What an inverted yield curve means to the market
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- เผยแพร่เมื่อ 21 มี.ค. 2019
- CNBC's Mike Santoli and Rick Santelli break down what the yield curve may be signaling for the market and how a yield curve works.
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Like all explanations of inverted yield curves, this was a perfect breakdown for people who already understand it and didn't need to watch the video.
personally have been buying stocks since the beginning of the year and yet nothing's changed, but I've been reading articles of people still in the same market pulling off over 350k in just a couple months. Its tough out here!
Currently, my primary worry is how to increase revenue during periods of quantitative easing. I cannot afford to witness my savings dwindle away
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Just yesterday CNBC's talking heads were saying nothing can stop this bull run.
Biplav Shrestha as usual.
Perfect time to sell.
I wish they keep saying it. The fact they are not saying it makes me wonder if it's actually different this time
CNBC and all the talking heads crack me up. One day the market can't be stopped. Next day *THE WORLD IS ENDING* We just did a video discussing the accuracy of the Yield Curve. Real in-tune investors have spotted trouble on the horizon for a while now. It's no surprise the market has been sugar-coated especially when you consider other indicators like the $4 Trillion consumer debt in the US. 🤷🏽♂️
It all depends on who you talk to, and if anyone ever tells you something can’t be stopped in the economy you should punch them for being a damn moron.
When they say, "don't worry about it," it's time to panic.
whiskers78753 I know right 😂
Who's "they"?
I’m feeling this man’s energy
I can feel the cocaine
The fact that MSM keeps saying It's not different this time makes me think it's actually different this time.
You were right.
It's alright, the plunge protection team will come save you.
Only for so long.. until they suck in all the weak hands. They only have so many bullets left. My opinion at least. 👍
and then they don't
You came here for the truth
@@recorder12 so let me lay it out for you.
currywaydowntownbang! Nope, not this time.
This guy would be one hell of an economics professor
Patrick Oc he didn’t even know how an ADM works 😂
long term investors should do what they have always done - contribute consistently and do not touch your holdings! As Jack Bogle said the biggest enemy of investing can be the investor itself by panicking and doing something irrational.
Tell that to the Europeans and the Chinese. Oh wait that's right , they invest here too. Why? Because we are the worlds currency and there is no safer bet on the planet.
@@ericanderson3534 *Enron*Lehman*Madoff*Texaco*PCG&E*Worldcom*Bear Stearns*AIG*Washington Mutual* yup - we are the worlds currency and there is no safer bet on the planet. -__-
Now they look worry when David Stockman came here to talk about possible reception they basically laugh at him.
Stockman is laughable. He goes on and on about the impending crash and yet fails to mention that the US is the worlds currency and hence will be the last to crash. Everyone else gets to go first. And that includes China.
@@ericanderson3534 after 2 years....
Here we are again.
This is the best explanation using pen and paper.
Thanks CNBC for replaying this video from yesterday.
CNBC new slogan... Where Ignorance is Bliss!
Gold and Silver. they won't be this cheap for long.
Richard Patrie They have had a negative returns for the last five years while stocks doubled. Duh,
@@todayusapolitics3539 We've had years of shitty economic news, yet the market rises. Ever ask yourself why? Duh.
as a trade it can be okay, in the long term a really bad investment
@@richievengeance9687 economic fundamentals have been net positive for years.
All that high paid talking..... Just say "The fed is fucked"..... No need for the extra time on the work clock.....
LOl! funny as hell!
You are not Naga!
For those of us who studied economics and understand accounting, we see right through your rhetoric!
At least the general public is getting a good warning this time around. Nice explanation and nice video.
Rigged debt based economic system owned by the old money families like Rothschild, Morgan, Rockefellers, and Warburg to name a few will eventually unravel exposing the biggest fiasco in history leading us all into unprecedented uncharted territory. It's just not a sustainable long term value building system despite lasting as long as it has already. If it weren't for the national debt fueling it with continuous money supply, then it would had crashed out years ago requiring America to do up an entirely fresh New Deal reset or else chaos and world war could be sparked off in such eventuality.
Powell basically said without saying it, this will likely be the highest rates for 2019, so everyone dove in. end of story.
ARM. Don't you want a fix rate? ARM MORTGAGE CAN GO SKY HIGH.
You are not too bright, aren't you?!
I just came to see all the economic experts in the comments.
Rick treats his flipchart as if it were a boxer who must be knocked down quickly. And Rick is the World Champion here.
They’re gonna cut rates and print again !!
QE to the infinity
You predicted the future
If these guys know what they are talking about, they'd be on their own beachfront property sipping a drink.
Their overlords are doing just that.
How are they going to make $$ ? Who's going to us the bullshit? FOX?
Does this mean Santelli was wrong when he said the markets would test new highs?
