10/18/2018 – A negative day with the Dow Jones down 327 points (-1.27%) and the Nasdaq down 157 points (-2.06%)
As we have been saying for some time, the stock market finds itself at an incredibly important juncture. Things are about to move. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here.
MISH had an important write up on the yield curve. Let’s take a look
Some believe recession risk is minimal because the yield curve is steepening and there has been no inversion.
In regards to steepening, there is not much credence except in isolated incidents like that shown in the “Steepening Yield Curve Snapshot”.
In regards to inversion, there is no rule that says the yield curve must invert before before recession. Japan provides an excellent example.
Mish is dead on in his analysis and we have been saying the same thing over the last few months.
The actual inversion is never very deep and does not last very long. Historically speaking. As a result, the event itself is of limited importance.
What is?
The flattening of the yield curve going into the recession and/or stock market collapse. It takes much longer and it is devastating to earnings of most financial firms. The primary driver behind today’s so called debt fueled recovery. And today’s yield curve is already as flat as a poor’s man pancake.
In other words, most of the damage has already been done. It is little beside the point if the yield curve actually inverts (it will) or not.
Our mathematical and timing work associated with the stock market tends to agree. If you would like to find out what happens next, please Click Here.
