July 10, 2023 • 6 mins
Joe breaks down the inverted yield curve, some economy talk and partying during the 4th of July break.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I found this interesting. The American Institute for Economic Research
is writing about the inverted yield curve. Do you remember
the inverted yield curve. Here's your simple explanation of it. Normally,
if somebody says, hey, I want to use your money
for a long time, they got to pay you more
than if they say, hey, I want to use your
(00:22):
money for a few days, because they're going to have
it for a longer time and you won't have the
benefit of investing in et cetera, et cetera. Well, an
inverted yield curve happens when short term bonds are paying
more than long term bonds. I'm sorry, yeah, that's right,
because people are thinking, uh, yeah, if you got my
(00:44):
money for the long term, that's fine because the economy
is about to stink. Oh short term you can. You're
gonna have to pay me for it because now is
when the opportunity is. I hope that was more or
less understandable. I understand it. Most people can. So the
yield the inverted yield curves since the nineteen sixties has
predicted all eight US recessions, Beginning roughly a year after
(01:06):
it gets funky and inverted and the Yield's forecasting record
since nineteen sixty eight has been perfect. Not only has
each inversion been followed by a recession, but no recession
has occurred in the absence of a prior yield inversion. Okay,
there's even a stronger correlation. I'm quoting again from the Aier,
(01:27):
a stronger correlation between the initial duration and depth of
the curve inversion and the subsequent length and depth of
the reception recession. The current inversion will likely be long
and deep. Oh boy, I don't want that. But not
to be.
Speaker 2 (01:42):
Cynical just for the sake of being cynical. But if
I'm one hundred percent sure right at this moment there's
a recession coming, what should I do as an individual?
Speaker 1 (01:51):
Perhaps not spend like a lunatic?
Speaker 2 (01:53):
Wow, yeah, well that seems like I just did, by
the way, for eight days, nine days, because we're on
vacation and money doesn't count when you're on vacation. So
I didn't just spend like a lunatic. I didn't until
last night start totaling up hotels, driving two thousand miles, flights,
variety of things, eating, what I.
Speaker 1 (02:12):
Spent, how much I spent like a comfortably middle class man.
I drank like a lunatic, and we've had a long
talk with ourselves and our back on the run. You know.
The Old ninety seven is one of my all time
favorite rock and roll bands has a song called every
Night is Friday Night. That was like nine days in
(02:34):
a row. And no, no, certainly not at my age. No, no,
my body and my brain revolted and said we're leaving
if you don't stop it.
Speaker 2 (02:44):
It's like when my gallbladder leaped out of my body
because I couldn't take it anymore. So did you weigh
yourself today? We were going to see who game the
most weight? Did you weigh yourself today? I forgot?
Speaker 1 (02:55):
Man, do we still have a scale in the office? Ah?
Speaker 2 (02:58):
Yes, all right, mom, up a pound and a half.
Speaker 1 (03:02):
Although no that doesn't count because I've had my water
and my coffee, my peanut butter and jelly sandwich in
the rest of the day. So anyway, back to the economy,
they're thinking.
Speaker 2 (03:10):
Talk about the economy, you idiots.
Speaker 1 (03:14):
Yeah, it's uh oh, Back to your question. I would
say that a fair amount of caution might be warranted
on an individual basis, But as we pointed out through
the years, you are not the economy. There are many
businesses that do wonderfully well during recessions. Just on the average,
the economy shrinks a little bit for a little while,
(03:36):
and then it grows more.
Speaker 2 (03:38):
Sat at a restaurant yesterday for a full there for
like two hours waiting plenty open tables, couldn't sit it
in them because they didn't have enough weight staff. When
I finally sat, waited for like an hour because they
got like one cook, and just continues to be as
I drove halfway across the country and back. Help wanted
(04:00):
signs everywhere. That's the biggest confusing part of our entire
economy for me. How we can have We have the
lowest unemployment rate pretty much ever. We have the largest
number raw number of out of work people of working
age ever. Yeah, and help wanted signs everywhere. I don't
know how those things fit together. I just doesn't make
(04:22):
any sense to me.
