Loading ...I love these ‘non-calls’ like Ray Dalio’s 40% odds for a recession. We get one, he called it. We don’t, he called it. Akin to ‘sort of being pregnant’ if you catch my drift.
We just saw first-hand the ‘pushing on a string’ theme coming to fruition. Mortgage rates down nearly 100 bps since the beginning of the year and yet single-family housing starts have plunged at an 18% annual rate.
Hey, if you don’t like the yield curve as a recession gauge, how about the -5.9% YoY trend in the Cass Freight Index, the -9.7% plunge in Port of Long Beach cargo traffic and the 3.9% slide in US railway carloadings?
Major reason for meltdown in bond yields? We’re back in a deep global savings glut. When investment falls short of savings, rates fall. It’s that simple. And the rising level of uncertainty, on trade and other matters too, has caused capex worldwide to retreat.