Wall Street Red Flag: A Bond Market Indicator That Has Predicted Every Recession In The Last 50 Years Just Got Triggered

If the bond market is correct, the U.S. economy is definitely heading into a recession.  Over the past 50 years, there have been six previous occasions when the yield on three-month Treasury bonds has risen above the yield on ten-year Treasury bonds, and in each of those instances a recession has followed.  Now it has happened again, and this comes at a time when a whole host of other economic indicators are screaming that a recession is coming.  Of course we have seen recession indicators triggered at other times in recent years, and the Federal Reserve was able to intervene and successfully extend this cycle on multiple occasions.  But now that the global economy is clearly the weakest it has been since the last recession, have we finally reached a breaking point?

Many on Wall Street are taking what happened at the end of last week extremely seriously.  According to CNBC, we have not seen a yield curve inversion of this nature in 3,009 trading days…

Short-term government fixed income yields are now ahead of the longer part of the curve, delivering a strong recession indication that hasn’t happened since 2007.

The spread, or yield curve, between the 3-month and 10-year Treasury notes just broke the longest streak ever of being above 10 basis points, or 0.1 percentage point. The two maturities were last below that level in September 2007, a run of 3,009 trading days, according to Bespoke Investment Group.

3,009 trading days is a very, very long time.

And now we will see how inverted the curve becomes, because as Zero Hedge has aptly pointed out, the more inverted the curve become the “higher the odds of a recession”…

Why is the inversion of the 3 Month-10 Year curve – the first since 2007 – such a momentous occasion? Because not only is said inversion the most accurate recession leading indicator, having correctly “predicted” the last 6 recessions with no false positives, most recently inverting in 1989, in 2000 and in 2006, with recessions prompting starting in 1990, 2001 and 2008….

… it also feeds directly into every Wall Street recession model: the more inverted it is, the higher the odds of a recession.

To get an idea of what the models are currently showing, just check out this chart.  At this moment, the odds of another recession are the highest they have been since the last one.

Many investors were hoping that the bond market would have better news for us on Monday, but instead things got even worse…

On Friday, markets were spooked when the yield curve inverted, a reliable recession signal though usually not an immediate one. That means the rate on a lower duration instrument rose above a longer duration security’s yield. In this case, it was the yield on the 3-month bill, at 2.44 percent Monday, moving above the 10-year yield, which sank as low as 2.38 percent, a more than 2-year low.

I know that just about everybody in America is writing about the Mueller Report right now, and I just posted an article about it too, but the outcome of that investigation is not going to change the trajectory of the global economy.  It has been slowing down for quite some time, and that is the primary reason why we have seen an inversion of the yield curve…

“Yield curves are responding to what they see, to what I believe is a global economic slowdown,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “You don’t see this kind of move in curves, not just here but everywhere, unless you get one.”

Global central banks are already jumping into action, and I expect a tremendous amount of intervention as global economic conditions continue to deteriorate.

But there is only so much that they can do, and even though they have pulled a few rabbits out of the hat in recent years, at some point they are going to completely lose control.

Already, we are starting to see things happen that are very reminiscent of the last recession.  For example, we are on pace for the worst year for store closings in all of U.S. history, and another major retailer just announced that they will be closing all their stores…

LifeWay Christian Resources announced Wednesday that it will be closing all remaining 170 stores this year and focusing on online sales. Carol Pipes, director of corporate communications for LifeWay, posted the announcement on the company’s website, explaining that it was “a strategic shift of resources to a dynamic digital strategy.”

Communities all over America, especially the more economically-depressed ones, are going to start looking really bleak as the number of empty buildings continues to rise.  This is something that I have warned about for a long time, and now it is happening on a massive scale.

As I end this article, I once again want to mention a factor that is going to have an enormous impact on our economy throughout the rest of this year.  The flooding in the middle portion of the nation has destroyed thousands of farms, and the National Weather Service is warning that the flooding that we have seen so far is just “a preview of what we expect throughout the rest of the spring”.  This is already the worst flooding disaster for U.S. farmers in modern American history, and it is going to get much, much worse.

We are going to see another huge surge in farm bankruptcies, thousands of farmers will not be able to plant crops at all this year, food prices are going to rise dramatically, and a lot of families all over America are going to have a real problem making their food budgets stretch far enough.