No yes was right. The markets will test new highs in 2019. The FED has signaled yet again that they have their backs and will not permit the market to decline more than 10% over a protracted period. Why? Because all the socialists states and cities would go BK and the powers that be cant not afford to let that happen.
@@ericanderson3534 The FED has signaled the economy is in trouble and therefore will not raise rates this year. That means the market is headed south. The Trumpster is in trouble, bigly.
@@svtrader You're wrong. The Fed saying they aren't raising rates means the market has a leg and is very likely to go higher. Had the Fed said they would be raising rates this year, then the market would definitely be going south. Today was just because of the yield inversion and panic selling. We will retest the highs. I think fall this year is when things may start to go south, give or take.
@@Kennan_Davis You have a reading comprehension problem. The market is heading south because the economy is contracting - which is why the FED will not raise rates.
@@svtrader I don't think Ken really understands how it all works! If the market has legs, then the FED will be more comfortable in raising rate. They are not raising rate because they know that the economy is weak.
CNBC and all the talking heads crack me up. One day the market can't be stopped. Next day *THE WORLD IS ENDING* We just did a video discussing the accuracy of the Yield Curve. Real in-tune investors have spotted trouble on the horizon for a while now. It's no surprise the market has been sugar-coated especially when you consider other indicators like the $4 Trillion consumer debt in the US. 🤷🏽♂️
Right, after 8 years of QE and other FED financial shenanigans to blow the largest financial bubble in the history of the world, just ignore the yield curve and let this sell off be another buying opportunity Again, Again, Again. The party is over, SELL, SELL, SELL.
jack phillips yep you are right on the nose
The Fed has stepped in to continue the QE as soon as they smelled the slowdown and possibility of a recession, by not raising the rates and canceling the further rate increases this year 😉😉 you’re gonna end up being the suckaa by thinking that the market’s gonna selloff 😁
Fed is the rescue team, don’t be a SHTF sucka, but I have a strong feeling that you will still be a sucka because once a sucka always a sucka, you never change 😁😁😁
Great, you and your friends stay long because the shorts need the money, thanks.
what's the going rates on a 3 months yield of bond vs the cd?
When motherhood drops off (in the U.S.) an international bank like the Fed is not responsible for a government that failed to produce customers. Money is generated by large families, that's what had given the U.S. the edge 100 years ago and then somewhat in the baby boom; today is a failure in population and the bank can't bring back the 10 child family. Even if by a miracle women decided to bear children beyond the standard replace yourself 2 you would still need to reset currency beyond the cost of food and housing which as foundations are overinflated at MINIMUM %35!
Reason why back in October 2018 or before Blackrock set aside 1 billion to purchase REITS 😂
Crisis coming, no brainer. 2006? Then what happened 2008-2009..
Just heard them say that.... what a bunch of morons. I pity the people who take this information at face value.
Bond traders are the smartest guys on the trading floor but the recession can be a few months to a couple of years away. It isn't an exact timing tool
Not following the smart money will cost you.....,
You also won't hear about the recession from CNBC until its too late anyhow. Most recessions are confirmed after the market has lost a bulk of it's gains. That's why you always tune out the noise and do your own digging.
We already in one, check Q1 GDP.
I agree, bond traders are hugely prescient and they have to be because the margins are lower and the cost of being wrong is higher. Right now the bond market is speaking quite clearly.
@@sbkpilot1 Gudlach already give warning but market ignoring it.
wow ! ... thanks.
MOAR!
I wonder if they will compare the curve now as of 3-30-2022
3 months on and the 10 year is right down to 2%, lower than curent rates, lower than the 3 month note. Bond market is screaming of a likely recession. Yet stocks havent budged.. probably being unloaded on to retail traders.
Short term interest rates are higher than long term interest rates in the bank.
Why does he say now is not the time for an adjustable rate mortgage
Question. Why has it taken 10 years to slowly slowly invert the yield curve when in the past it happened much more quickly? A: Demographics and flat productivity.
Honestly, the quantitative easeing QE1 - QE4 propped up the economy to prevent collapse by printing more money and pumping it into the economy. The bubble should have burst already but then Trumps tax cuts gave the final boost to profits. Where we are now is personal debt and public debt has created the appearance of growth but it is all smoke and mirrors. People are starting to default on credit cards, and auto loans now, which is huge news not adequately covered and this means they cannot borrow any more money and hence cannot spend more money (although they want to of course). You mentioned the demographic and flat productivity which is a great observation. Productivity per person has actually increased but as a country is has decreased because of the larger amount of people entering retirement and living off what they have produced already coupled with a lot more people living on social security rather than working and producing anything of value to be counted towards productivity.
I lost everything in 08. Now I am shorting and hedging. Good luck.
These talking heads all know what's up. Santelli probably knows the exact date this market will be turn down for good. He is meant for pure misdirection. That's all.
