This Chart Has Predicted The Last Three Recessions

Inverted yield curves have predicted the last three major recessions. Now, the yield curve is inching closer to the same low level of the 2008 recession. Cheddar explains what an inverted yield curve is -- and what it means for our economic future.

Connect with Cheddar!

#economics #recession #yieldcurve

[ianng]

That’s not a prediction that’s an indication, when you don’t think the gov can pay back eminently we all know that trouble is already here

[kabukiwookie]

That's an indicator not a predictor. There are alot of other things happening in the economy, and other world economies that when looked at as a whole, are not pointing to good times ahead.

[MohammadIshfaqueJahanRafee]

I liked the statement, it's not whether a recession will happen, the question is when. In a bull market, people generally forget that

[abqmalenurse]

Inverted yield, stock market dropping, tens of thousands of layoffs, bankruptcies, jobs, other countries selling off US Treasuries, preponderance of low wage jobs, loss of job benefits over decades, interest rates rising but not high enough to decrease for positive effect, greatest concentration of wealth at the top in history....
Hmm, maybe the jury is still out?

[AKIPOPOPOPOOON]

Predicting a recession in 2019 or 2020 because the yield curve is only around 12 basis points (0.12) away from an inversion, and once that happens, there's no going back

[Pyrrhic.]

Main stream media now a days reports on things that they have no idea what it’s about. Many YouTube news explains things better than them.

[Phlegethon]

The professor "oh it's never been wrong in the last 20 years in THREE recessions"....the expert " it's never wrong, oh except that one time out of 5 or seems like its wrong a fucking lot on your small sample sizes.

[ederjuniorchua]

I have a crush on this episode's host

[yoimosan]

Every time her voices goes low and gravelly, I fall in love again 🥰

[veselinboyadzhiev]

It is really strange that when there is a republican "fiscally responsible" president there is always a recession.

[kiratokento]

It's official - the yield curve has been inverted for a full quarter.

[markeyboi]

The Fed Reserve (which is independent from the government btw) keeps raising interest rates because "the economy is good" which is the problem.

[nicholaslacourse]

As an actual economist (PhD) this is not a prediction, but rather a very simple indicator. If anyone wants a better understanding of recession behavior and predictability I suggest reading some work by Minsky and looking at what is known as the Minsky Moment Process. Also, some theoretical work by Hu. Unfortunately, the model is quite large and it also quite complex theoretically speaking so it might not be everyone's forte simply due to the lack of prior knowledge and understanding. P.S. I am not a macroeconomist by discipline so I am sure there are other big authors I am forgetting. Game Theory and Market Design are my fields.

[funny-video-YouTube-channel]

*Yes, it's logical. The current world economy* is dominated by credit and mortgage repayments.
Loan repayments is a good indicator for how much money people are able to earn and repay in the current economy. If loan repayments sink, then the economy is also sinking, otherwise people would repay the loans.

The banks trade loan contracts like liquid assets between themselves.
If our economy was based on potato, then the potato production would be a good indicator.

[kosmichnyi]

Why The Stranger from The Big Lebowski says about a new recession? :D

[JohnDoe]

Lehman Brothers has filed for bankruptcy. The 2008 market crash. 😱😱😱😱😱

[zerotoux]

Price is the main indicator. The yield curve is a self-fulfilling prophecy. Even if it's not the real indicator, the more we keep talking about it and obsessing over it, the more we behave in making it come true.

[jaridkeen]

Funny that each Rescission corresponds with when Republicans are in office, and a Republican also caused the Great Depression...

[AzarroFineArts]

I go with the public can buy and how much. And what I see is less and less people can buy what they want and buy what they need. People are having a hard time buying what they need right now. So I believe a recession is very soon. I give 70% chance that we are in a recession this time next year.

[gus]

👍Good explainer! 📉↘️🤔 GREAT moustache! Thanks Cheddar! 😎