Recession Red Flag Rears Its Ugly Head - Treasury Yield Curve Crashes To Post-Crisis Flats

Probably nothing...

The last two times the spread between 30Y and 5Y Treasury bonds was below 90bps, the US economy entered recession...


And the 2s10s curve is tumbling too - to its flattest since the crisis...


But, but, but, how can a recession be coming with stocks are record highs?



BigWillyStyle887 Mon, 10/16/2017 - 10:33 Permalink

Am I the only one that thinks those treasury curve graphs are inconclusive? It took 3 years last time for it to go under its "critical red flag doom fear" line and rise back above it for the "recession" to start. Are we officially starting the 3 year countdown to recession here on zerohedge or is this lazy journalism?

CRM114 Dewey Cheatum … Mon, 10/16/2017 - 11:40 Permalink

Not necessarily.Although the quantative stuff is all to pot, there may still be some qualitative indicators which remain valid. It's extremely hard, if not impossible, to work out which those are from first principles.So, I am paying attention to any indicators which either reach a turning point or switches positive/negative. I then assess that indicator's data, and compare with my real world experience for the implications.I have not found one yet. 

In reply to by Dewey Cheatum …

Blankfuck Mon, 10/16/2017 - 10:38 Permalink

FED RESERVE FUCKERS DID IT AGAIN! multiple offers on housing,OVERBOUGHT EVERYTHING!  i see it clear these FED RESERVE FUCKERS CREATED THIS BUBBLE ALL OVER AGAIN! i will be so happy this time when banks fold to broke! NO MORE FUCKING BAILOUTS FOR THEM!

wintraiz Mon, 10/16/2017 - 11:05 Permalink

That blue dotted line there shows where the analysts at SHEPWAVE called the Trump rally while EVERYONE ELSE was saying the markets would crash.  EMOTION WILL RUIN YOU EVERY DAY. 

wmbz Mon, 10/16/2017 - 11:31 Permalink

I just ordered my DOW 30,000 cap! Stawks are on the way to da moon Alice.Buy now or be priced out forever! The machines have your back.

katagorikal Mon, 10/16/2017 - 15:24 Permalink

Including the end of 2004, surely that should be:"Two of the last three times..."Or to focus on the 2005-7 period explicitly:"The last time the 5s30s & 2s10s went down through 90 & 77 bps from above, there was a 3 year boom."