He was trying to be illuminating.
@@ericanderson3534 I have a little more skepticism than that. I don't think guys like him are there for our best interests. But that's just my POV.
@@douglehman9592 I'm ready to buy some bank stocks! After all...they are cheap like CNBC analysts tell me. 👍
@@douglehman9592 I'm gonna get right on that! Likewise to you... Thanks. 😁
Nice explanation.🎃
Did my macroeconomics course in under 5-minutes.
US total debt for 2018 stood at $63.66 trillions. Its US first in debt in the world.
We “kind of “ ignored the signal in 2006 ?????? You mean , we flat out didn’t pay attention at all.
Time to buy asteroid insurance.
Regarding comparison of yield curve inversion today vs 2006-2008 is that in the earlier period the solution for financial institutions was to lend to bad credits. So effectively the Treasury yield curve may have been inverted but the curve for the lender was not. Longer dated loans to bad credits gave them an effective positive slope, i.e. they were still able to borrow short (refers to time, front end of curve) and lend long ( longer end of curve) with a positive difference between the two , say 8-5=3. This is what extended the time frame for the housing markets and by extension the equity markets. Once payback of loans came into question and loans (teaser rates) were reset to actual rates the system started to "blow up." This is a more accurate recounting of what occurred. Thanks for nothing Mike Santoli. Your explanation is called a lie of omission.
Is there an article I can read to learn more about this phenomenon? Thanks
Look out below!!!! Retest 12/24/18 low. As long as 21700 holds we should be fine
cute smile at the end
Ha Ha...Was laughing watching at this today!
Watched video good
April 2022....July 2022....we are in trouble...
Nothing to worry about people! Look how happy and positive MSNBC is! Its all OK! BEWARE: YOU ARE BEING PLAYED.
J T Care to Elaborate.
KEN 777 Does he really have to elaborate?
Two networks that are owned by the same company are saying different things then?
Do your research....see what an inverted yield curve meant through history...
Exactly. All this talk about mortgage rates, bonds, consumer confidence, tarrifs, none of it matters on their own because they are all summed up in the result of the inverted yield curve.
this means growth reached full potental, unemployment etc means also less liqudity short therm, means curve will invert fully, high risk short therm, means market s going down
Maybe not quite yet, but you are correct, it is time to be cautious.
Just talk gibberish and confuse us .we love it
I think he got a little confused in the end.....🤔Good job !
anyone that's ever sat through a 200 level econ class* understands what this means. And the rules haven't changed. Parachutes at the ready.
Freudian slip
short term bonds having higher percentage yields than long term MAKES NO SENSE. it is a sign of the markets signalling a correction BECAUSE the markets are upside down and have become unsustainable
What just happened? I’m confused 😐
A powerful signal of recession came about from the bond market
Here after US yield curve inversion 😃
It looks almost like a freakin option trading graph!
Yeah.....its DIFFERENT this time.... Haaaa ! Strap in for a rough ride in 2020-21.....
it goes like this ...the beast keeps gorging n feasting expanding with every round of QE they keep feedn the beast until a loaf of bread is 5000 and the pops.
Poor Rick Santelli. "ARM." Rick is still flinching from the last Crash, as the next one is upon us.
Sell sell sell! !!!!!!!!!!!!!!!!!!!!!!!!
Adrian. And buy buy buy 😂😂
Buy on lows and sell on heights...I am waiting for this recession, so I can buy more stocks!!!!!
Then next week when the market goes up they will be singing a new tune. Just like they were yesterday. What a damn joke these markets are. Only the big guys really win.
Long term charts have shown this coming since 2015/16. Even going back to 1999 right before the tech crash. But yes.. in general they know most don't do the deep digging so they have free reign over the casual investor.
@@davidscher1620 ok but one down day doesn't mean much when the market has come right back up to previous resistance/highs. It's a bear market when we get lower lows and lower highs. Right now this is a sideways market for the past year and a half.
@@jbeck6560 the very nature of a bear market is having long term resistance levels and testing them. Like you said.. we are there right now.. at 2800. They call it a steel wall of resistance for a reason. But we have negative divergences everywhere and that spells trouble. In general, I am not disagreeing with you.. just saying, you can most definitely identify tops that take place. Also noticing a head and shoulders pattern on long term charts.. those don't happen very often. In fact.. never on the s&p in over a 100 years.
@@davidscher1620 yeah but it could also be a bull flag currently
@@jbeck6560 bull flag would require a descending wedge pattern or triangle along with positive divergences in momentum, within this extended bear market rally. I'm seeing a bull trap if anything. . Just my interpretation.
I thought that when the yield curve inverts the recession generally hits 12-24months later. So why is everyone bailing now? Are you sitting in cash for the next year or two, with near zero interest rates? Or, is ‘this time different’? ....Because the Fed, and all the economists, and market commentators have telegraphed the future by keeping normal retail investors educated on what happened in the past. So retail investors and robots have jumped early, causing a self-fulfilling prophecy?
