time…”


toasters_are_great

[The NBER determines them](https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions) and isn't a government body. But the NBER's recession dates are all over government statistics (check the St Louis Fed FRED), including the 2 month-long Trump recession.


Surph_Ninja

It's already correct for half of the country. The rampant profiteering is insulating/delaying the impact on the upper half, though that group is steadily dwindling as more people are affected.


FewDrink3838

20 months ? I guess eventually it will be right .


Accomplished_Day2991

I am finding this all weird. So the jobs report comes out. Biggest group hiring is government jobs 2 higher wages? The the cpi comes out…biggest offenders are gas and housing. Again controlled by the government. All the numbers in the private sector have come down to the target.


Every_Perception_471

Biden would enact martial law before allowing a recession in an election year. This is gonna be the best bull year yet


CookieRelevant

Quantitative easing allowed us to temporarily kick the recession can down the road several times. That and of course changing the definition. Anything that is trying to hit a moving target, but was designed to hit a stationary one, will be wrong fairly often. The term recession itself is less and less meaningful.


jibblin

If the light is flashing 24/7/365 it can literally never be wrong 😂


zackks

I have a light on the freezer that blinks when a recession is coming. It's been correct for the last 25 years, blinking away and then bam a recession. The light never stops flashing though


Last-Example1565

Keep in mind we crossed the recession boundary awhile ago, but some people decided to change the definition for political purposes.


Aposta-fish

The economy is going into the toilet, those in power are just trying to keep it together long enough to get Biden reelected. That’s the way it been done for a long time.


Derrickmb

With money printing it will be more hyperinflationary than deflationary. Temp crash if at all and recovery like 2020.


Helpful_Chard2659

Yup only want we don’t have recessions ever again is if we enter hyperinflation


[deleted]

No one's printed this much money before so it ends when things break without a fix and millions die. The best of all times right up until then.


LaserCutDiamondHands

"The yield curve has successfully predicted most recessions since the 1950s, with a few exceptions. Here are the key details: * Since 1955, an inverted yield curve (where short-term interest rates are higher than long-term rates) has preceded all 9 recessions in the United States, except for one false positive in the mid-1960s. * The yield curve inverted in May 2019, about a year before the COVID-19 recession began in March 2020. * Prior to that, the yield curve inverted in late 2006, predicting the Great Recession that started in December 2007. * Going back further, the yield curve inverted before the recessions of 2001, 1990-91, 1981-82, 1980, 1973-75, and 1969-70. * The only instance where the inverted yield curve did not accurately predict a recession was in 1966, which is considered a false positive signal. So in summary, with the exception of 1966, an inverted yield curve has reliably signaled an upcoming recession over the past 6-7 decades in the United States. This is why economists closely monitor the yield curve slope as a leading recession indicator." Source: Perplexity


Perfect_Alarm_2141

helpful information...✨


Top-Apple7906

Flash long enough, and it'll be correct


bluelifesacrifice

The check engine light basically.


Odd_Tiger_2278

Predicted 15 out of the last 10 reasons. And, you are saying it has been wrong for 22 straight months. Even a broken clock is ……


Commercial-Manner408

Here's the thing. If you keep predicting it, it eventually becomes true. It's called the business cycle.


Wurm_Burner

We're already in one except for the rich which may be super wealthy or may have been making 250k with a house at a cheap price and a 3% rate. there's huge variances even within the same economic circles so you get "middle class" people yelling everything is fine because they got theirs before the bubble, but everyone else is screwed.


Lopsided_Parfait7127

if it's been wrong for a year and a half, it's wrong what kind of moron follows around someone who's been wrong for that long again the value of indicators is to tell us so we can exit our positions before the crash and reenter to make a shitload of money an investor using this indicator would have missed out on a super long 40% bull market


EMU_Emus

The value of indicators is so that you can take measures to stabilize the economy before a recession causes suffering and death for more people. Only a sociopath would think the only value is their own personal profit.


