You know, the boys in the newsroom got a running bet

We got the bubble-headed-bleach-blond
Who comes on at five
She can tell you ’bout the plane crash with a gleam in her eye
It’s interesting when people die
Give us dirty laundry

Part of me feels sorry for the media. The other part of me knows they brought this on themselves. I miss the days of them telling what happened. No narratives, no opinion pieces, just what happened. They should have started investigating, since they were susceptible to the government’s narrative, the corporation’s narrative, the police narrative, the defense narrative. They shouldn’t have become the story.

And here we are.

The yield curve has inverted. Clearly it’s the end of the world as we know it.

Do you even know what that means?

Most people don’t. I happened to know what it means because I used to be a stockbroker. (Sidebar I aced the Series 7. Got a 94) The sky is not falling. There is a recession coming. Not a news flash. Business is cyclical. The economy is cyclical. These are simple facts.

Very few people can successfully day trade stocks and almost no one successfully “day trades” houses. Everyone gets bit once in a while. It happens.

Many of today’s retirees bought in the early 1980’s. Their initial interest rate was upwards of 18%. Or they did a “wrap” to get into their home. Or some other kind of “creative” financing. Many of their colleagues were scared and didn’t buy. They took the plunge and rode it out. If they paid the median California home price in 1981 was $107,710, that investment should be paid off, even with a couple of refinances to get the interest rate down. Today it would be worth $548,600. That’s median numbers for the entire state. It’s a lot crazier as of late in the Bay Area. That is not a bad return on invest considering that was the rent too.

The bottom line, unless you’re going to live in a refrigerator box under the 680, you need to live inside. If you’re going to live inside you can make a landlord wealthy or yourself. Who do you like better?

From Investopedia:

What is an Inverted Yield Curve?
An inverted yield curve is an interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality. This type of yield curve is the rarest of the three main curve types and is considered to be a predictor of economic recession.

A partial inversion occurs when only some of the short-term Treasuries (five or 10 years) have higher yields than 30-year Treasuries. An inverted yield curve is sometimes referred to as a negative yield curve.

Historically, inversions of the yield curve have preceded many of the U.S. recessions. Due to this historical correlation, the yield curve is often seen as an accurate forecast of the turning points of the business cycle. A recent example is when the U.S. Treasury yield curve inverted in late 2005, 2006, and again in 2007before U.S. equity markets collapsed. The curve also inverted in late 2018. An inverse yield curve predicts lower interest rates in the future as longer-term bonds are demanded, sending the yields down.

https://www.investopedia.com/terms/i/invertedyieldcurve.asp

The difference between now and historical data is that much of today’s stock trades are institutional. They are made by computers, based on algorithms. Those trades also affect the bond market. Are we having “false” indicators right now? Maybe, maybe not. These institutional trades may alter historical markers and change what we use to know to be true. What I know for sure is there will be another recession, just like there will be another run up, and we will all make it through it. And with a few notable exceptions, we all want to live indoors.

And just because, Don Henley meets Tom Jones and goes to Bollywood. You’re welcome.