hydespo

hydespo

The iShares 20 Plus Year Treasury Bond ETF (TLT) tracks the prices of 20+ year duration bonds and generally moves inversely to the 20/30 year Treasury yield. Because it gains when yields fall, it is one of the few assets that are guaranteed to appreciate during a hardcore recession or crash which warrants emergency rate cuts by the Federal Reserve. The last two...

hydespo

Any kind of spread inversion, whether it's the 3mo-30Y or 2Y-10Y is simple in principle: you will get paid more for shorter duration bonds compared to longer duration bonds. This is opposite to what normally happens, hence the term inversion. Shorter maturity (<<10Y) bonds react more to Fed policy. Longer maturity (>=10Y) reflect long-term expectations of...

hydespo

Looking at times of house price slowdown and drawdowns in the last few decades as a function of interest rates and rate of house builds.

hydespo

I took the Great Financial Crash and copy pasted it aligning it with the S&P ATH. I kept the % drawdown the same, and it aligned with the COVID bottom by coincidence. Not a prediction in any way, shape or form. But it's an interesting exercise to visualise how the drawdowns and the timing worked out then.

hydespo

The last three major crashes and recessions have been preceded by a period of interest rate hikes by the Fed. Each hike since the 1970s has gotten less and less far before the economy rolled over, calling for an emergency rate cut. There are many reasons for this, including the deflationary impact of demographics and globalisation, as well as the ever increasing...

hydespo

Each of the last three major crashes was preceded with a yield curve inversion and a rapid decline in heavy truck sales. The transport sector, especially truck sales, are intimately correlated with economic activity and are widely regarded as a leading indicator of the health of the economy. One of the first things that happens when things slow down is businesses...