乐生活Yesterday, the U.S. Treasury yield curve upside-down deepened again. The spread between the two-year and 10-year Treasury yield curves expanded to 5.3 basis points, the deepest upside-down since the last financial crisis in March 2007. The spread between 10-year and 3-month Treasury bonds also broke through the recent low to negative 51.4 basis points.
Before the opening of the market, Barron Weekly published an article "Is the Recession Coming?" After the opening, Tom Digaloma, managing director of Seaport Global Holdings, a securities company, told FT Chinese. com that this was the last red light.
Unlike caution and disagreement at the beginning of the year, economic observers and analysts have become increasingly nervous about the global recession in the past month, and have come to agree that the recession is approaching.
If there is any disagreement, it is how fast and how deep the recession will continue in the future.
The upside-down of the yield curve is not the cause of the recession, but it has been used as a recession indicator. Generally speaking, the risk of holding long-term debt is higher, and the interest rate of long-term debt is higher than that of short-term debt. In turn, it means greater uncertainty. Historically, since 1970, there have been six inverted maturity spreads of U.S. Treasury bonds. After each inversion, the U.S. economy has fallen into a recession of varying degrees.
At present, the 10-year Treasury bond and the 3-month Treasury bond yields have been hanging upside down since May this year.
In January and February of this year, many investment institutions and economists only mildly believed that "economic growth will slow down". In January, ECB President Draghi warned that downside risks could pose a threat to the euro zone economy, while Bank of America’s Barnaby Martin, though sternly worded, was only cautious: a slowdown in money supply growth often heralds a weakening of global economic growth. More optimistic, Kewsong Lee, Carlyle’s co-CEO, said in February that despite the slowdown in global economic activity, there would be no recession in 2019.
By June, with the escalation of Sino-US trade conflict, pessimism spread rapidly. Morgan Stanley believes that investors underestimated the tension of the current situation. "If the trade situation continues to deteriorate, the global economy will fall into recession in nine months." The International Monetary Fund issued a similar warning: "Now is the delicate moment of the global economy, because many countries are already in a serious slowdown, crushing the camel’s last straw or imminent."
On Monday, Morgan Stanley’s chief economist wrote in more serious terms that trade barriers were close to the level at which the global economy entered recession. Bank of America recently conducted a survey of Wall Street asset managers, with more than a third expecting a global recession in the next 12 months.
Newtime, FT, Reuters, BBC and Bloomberg have all recently published articles on the global economic recession. "The overall global slowdown is worse than expected," the chief U.S. financial economist at the Oxford Institute of Economics said in an interview. Reuters quoted Seaport Global Holdings managing director as saying, "The interest rate market is seldom deceptive. Globally, the current market situation seems to be predicting the coming of the final judgment day."
From the historical experience of the past 40 years, there are two characteristics of US bond interest rate inversion and economic recession resonance. First, there are 6-24 months between actual recession and US bond interest rate inversion. The shortest time lag is 1989, and the longest time lag is the last financial crisis, followed by two full years.
Second, over the past 40 years, the U.S. economic recession has affected other countries more or less, but China has an independent market. Especially in 2008, in the wake of the financial crisis, China’s economy prides itself on the beautiful curve of overtaking in the world.
But this time, at the heart of the trade war, we may not be so lucky.
Bloomberg published an article this month entitled If There’s a Recession, It Will Be Made in China. The introduction is: The 30 years of rapid growth brought about by integration into the world economy is over.
Yes, we have had high growth in the past 30 years.