Speaker 1 (04:23):
Judy and I spent a fair amount of quality time
on our nation's interstate highways, and two things jumped out.
Number one, every single truck and company is desperately trying
to tire. Oh yeah, billboards everywhere, signs everywhere, Well, in
every truck. It makes six figures, will train you. Yeah,
we treat our drivers with love and dignity and blah
blah blah. And the second thing was all the highways
(04:44):
were jammed like crazy in both directions, both heading out
and coming back. We need to make a pact as
a country. Let's just all stay home. You're going, You're
going where I live, I'm going where you live? Why why?
I know, A change of scene, but it was we
(05:05):
were stopped multiple times on interstate highways just sitting there.
Almost could have gotten out to urinate at one point.
It was just oh and inexplicable too. Usually, oh, sometimes
you'd see a wreck, you'd think, oh my god, I
hope everybody's okay. Usually you just slow down. You'd pudd
along for fifteen minutes, then driving in and it was
completely inexplicable what had happened.
Speaker 2 (05:25):
We did that in the middle of Arizona, I think,
past Yuma, where there ain't nobody, there's not no life
of what any one of my kids said, I know,
I can jump out, pee and catch up to you
and get back in the car. Can I do that?
Because we're moving so slow?
Speaker 1 (05:40):
Yeah, yeah, sounds kind of exciting. To me, although you
got to stay calm enough that well, you know, and
then you'd have to well anyho, you'd figure anything. So anyway,
I mean I could, yeah, I could be labored the thing.
But there's a pretty there's a better than decent chance
that there's a recession coming, and you know, we'll.
Speaker 2 (05:57):
Deal with So the smartest moneyed people our betting on
the fact that there's going to be a recession. It
would seem yeah, yeah, absolutely, Okay, Well I'll plan accordingly.
Well I should have planned accordingly before vacation, but it's
too late now. Now I'll just pay off my credit
card bill
I found this interesting. The American Institute for Economic Research
is writing about the inverted yield curve. Do you remember
the inverted yield curve. Here's your simple explanation of it. Normally,
if somebody says, hey, I want to use your money
for a long time, they got to pay you more
than if they say, hey, I want to use your
(00:22):
money for a few days, because they're going to have
it for a longer time and you won't have the
benefit of investing in et cetera, et cetera. Well, an
inverted yield curve happens when short term bonds are paying
more than long term bonds. I'm sorry, yeah, that's right,
because people are thinking, uh, yeah, if you got my
(00:44):
money for the long term, that's fine because the economy
is about to stink. Oh short term you can. You're
gonna have to pay me for it because now is
when the opportunity is. I hope that was more or
less understandable. I understand it. Most people can. So the
yield the inverted yield curves since the nineteen sixties has
predicted all eight US recessions, Beginning roughly a year after
(01:06):
it gets funky and inverted and the Yield's forecasting record
since nineteen sixty eight has been perfect. Not only has
each inversion been followed by a recession, but no recession
has occurred in the absence of a prior yield inversion. Okay,
there's even a stronger correlation. I'm quoting again from the Aier,
(01:27):
a stronger correlation between the initial duration and depth of
the curve inversion and the subsequent length and depth of
the reception recession. The current inversion will likely be long
and deep. Oh boy, I don't want that. But not
to be.
Speaker 2 (01:42):
Cynical just for the sake of being cynical. But if
I'm one hundred percent sure right at this moment there's
a recession coming, what should I do as an individual?
Speaker 1 (01:51):
Perhaps not spend like a lunatic?
Speaker 2 (01:53):
Wow, yeah, well that seems like I just did, by
the way, for eight days, nine days, because we're on
vacation and money doesn't count when you're on vacation. So
I didn't just spend like a lunatic. I didn't until
last night start totaling up hotels, driving two thousand miles, flights,
variety of things, eating, what I.
