5 ms·

10-year Treasury yield plunges below 0.5%

68 points by shreyshrey 7y ago

mdorazio 7y ago
It’s getting increasingly difficult to say we’re not entering a recession. Pretty much every leading indicator is flashing red now. I’m expecting Q1 earnings reports and forecasts in a month to be the nail in the coffin.
- war1025 7y ago
  Doesn't seem like something that should catch anyone by surprise. That said, it seems like this recession could have a significantly different flavor to it than the others in recent memory. As they say: All happy families are alike; each unhappy family is unhappy in its own way. (Credited to Tolstoy where I looked it up just now.)
  - qohen 7y ago
    It's the first line of Tolstoy's novel, Anna Karenina. (TIL there's something named the Anna Karenina principle after this very line [0]; it's used in statistics and ecology). [0] https://en.wikipedia.org/wiki/Anna_Karenina_principle https://en.wikipedia.org/wiki/Anna_Karenina_principle
  - H8crilA 7y ago
    This has got to be the best telegraphed recession of all times. I cannot believe that anyone having skin in the economic game didn't know that it is likely coming. Come on, don't be ridiculous.
    - war1025 7y ago
      I really don't understand what it is you're replying about since the first line of my comment was: > Doesn't seem like something that should catch anyone by surprise.
- api 7y ago
  We are quite overdue. We have an economy that reliably produces catastrophic crashes every 8 years or so and it's been 12.
awillen 7y ago
Things are definitely looking bad, but given how optimistic the market has seemed over the past months even with lots of bad news coming out, I wouldn't be surprised if there's a pretty sharp recovery once Covid-19 is contained.
- dforrestwilson 7y ago
  When and how do you see it being contained?
  - godzillabrennus 7y ago
    Mike Pence is praying it away. Haven’t you heard?
    - badrabbit 7y ago
      And that's a problem how?
      - serf 7y ago
        it wastes the time of the experts who are expected to be in attendance, who may or may not have the same belief structure. it's fine as a personal effort, it's an issue when it turns into a forced group activity.
        badrabbit 7y ago
        How is it wasting their time. Would you be just as offended if he said "I wish you well" instead? You're just being intolerant toward others beliefs and you think you are any less bigoted because your beliefs are better. He didn't force anything on anyone. You might be ignorant about this but people who believe in prayer don't think of it as hoping or good wishes, they (we) genuinely believe it has actual immediate effect. Your lack of belief does not justify your intolerance, he did not force others to participate. You are free to do more interesting things while he spends what...30 secs doing something you don't believe in? Such a high price for tolerance? And fyi, i am the last person that would support pence politically.
ddavis 7y ago
Jeez, this really isn't the best time to start the process of getting my first job post grad school.
- H8crilA 7y ago
  This too shall pass. Also a recession is a cleansing thing (Austrian school). A lot of unproductive people will be fired and a lot of stupid projects will be shut down, creating space for new ventures. You should take risks exactly during the time of a recession, not during the time of market & general confidence all time highs. Same with young age - take risks when you're young and your downside is small. But it ain't going to be easy. (contingent on the recession actually materializing).
  - __s 7y ago
    For a novel that romanticizes this idea that recessions are the time to take risks, see The Driver by Garet Garrett
    - H8crilA 7y ago
      Ahh, the times of bimetallism. Bimetallism was the Bitcoin of the times, railroads were the "tech" of the times. Robert Shiller has a very entertaining comparative research between Bitcoin and bimetallism in his book Narrative Economics: https://youtu.be/QV0JrMV5nnc https://youtu.be/QV0JrMV5nnc
    - scrupulusalbion 7y ago
      Thanks for the recommendation! Here's a PDF version of it: https://mises.org/library/driver https://mises.org/library/driver
  - castratikron 7y ago
    It might actually make sense to work for sweat equity again.
- JMTQp8lwXL 7y ago
  If you are skilled at what you do, you'll survive unscathed, in the long term. Those statistics about people earning less in aggregate (that graduated during the last recession) are true, but you don't have to be the average employee. If you work for it, these forces working against you can be overcome.
fragsworth 7y ago
There are three solutions: 1) Government makes more treasuries, sells them to the fed, and spends the money on infrastructure. That increases government debt, but improves our deflation situation and shrinks the loan bubble a bit. Preventing a deleveraging. 2) Government literally prints money, and gives it to people. That will rapidly increase inflation, which will increase corporate profits, shrinking the loan bubble a bit, preventing a deleveraging. 3) Don't do 1 or 2 because it basically redistributes wealth. Wait for rich people to spend their massive wealth on CPI-style goods and services, causing poor people to eventually have and spend more money. This takes aeons. As far as I can tell, the powers that be have decided that #3 is the solution, and absolutely refuse to have a stable monetary system that involves giving anything to poor people.
- woofie11 7y ago
  I think #2 is the right outcome. Perhaps not give the money to people outright, but use it to manage the situation (e.g. cover lost wages for people staying at home from work, help airlines and similar businesses stay afloat, etc.).
- JMTQp8lwXL 7y ago
  In the economically prosperous portions of our nation, inflation is doing just fine. Housing prices have performed phenomenally in the past decade. The overall CPI understates inflation because there's a great number of areas that aren't economically relevant in the U.S. and consequently haven't experienced the accompanying inflation.
- jdkee 7y ago
  Rich people don't spend their wealth sufficiently to propel the economy. https://en.wikipedia.org/wiki/Marginal_propensity_to_consume https://en.wikipedia.org/wiki/Marginal_propensity_to_consume
lgleason 7y ago
Every year the flu kills 640,000 people world wide. Right now we are at 3648 from coronavirus. Also there is a lot of evidence to suggest that the actual number of infections is much larger than the reported numbers. This means that the actual death rate is much lower than what is reported. All of this smells like a massive over-reaction to the coronavirus. There has been a correction to world markets going on for a while with the US being a possible exception. What actually shakes out it tough to say. Sadly, the markets are controlled just as much by sentiment as by actual hard data so...
- cjbprime 7y ago
  > Every year the flu kills 640,000 people world wide. Right now we are at 3648 from coronavirus. Great. How many people will die if coronavirus infections spread as widely as flu infections?
  - kcolford 7y ago
    Actually, if you had an equal chance of getting either, then you'd have a much much higher chance of dying from flu, according to current statistics. People really underestimate how bad the flu is.
    - cjbprime 7y ago
      What? No way. Please give a citation. The mortality rate of COVID-19 is estimated at 5x-25x flu (0.7%-3.8% death rate) in all datasets I've seen. (Which of course means that getting coronavirus is 5x-25x more likely to kill you then getting flu.) The WHO's current estimate is at 3.4% mortality, near the top of that scale, as of March 3. > Globally, about 3.4% of reported COVID-19 cases have died. By comparison, seasonal flu generally kills far fewer than 1% of those infected. > https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---3-march-2020 https://www.who.int/dg/speeches/detail/who-director-general-...
  - JMTQp8lwXL 7y ago
    The lack of a reputable statistic is concerning. I found the number 480,000 deaths (only U.S., not a global figure) circulating on sites including Daily Mail, Business Insider, /r/China_Flu, and abc14news.com, a domain registered in late 2018 and may or may not have any relation to ABC News the company.
gvhst 7y ago
This isn't only because of COVID-19. The OPEC+ union between Russia and Saudi Arabia broke down yesterday. The Saudi's are now flooding the market with crude and are likely going to increase production to record levels. Crude is down 30% as of 3/9 1AM EST. This uncertainty (plus people moving out of energy bonds into treasuries) is also driving the flight to safety.