There are so many factors hammering our economy right now.  If the Federal Reserve is able to pull another rabbit out of the hat this time, it will be nothing short of a major miracle.

We are literally at a critical tipping point, and it is not going to be easy to pull us back from the brink this time.

BMW, Mercedes-Benz lower prices in China after VAT drop

SHANGHAI: BMW AG and Mercedes-Benz said on Saturday they will lower their prices in China, after the government announced it will reduce the country's value-added tax (VAT) starting on April 1.

The German automobile companies each published posts on Chinese social media announcing immediate price cuts for several models. The discounts come as China endures a shrinking market for automobiles as the economy slows.

BMW said it would reduce prices for both domestically produced and imported models, including the locally-made BMW 3 series and BMW 5 series, along with the BMW X5 and BMW 7 import models. The BMW 320Li M model will sell for a suggested retail price of 339,800 yuan (US$50,620), a drop of 10,000 yuan from its original price.

The reductions mark the company's "active response to the national VAT adjustment notice," BMW said in a post on WeChat, China's popular messaging app.

Daimler AG-owned Mercedes-Benz announced similar price cuts on a range of its cars, also effective immediately, in advance of the upcoming VAT drop. The cuts shown on its social media page range from 10,000 yuan to 40,000 yuan on select models.

On March 5, Chinese Premier Li Keqiang announced that China will cut VAT across a range of industries, with the tax set to drop in the manufacturing sector from 16 percent to 13 percent and in the transport sector from 10 percent to 9 percent.

The carmakers' cuts come as China's automobile industry faces a major slowdown. In 2018, China's car market shrank 5.8 percent, marking its first contraction in over two decades.

Policymakers have introduced a range of policies to stimulate demand for cars. In January, China's National Development and Reform Commission (NDRC) said it would loosen restrictions on the second-hand car market and provide subsidies to boost purchases in rural areas.

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I am still thinking of the places to go for my Outdoor PS. I like sea and sky. I also like old buildings and also flowers ....

Here are some places which I tot of. Any comments?

1) Botanic Gardens/Japanese Garden
2) Changi Beach (any nice beach to recommend)
3) Shophouses at Chinatown (old style)
4) Reservoir

some of following locations u may consider:
1) botanic garden - got waterfall, pond, green field.....
2) Sentosa - orchid garden got a very nice chapel, famous hai zi shui, beach, old house...
3) Marina city park - green field, pond...
4) Changi - lalang field, beach.....
5) Kent Ridge park
6) temples at pickering street & cicil street
7) Peranakan Place at Somerset
8) Sportiswood park - shophouses
9) Railway station
10) Labrador park - sunset
11) SAM

Japanese garden nothing much to take, don waste money go there take. My fren told me the photo turn out not really impressive. He told me must choose colorful background den the photo will turn out nice.

Oslo: Charging electric cars no longer free of charge

Electric car drivers in the capital of Norway must now pay for charging. Oslo has started the conversion of about 1,300 public charging points in the city to be able to charge a fee. The aim is not so much to cash in but to keep EVs from parking for free without charging.

Starting immediately, Oslo will charge ten crowns (approx. 1 euro) per hour during the day and five NOK per hour at night. At the same time, there are also plans to increase the number of charging stations to 2,000 by the end of the year.

Christina Bu of Norway’s electric car association, Norsk Elbilforening, has welcomed the step. She told the Norwegian Aftenposten that “we need to ensure rotation and that people only park at charging stations when they’re charging”.

With EV charging infrastructure lacking behind actual sales of electric cars, charging is increasingly becoming a problem, particularly in densely populated urban areas. We hear reports of incidences of electric car drivers using the free parking opportunity at a charge column without charging from people in various markets.

The (luxury) problem may further intensify as more and more electric car clubs go live. 250 Renault Zoe have just been made available in Oslo this winter, and while the new service is supposed to help alleviate public transport and supported by train operator NSB, these EVs will have to charge as well.

In Norway, almost every second vehicle registered is currently an EV. According to this CAM study, the market percentage of electric vehicles in Norway in the first three quarters of 2018 climbed from 37% to 46.7% compared to the previous year. From a European perspective and counting only passenger electric cars, Norway continues to be miles ahead of its neighbouring countries. The country had an EV share of 31,2% in 2018 according to this count.