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comment by wasoxygen
wasoxygen  ·  1329 days ago  ·  link  ·    ·  parent  ·  post: US Treasuries Never Wrong - well, not really

Hey blackbootz, how are things? Welcome to August 2020. Let's see how your predictions worked out.

    I place 70% confidence that a 10-year US Treasury compared to the 2-year US Treasury will invert sometime within a month of February 2019,

The 10-2 inversion happened in August 2019.

    and then within 12 months of that inversion we will see the peak of the bull run,

The Dow and S&P 500 peaked in February 2020.

    and then 6 months from the peak will be a recession.

NBER called the recession in February 2020.

Your predictions were very good, with a little allowance for timing! Yield curve inversion remains an impressive indicator.





blackbootz  ·  1321 days ago  ·  link  ·  

That's remarkable. I edited the typo in the prediction, because indeed I meant February 2019 not 2018. That said, to the extent my prediction counts for something because I was accurate about the cause, I feel I was wrong. My understanding of the yield curve is that it's something like a bet about the state of interest rates in the future. Implicit in estimates of low rates in a year or two (which gives the curve its inversion) is that the Fed pursued a course of accomodative monetary policy in response to some crisis or business cycle. Now, the Fed certainly did do that, but not for "standard" recession reasons which I prophesied, something original to the financial sector, not a pandemic. It feels hollow to claim victory.

But it's fun to follow up on these. More predictions!