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> Are there any known ways to counter attack an artificially induced recession? You can hedge for recessions. If you think the central banks are blowing stuff
by jarsin 4y ago
> Are there any known ways to counter attack an artificially induced recession?
You can hedge for recessions. If you think the central banks are blowing stuff up and the economy is going to go into a recession putting capital into government bonds like TLT is a flight to safety trade. The reasoning is if a recession comes then the central banks will have to lower rates and money will come pouring in from risky investments and from savings accounts.
I think all recessions are artificially induced since the creation of the fed.
- shrimpx 4y agoMoney will come pouring into bonds? Trying to understand the reasoning for buying bonds.
- jarsin 4y agogovernment bonds trade opposite interest rates. Interest rates down TLT up. Interest rates down cash needs more yield comes running to tlt. A lot of data out there that stocks crash after the pivot meaning they see the pivot as a recession and go racing into safety. Doesn't all happen in a straight easy line though. Headline from decemeber and I checked tlt and its near top of etf inflows ytd. TLT saw its second-largest inflow ever, with a gain of $1.5 billion, Bloomberg reported.
- pas 4y agocovid caused one without central banks 2008 was probably the Fed waiting too long to decrease rates (because of the meme that housing was a bubble, and failing to notice the spillover from super high price areas, due to that the housing stock is missing millions of units)