The bond market is going to meltdown in the next 24months. Brace yourselves it's about to get ugly.
InChrist87 ok, but why?
Well in that case I will put all my retirement saving ASAP .thanks for the tip . 💰 💰 💰.
why did he tear off the last page? he was out of paper and wasnt going to write anything else.
0:04. Mathematical complexion a thing, or did he mean inflection?
He's too smart. What did he say?
This happened in 2006 crash was 2008, good, but time not play here.
Somebody tell the girl to get some manners. These people are rude. It's not enough they don't let their guests get a word out. They interrupt each other.
Astrology is king in time market.
"Battle Stations"...
Short SPX?
This is why I am buying gold. And silver to. This time things are worse.
END THE FED already
Bitcoin can solve this problem.
A I will take your MOney And your ELectricity
cnbc should be doing more of these videos. Rick santelli knows a lot more than what he presents daily.
Still no answer of what yield curve means seen. In America growth is achieved through credit. Bond market is credit. When public companies (bond sellers) with shares expand, they go through bond markets. When companies don't expand, their earnings growth goes down followed by stock price. Bonds lead stocks.
When bond (buyers of credit) investors see a stable economy in the future they buy long term bonds due to higher interest rates in normal curve and predicatbility with inflation. when they see bad outlook they move to short term.
When everybody (creditors and buyers of credit) sees uncertain future, they don't buy 30 y bonds.
When nobody buys 30y bonds they need to increase the interest to entice investors. When companies with excess credit that have ARMs too need to rollover their debt but rates are then increasing, this is how blow ups happen. To make ends meet companies are surviving on credit, now to continue to survive the amount to service their debt has increased and the books have gone red. Zombies.
This is a necessary cleansing that needs to happen.
Because printing paper money by government authorized central banks ultimately leads to spectacular waste, theft and distortions.
Ravi Aswal thats why we should use Bitcoin, there is a finite supply and governments cant just print it.
@@Truced Finite supply, but exponentially growing population, and you're telling me 'that's why' we should use Bitcoin? HAHA
Dude Trust Me see you in 2021
Going heavy into Gold
Invest 10% of your networth in Gold. Then if everything goes to hell you are protected. Oh and whiskey...lots of whiskey,
@@ericanderson3534 yummm
I feel like he really wants to sell me a shamwow.
⏰ 👀 =😆
Parts of the yield curve inverted months ago. For deeper analysis, see www.grufity.com/one-pager/daily-yield-curve
Line vs curve ....someone need to learn geometry
I love that this doesn’t mean shit to my bitcoin bags 💼
BS- get a 10 year Arm mortgage, gives you a lower interest rate most of the time.. you’re prob gonna sell it within ten years or pay a big chunk and just refinance at year ten. Fixed rates should only be bought if you get a really good rate otherwise no.
hahaha "it's not that bad" everyday the markets down 1 dam penny its bad but this will just play out???
Seems to be a buyers market...that can only mean one thing...almost time to sell.....And who is selling. Cashed up baby boomers...who is buying. No one mileniums dont have any cash.....
Calm down!!
Why Not Draw A Big Picture Of The Clown, Pennywise From IT...We All Float Down Here...Like A Giant Turd...Which Is Equivalent To The Current Financial System Today. Invert This!
Recession=Depression
You people are the worst! We are at a shtf moment
M. synyster85 it’s funny how the markets gonna bounce on Monday and prove you wrong 😁
@@Joe55348 if imarkets are good then why didn't the fed raise rates?
Joey S lol keep holding that illusion stocks are crap 💩 compared too forex and crypto trading and even gold lol 😂 that's how bad stocks sucks right now good thing I sold on October and now I'm just watching you guy suffer the next market cycle :)
And it's coming 22 trillion debt bubble can't sustain itself forever
@Molon Labe its coming prepare
Why don't we ever get a plunge in the CNBC gibberish?
Bonds, the Russell 2k and Gold are your current indicators. Pay attention. The rest is smoke and mirrors..
Cal Gaines I’m going short iwm after the bounce Monday
@@unchiekun I wouldn't count on a bounce, but it is in play for sure ..
Let's see how #BitcoinForPresident performs during a recession / bear market hyperinflationary environment. 🤯
It will perform in line with stocks.
Also I don't see Hyperinflation any time soon.
Modest inflation but not hyper
@@karlheven8328 well, considering Bitcoin has provided greater returns since 2015 than owning Berkshire Hathaway since 1995, even after falling from 2017 ATH, I expect that growth rate to increase in such a scenario. Reason being, it's what has happened in countries like Venezuela, Greece etc etc, North America will not be the exception! 🤫
Obviously this is just my opinion.
To each their own. 🙏