68 points by shreyshrey 7y ago

It’s getting increasingly difficult to say we’re not entering a recession. Pretty much every leading indicator is flashing red now. I’m expecting Q1 earnings reports and forecasts in a month to be the nail in the coffin.

war1025 7y ago
Doesn't seem like something that should catch anyone by surprise. That said, it seems like this recession could have a significantly different flavor to it than the others in recent memory. As they say: All happy families are alike; each unhappy family is unhappy in its own way. (Credited to Tolstoy where I looked it up just now.)
- qohen 7y ago
  It's the first line of Tolstoy's novel, Anna Karenina. (TIL there's something named the Anna Karenina principle after this very line [0]; it's used in statistics and ecology). [0] https://en.wikipedia.org/wiki/Anna_Karenina_principle https://en.wikipedia.org/wiki/Anna_Karenina_principle
- H8crilA 7y ago
  This has got to be the best telegraphed recession of all times. I cannot believe that anyone having skin in the economic game didn't know that it is likely coming. Come on, don't be ridiculous.
  - war1025 7y ago
    I really don't understand what it is you're replying about since the first line of my comment was: > Doesn't seem like something that should catch anyone by surprise.
api 7y ago
We are quite overdue. We have an economy that reliably produces catastrophic crashes every 8 years or so and it's been 12.

awillen 7y ago

Things are definitely looking bad, but given how optimistic the market has seemed over the past months even with lots of bad news coming out, I wouldn't be surprised if there's a pretty sharp recovery once Covid-19 is contained.

dforrestwilson 7y ago
When and how do you see it being contained?
- godzillabrennus 7y ago
  Mike Pence is praying it away. Haven’t you heard?
  - badrabbit 7y ago
    And that's a problem how?
    - serf 7y ago
      it wastes the time of the experts who are expected to be in attendance, who may or may not have the same belief structure. it's fine as a personal effort, it's an issue when it turns into a forced group activity.
      - badrabbit 7y ago
        How is it wasting their time. Would you be just as offended if he said "I wish you well" instead? You're just being intolerant toward others beliefs and you think you are any less bigoted because your beliefs are better. He didn't force anything on anyone. You might be ignorant about this but people who believe in prayer don't think of it as hoping or good wishes, they (we) genuinely believe it has actual immediate effect. Your lack of belief does not justify your intolerance, he did not force others to participate. You are free to do more interesting things while he spends what...30 secs doing something you don't believe in? Such a high price for tolerance? And fyi, i am the last person that would support pence politically.

ddavis 7y ago

Jeez, this really isn't the best time to start the process of getting my first job post grad school.

