Best Of The Web
“The yield curve’s inverted! The yield curve’s inverted! That was the news I awoke to last Wednesday on CNBC as the 10 year Treasury note yield dipped below the 2 year yield for the first time since 2007. That’s the sign everyone has been waiting for, the definitive recession signal that says get out while the getting is good. And that’s exactly what investors did all day long, the Dow ultimately surrendering 800 points on the day. I don’t remember anyone on CNBC mentioning it – although surely they must have – but by the end of the day the curve actually ended up back in positive territory, the inversion lasting less than a day. So, never mind. Maybe.
Of course, the 10/2 curve is only a small slice of the yield curve and other parts have been inverted for some time. Indeed the Fed’s research says the 10 year/3 month curve inversion is the most accurate for predicting recession and it has been inverted since May, although you can be excused for not knowing that since no one seems to care. No, the one that gets everyone’s attention is the 10/2 curve, the granddaddy of all the yield curves because, well, just because, okay? It’s the curve everyone is watching and the people watching the people who are watching it think it’s the curve the watchers think is most important, so when it inverts, well you just have to sell because you don’t know how long the watchers of the curve watchers are going to wait before they get worried that all the watchers of the watchers of the curve watchers are about to sell, so sell and ask questions later because Lord knows I’d rather be early than late, right?
Is it possible that there is anyone left in America who doesn’t know the yield curve inverts prior to recession? Based on the recent experience of one of our partners, I’m going to climb out on a limb and answer a resounding no. This partner bought a house a few years back and recently had to replace a door. It’s an older house and the door is a non-standard size so he called a door company who promptly sent someone out to hang a new, custom door. The installer noticed the partner was watching the market and a conversation ensued in which the door installer talked at length about the importance of the yield curve and how things were bound to get worse now that the inversion had arrived. Sell your stocks, he warned the partner, and buy bonds.”
JJ Editor's Picks
"U.S. President Donald Trump thinks he’s suffered more injustice than the alleged witches of Salem, but it could be worse. Pakistan’s former president Pervez Musharaff faced possible impeachment in 2008, leading to his resignation. In the end..."
"The 2000s felt like a decade of looking forward. Wi-Fi went mainstream, phones got smarter, social media connected us, digital tools let us rely less on physical ones. But the 2010s brought a shift. There was still tons of new technology, but..."
"While some women experience pregnancy and childbirth as joyful, natural and fulfilling, others find themselves recoiling in horror at the physical demands of carrying and sustaining a child in their womb, and even more so at the potential..."
"A few months ago, the New York Post’s Steve Cuozzo bemoaned the death of the Manhattan power lunch. Gone were the long, decadent afternoons filled with networking and Negronis: “Suit-and-tie-wearing machers in media and Wall Street gave way to..."
"Economic inequality has moved to the top of the political agenda in many countries, including free-market poster children like the US and the UK. The issue is mobilizing the left and causing headaches on the right, where wealth has long been..."
"If you’re not familiar with the Andrew Lloyd Webber musical Cats — or even if you are — then you probably have many, many questions going into the film adaptation this weekend, especially if you’ve witnessed the widespread bafflement the trailer..."
"Despite his precisely targeted campaign and some unexpected support, the chances of Gideon Saar engineering a surprise defeat of Prime Minister Benjamin Netanyahu in the Dec. 26 primaries for the Likud party leadership are still considered modest.."
"Peter Thiel is Big Tech’s most prominent Trump supporter. He is an unabashed enemy of the free press, having covertly funded a lawsuit that bankrupted Gawker three years ago. He has become one of the most vocal pro-monopoly advocates, taking a..."