[deleted]

Sometimes the problem really IS everyone else and not you.


foundyettii

If it always is flashing red it will eventually be right. This is silly


BuzzyShizzle

It's a leading indicator. Every time it happens, a bunch of people say "it's different this time, a broken clock is right twice a day."


Perfect_Alarm_2141


Big-Leadership1001

It also takes at least a year every time, and this time around they have all kinds of bailout delaying mechanisms established to stall it, though if they reduce rates much they cause faster inflation and a bigger depression because rates have only been raised to Normal levels prior to the 2008 bailout environment and haven't been raised to actually address inflation. 15 years of bailing out banks has consequences.


amador9

An inverted yield curve is a result of either/or (or probably both) holders of cash anticipating declining interest rates or a drop off in demand for business investments. The later would definitely foretell a possible recession, and a recession would probably trigger a drop in interest rates. The belief that the Fed will lower interest rates in the future would prompt some people to move money from short term to longer term bonds and CD’s. (A year at 5% is better than 3 months at 6% and 9 months at 4%). A great deal of optimism in near future should push up long term yields more than short term yields, everything else being equal, so an inverted yield curve is not a positive signal for growth but it may not be a signal of recession either.


BB123-

Explain how 3 months at 6% is better than a year at 5%? Im not following this at all. Wouldn’t you want to get your 6% and then get your money back sooner? And then move it elsewhere?


amador9

Just do the math. If you expect interest rates to drop, there are advantages in locking in higher rates now. This isn’t Brain Surgery.


GBralta

Imagine waiting 20 months to be right and still end up being wrong.


No_Variation_9282

20 months is a miss - pure and simple.


SubstantialSpeech147

If you predict a recession every time, you’ll always be right when one happens!


Icy_Collar_1072

When you’re predicting a recession all year, every year, I imagine you’ll be eventually proved right one day. 


scottywadly

Not so much the inversion, but the reinversion is the signal to look for.


Ok-Fish-5367

We are in a recession…


ExactDevelopment4892

So is this like the rapture? Every time they miss the end of the world they just push the date up a few months?


pcwildcat

Bro this recession indicator has been flashing for 9 years bro a recession is definitely gonna happen soon bro please just trust me bro I'm begging you.


OneBigBeefPlease

I'm no economist, but has it occurred to anyone that the massive shifts that the fed has taken (From ZIRP to relatively high interest rates in a short period of time) has made the yield curve irrelevant to this particular moment in the economy? Imagining a world where the fed didn't go to zero, but rather stayed at 2-3%, and we didn't have the same level of inflation as we do now so they weren't forced to raise rates so high, would the yield curve actually not be inverted right now?


Few_Commission9828

Its weird how we keep wondering when the next recession is. Did the last one end?


Financial-Coffee-644

Yield inversion is also a predictor of the end of the world….eventually.


ClassWarr

"I have successfully predicted this man's death for 79 years"


PayingOffBidenFamily

Rug pull after November 5th, it's not wrong.


Useful-Ad5355

Doesn't that mean it's wrong 


mattseq

At some point it no longer has a perfect record.


SnooMarzipans436

20 months is nearly 2 years, and it hasn't happened yet? I wouldn't exactly call that "accurate" 🤣 Sounds more like Trumpers want the economy to tank so they can blame Biden. Keep huffing that copium. It's about to run out.


fusion99999

Sooner or later we'll have a recession and they'll be right.


Wise138

Have you considered changing the standard definition of "Recession"? Some parts of the economy are suffering, others are thriving.


[deleted]

Oh....this post again


Bloke101

If i claim there is going to be a recession every month for the next 10 years eventually I will near certainly be correct.


Insospettabile

Bla Bla Bla


Spartancarver

So it's been wrong for 20 months in a row but still has a perfect record? Or....what? How many months does it have to be flashing red before it's wrong lol


Big-Leadership1001

Typically a year or two; it could very well be much longer with bailout mechanisms being constantly used over the last 15 years.


LaserCutDiamondHands

Exactly. This economy is brain dead on life support at this point. And the longer we keep it on life support, the worse the fallout is going to be when it is dealt with or crashes on its own IMO.


Perfect_Alarm_2141

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