H8crilA 7y ago
This too shall pass. Also a recession is a cleansing thing (Austrian school). A lot of unproductive people will be fired and a lot of stupid projects will be shut down, creating space for new ventures. You should take risks exactly during the time of a recession, not during the time of market & general confidence all time highs. Same with young age - take risks when you're young and your downside is small. But it ain't going to be easy. (contingent on the recession actually materializing).
- __s 7y ago
  For a novel that romanticizes this idea that recessions are the time to take risks, see The Driver by Garet Garrett
  - H8crilA 7y ago
    Ahh, the times of bimetallism. Bimetallism was the Bitcoin of the times, railroads were the "tech" of the times. Robert Shiller has a very entertaining comparative research between Bitcoin and bimetallism in his book Narrative Economics: https://youtu.be/QV0JrMV5nnc https://youtu.be/QV0JrMV5nnc
  - scrupulusalbion 7y ago
    Thanks for the recommendation! Here's a PDF version of it: https://mises.org/library/driver https://mises.org/library/driver
- castratikron 7y ago
  It might actually make sense to work for sweat equity again.
JMTQp8lwXL 7y ago
If you are skilled at what you do, you'll survive unscathed, in the long term. Those statistics about people earning less in aggregate (that graduated during the last recession) are true, but you don't have to be the average employee. If you work for it, these forces working against you can be overcome.

fragsworth 7y ago

There are three solutions: 1) Government makes more treasuries, sells them to the fed, and spends the money on infrastructure. That increases government debt, but improves our deflation situation and shrinks the loan bubble a bit. Preventing a deleveraging. 2) Government literally prints money, and gives it to people. That will rapidly increase inflation, which will increase corporate profits, shrinking the loan bubble a bit, preventing a deleveraging. 3) Don't do 1 or 2 because it basically redistributes wealth. Wait for rich people to spend their massive wealth on CPI-style goods and services, causing poor people to eventually have and spend more money. This takes aeons. As far as I can tell, the powers that be have decided that #3 is the solution, and absolutely refuse to have a stable monetary system that involves giving anything to poor people.

woofie11 7y ago
I think #2 is the right outcome. Perhaps not give the money to people outright, but use it to manage the situation (e.g. cover lost wages for people staying at home from work, help airlines and similar businesses stay afloat, etc.).
JMTQp8lwXL 7y ago
In the economically prosperous portions of our nation, inflation is doing just fine. Housing prices have performed phenomenally in the past decade. The overall CPI understates inflation because there's a great number of areas that aren't economically relevant in the U.S. and consequently haven't experienced the accompanying inflation.
jdkee 7y ago
Rich people don't spend their wealth sufficiently to propel the economy. https://en.wikipedia.org/wiki/Marginal_propensity_to_consume https://en.wikipedia.org/wiki/Marginal_propensity_to_consume

lgleason 7y ago

Every year the flu kills 640,000 people world wide. Right now we are at 3648 from coronavirus. Also there is a lot of evidence to suggest that the actual number of infections is much larger than the reported numbers. This means that the actual death rate is much lower than what is reported. All of this smells like a massive over-reaction to the coronavirus. There has been a correction to world markets going on for a while with the US being a possible exception. What actually shakes out it tough to say. Sadly, the markets are controlled just as much by sentiment as by actual hard data so...

cjbprime 7y ago
> Every year the flu kills 640,000 people world wide. Right now we are at 3648 from coronavirus. Great. How many people will die if coronavirus infections spread as widely as flu infections?
- kcolford 7y ago
  Actually, if you had an equal chance of getting either, then you'd have a much much higher chance of dying from flu, according to current statistics. People really underestimate how bad the flu is.
  - cjbprime 7y ago
    What? No way. Please give a citation. The mortality rate of COVID-19 is estimated at 5x-25x flu (0.7%-3.8% death rate) in all datasets I've seen. (Which of course means that getting coronavirus is 5x-25x more likely to kill you then getting flu.) The WHO's current estimate is at 3.4% mortality, near the top of that scale, as of March 3. > Globally, about 3.4% of reported COVID-19 cases have died. By comparison, seasonal flu generally kills far fewer than 1% of those infected. > https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---3-march-2020 https://www.who.int/dg/speeches/detail/who-director-general-...
- JMTQp8lwXL 7y ago
  The lack of a reputable statistic is concerning. I found the number 480,000 deaths (only U.S., not a global figure) circulating on sites including Daily Mail, Business Insider, /r/China_Flu, and abc14news.com, a domain registered in late 2018 and may or may not have any relation to ABC News the company.

gvhst 7y ago

This isn't only because of COVID-19. The OPEC+ union between Russia and Saudi Arabia broke down yesterday. The Saudi's are now flooding the market with crude and are likely going to increase production to record levels. Crude is down 30% as of 3/9 1AM EST. This uncertainty (plus people moving out of energy bonds into treasuries) is also driving the flight to safety.