Financial Sense Podcast Interview On The Loss Of The Yield Curve "Shock Absorber"

By Daniel R. Amerman, CFA

The previous analysis, "Loss Of  Yield Curve "Shock Absorber" Could Mean A Rough Ride Ahead For Markets & Housing" (linked here) was the subject of a recent podcast interview with Cris Sheridan of Financial Sense. We also discuss the quite different reasons which Bill Gross and Ben Bernanke provide in arguing why yield curve inversions may work differently this time around when it comes to predicting recessions.

While this was a premium interview on Financial Sense and is only available to paid subscribers, they agreed to provide a free link so that my audience could listen as well.

https://static1.financialsense.com/broadcast/insider/

fsn2018-1018-amerman-KpWouWD.mp3

A key point which I stress in the interview is that by taking the common approach of looking at the yield curve solely from the perspective of its remarkable record for predicting recessions - half of the picture is being missed.

The inflection point in the compression of yield curve spreads has been reached, regardless of whether it eventually inverts or not. We are already seeing the major implications for stock prices, bond prices and mortgage rates, and we are likely just getting started compared to what is coming in the months and years ahead.

The interview subject is part of a series of analyses, an overview of the rest of the series is linked here.

 

 

 

This analysis contains the ideas and opinions of the author. It is a conceptual and educational exploration of financial and general economic principles. As with any financial discussion of the future, there cannot be any absolute certainty. While the sources of information and the calculations are believed to be accurate, this is not guaranteed to be true. This educational overview is not intended to be used for trading purposes, those making investment decisions should do their own research and come to their own independent conclusions. This analysis does not constitute specific investment, legal, tax or any other form of professional advice. If specific advice is needed, it should be sought from an appropriate professional. Any liability, responsibility or warranty for the results of the application of the information contained in the analysis, either directly or indirectly, are expressly disclaimed by the author.

 

Copyright 2006-2018 Daniel R. Amerman, CFA