Yield Curve Flashing Biggest Recession Signal Yet: Shilling Thinks It Started!

-edited

Treasury yields have plunged at the mid to long end of the yield curve producing biggest recession warning yet.

On Friday, US Treasury yields plunged at the mid to long end of the curve providing the most inversions since the start of the Great Recession. This is the biggest recession warning since 2007.

Yield Curve

Click on chart to expand.

Major portions of the yield curve are inverted for nearly 15 years.

Let's take a look at what others are saying.

Core Capital Goods

That is something I pointed out as well in Dismal Durable Goods Report: Inventories Up, Shipments and New Orders Down.

Core capital goods are a measure of future business expansion. The March revision to the downside was massive, from +1.3% to +0.3%. April was -0.9%. Economists expected +0.1%. Oops.

Strong Economy Not

GDP Assessment From Markit

1.2% and falling

What's the ECB Gonna Do?

Spotlight Trade War

What About Systemic Risks?

Japanese Exports

South Korea Exports

Major Appliance Shipments

Recession Already Started?!

Mike "Mish" Shedlock

Comments (27)
No. 1-14
Casual_Observer
Casual_Observer

What is a recession ? Certainly there haven't been two consecutive quarters of negative GDP.

Six000mileyear
Six000mileyear

This inversion is a great opportunity for the Federal Reserve to unload its balance sheet. China would be wise to do the same thing.

Menaquinone
Menaquinone

There is no market for Treasuries. The Federal Reserve buys and sells to set the price. There is no market signal, US Treasury cannot pay high interest rates therefore the rates are set below what a market would dictate. The free market rate for Treasuries would be near 6%.

So who buys Treasuries? You get a gurandamnteed return of debased principle. That's good for insurance companies and retirement funds. Regulated banks are obliged to buy Treasuries or they get regulated out of business. Same goes for Goldman Sachs, et.al. These entities have an unlimited supply of free dollars to buy Treasures. They buy or the free money dries up.

That's the game.

lol
lol

Not recession,collapse happens in stages,first the complete collapse of retail,now the stunningly fast collapse of the auto sector,next freight haulers and even Walmart and dollar stores are staring down the barrel of thousand of store closures!

FromBrussels
FromBrussels

....at one point even Central banks' desperate meddling with economic cycles will become insufficient....and then what? THAT is the question , the 200 trillion dollar one !