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Email this10:14 pm
October 21, 2013
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Interesting interview with Prof Campbell Harvey, who discovered the relationship between yield curve and recession.
https://www.bnnbloomberg.ca/this-time-isn-t-different-says-the-prof-who-first-linked-inverted-yield-curve-with-recession-1.1305520
11:30 pm
October 29, 2017
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Yep, it’s going to hurt big time, this go around.
8:20 am
February 20, 2018
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The yield curve is a narrative being promoted by interest groups if it wasn't we could all make a fortune. It's dates math r being manipulated to suit the group probably the industry led by leading traders. Sorta like y2k.
The good news is if vatox is right we'll be able to buy assets like currently wildly overvalued stocks cheap
1:33 pm
October 29, 2017
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dealjunkie said
The yield curve is a narrative being promoted by interest groups if it wasn't we could all make a fortune. It's dates math r being manipulated to suit the group probably the industry led by leading traders. Sorta like y2k.The good news is if vatox is right we'll be able to buy assets like currently wildly overvalued stocks cheap
Oh, the crash and crisis are coming! The stats and conditions are all beyond anything in the past. The only questions are, when will it happen and what will be the trigger? I’m betting on Italy.
2:58 pm
February 20, 2018
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Great! Look forward to buying dirt cheap assets for a quarter of price.
How do u think depositors will fair?
As long as the system doesnt burn to the ground im cool with billionaires, speculators and idiot money losing big
Vatox got the rate downturn right so far
3:23 pm
February 27, 2018
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Vatox said
The only questions are, when will it happen and what will be the trigger? I’m betting on Italy.
You lost me with "italy". The Italians are a non event. If you'd said China and the crash of their currency, or China recalling American debt. That i would think plausible. Tomato sauce and olive oil will not end the world.
The European P.I.G.S. - Portugal, Italy, Greece and Spain have been bankrolled by the EU. Germany, there might be an issue there, their economy is apparently slowing.
https://fortune.com/2019/02/14/italy-olive-oil-climate-change/
4:34 pm
October 29, 2017
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Kidd, Italy’s debt is $2.3 trillion and it’s economy is 10 times the size of Greece. Italy is the third largest economy in the Euro Zone. Unlike China and the U.S., Italy doesn’t control it’s currency, the ECB does. The ECB could just pump liquidity to ease a potential crisis, but all of Europe would suffer and the EU is the third largest economy in the world. That’s a big problem.
Having said that, Sovereign debt problems aren’t know to cause a crisis. The U.S. corporate debt has gone ballistic, buying up stocks to increase dividends instead of investing the borrowed money into new technologies and factory efficiencies. Corporate debt issues could be the next trigger.
Liquidity is going to be the cause, we will just have to see how it plays out.
5:42 pm
February 20, 2018
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a trillion is becoming peanuts
6:36 pm
October 29, 2017
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dealjunkie said
a trillion is becoming peanuts
Lol, that’s exactly the kind of sentiment that has lead us to the upcoming economic disaster.
World debt is around $244 trillion and that’s 3 times world output. Corporate debt is nasty and so is personal debt. Remember, we don’t live in a vacuum, the ripples and shockwaves will hit all.
8:24 pm
February 20, 2018
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We r up 6trill
"The total wealth of the world in 2015 was estimated to be $250 trillion dollars by Credit Suisse in their annual global wealth report."
11:05 pm
October 29, 2017
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So.. you are proud of a 97.6% debt ratio? Oh, I forgot, some nations are at 250%, so the 97.6 looks okay from that perspective. NOT, but unfortunately you and many others think that way and that’s why it’s all going to burn.
5:52 am
February 20, 2018
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If it burns rates will shoot up no? due to loss of confidence its happened before e.g. quebec currency crisis n other soverign debt crises
7:28 am
December 12, 2009
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Vatox said
So.. you are proud of a 97.6% debt ratio? Oh, I forgot, some nations are at 250%, so the 97.6 looks okay from that perspective. NOT, but unfortunately you and many others think that way and that’s why it’s all going to burn.
+1 to this (wish we had a +1 feature on here, though maybe not a downvoting feature as that is often misused). 
Cheers,
Doug
8:28 am
February 20, 2018
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so what assets are best to hold thru the collapse?
8:50 am
October 29, 2017
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dealjunkie said
If it burns rates will shoot up no? due to loss of confidence its happened before e.g. quebec currency crisis n other soverign debt crises
Rates definitely won’t shoot up! We are edging closer to rate decrease territory. I think a rate decrease is a bad idea and that it would simply make things worse in the long run. But the government wants to sell bonds easily. I hope cooler heads prevail and rates just hold.
Edit: you are confusing bond rates with deposit rates and central bank rates.
11:21 am
February 20, 2018
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r u saying in a financial catastrophe government will still be able to sell bonds at 0 or less percent
i thought bond prices affect deposit rates
11:50 am
May 27, 2016
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dealjunkie said
so what assets are best to hold thru the collapse?
Gold coins, canned food and lots of ammo....
12:21 pm
October 29, 2017
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dealjunkie said
r u saying in a financial catastrophe government will still be able to sell bonds at 0 or less percenti thought bond prices affect deposit rates
Bond prices, bond yields and bond coupon rates are 3 different things. Bond rates don’t affect deposit rates. Deposit rates are determined by FIs and can change at anytime but usually move after the central banks change the overnight rate.
Having said that, if bond yields get too low, it may push the central bank to lower the overnight rate which then may cause FIs to lower the deposit rates. The 5 year bond yield is low right now and falling. This is the fear that may bring on a BoC rate drop. I think a rate drop is a bad idea and I’m not just saying that because I don’t want my HISA to pay less. I really do think a rate drop will create an even bigger problem.
12:52 pm
October 21, 2013
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I'm not an economist but it seems to me that lower rates encourage more borrowing. This is bad for consumers because it creates more indebtedness that may not be sustainable. And corporations are not reinvesting like they should be so lower rates won't do much good there either. I can't imagine the banks even like it because it reduces their spread.
As an aside, the other day I was at a credit union branch and the rep told me with great excitement that their five year mortgage rate was now X (very low). He knows I have no interest in mortgages, that I'm only interested in higher rates, not lower. It kind of turns my stomach when I see them getting so excited about things like this. It seems like the only thing that gets their juices flowing is more loans, but these can't fuel the future if they can't ever afford to raise the rates because people won't be able to afford to sustain the loans
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