Speaker 1 (02:12):
Spent, how much I spent like a comfortably middle class man.
I drank like a lunatic, and we've had a long
talk with ourselves and our back on the run. You know.
The Old ninety seven is one of my all time
favorite rock and roll bands has a song called every
Night is Friday Night. That was like nine days in
(02:34):
a row. And no, no, certainly not at my age. No, no,
my body and my brain revolted and said we're leaving
if you don't stop it.
Speaker 2 (02:44):
It's like when my gallbladder leaped out of my body
because I couldn't take it anymore. So did you weigh
yourself today? We were going to see who game the
most weight? Did you weigh yourself today? I forgot?
Speaker 1 (02:55):
Man, do we still have a scale in the office? Ah?
Speaker 2 (02:58):
Yes, all right, mom, up a pound and a half.
Speaker 1 (03:02):
Although no that doesn't count because I've had my water
and my coffee, my peanut butter and jelly sandwich in
the rest of the day. So anyway, back to the economy,
they're thinking.
Speaker 2 (03:10):
Talk about the economy, you idiots.
Speaker 1 (03:14):
Yeah, it's uh oh, Back to your question. I would
say that a fair amount of caution might be warranted
on an individual basis, But as we pointed out through
the years, you are not the economy. There are many
businesses that do wonderfully well during recessions. Just on the average,
the economy shrinks a little bit for a little while,
(03:36):
and then it grows more.
Speaker 2 (03:38):
Sat at a restaurant yesterday for a full there for
like two hours waiting plenty open tables, couldn't sit it
in them because they didn't have enough weight staff. When
I finally sat, waited for like an hour because they
got like one cook, and just continues to be as
I drove halfway across the country and back. Help wanted
(04:00):
signs everywhere. That's the biggest confusing part of our entire
economy for me. How we can have We have the
lowest unemployment rate pretty much ever. We have the largest
number raw number of out of work people of working
age ever. Yeah, and help wanted signs everywhere. I don't
know how those things fit together. I just doesn't make
(04:22):
any sense to me.
Speaker 1 (04:23):
Judy and I spent a fair amount of quality time
on our nation's interstate highways, and two things jumped out.
Number one, every single truck and company is desperately trying
to tire. Oh yeah, billboards everywhere, signs everywhere, Well, in
every truck. It makes six figures, will train you. Yeah,
we treat our drivers with love and dignity and blah
blah blah. And the second thing was all the highways
(04:44):
were jammed like crazy in both directions, both heading out
and coming back. We need to make a pact as
a country. Let's just all stay home. You're going, You're
going where I live, I'm going where you live? Why why?
I know, A change of scene, but it was we
(05:05):
were stopped multiple times on interstate highways just sitting there.
Almost could have gotten out to urinate at one point.
It was just oh and inexplicable too. Usually, oh, sometimes
you'd see a wreck, you'd think, oh my god, I
hope everybody's okay. Usually you just slow down. You'd pudd
along for fifteen minutes, then driving in and it was
completely inexplicable what had happened.
Speaker 2 (05:25):
We did that in the middle of Arizona, I think,
past Yuma, where there ain't nobody, there's not no life
of what any one of my kids said, I know,
I can jump out, pee and catch up to you
and get back in the car. Can I do that?
Because we're moving so slow?
Speaker 1 (05:40):
Yeah, yeah, sounds kind of exciting. To me, although you
got to stay calm enough that well, you know, and
then you'd have to well anyho, you'd figure anything. So anyway,
I mean I could, yeah, I could be labored the thing.
But there's a pretty there's a better than decent chance
that there's a recession coming, and you know, we'll.
Speaker 2 (05:57):
Deal with So the smartest moneyed people our betting on
the fact that there's going to be a recession. It
would seem yeah, yeah, absolutely, Okay, Well I'll plan accordingly.
Well I should have planned accordingly before vacation, but it's
too late now. Now I'll just pay off my credit
card bill
Hosts And Creators
Joe Getty
Jack Armstrong