I pay pretty close attention to the treasury spreads. Economists can read the spreads several different ways, but when they go negative, I think that intuitively signals concern in the short-term nonetheless. Given that the yield curve has narrowed significantly, despite general positive economic news recently, I am curious if anyone has insight into any key issues flying under the radar. May sound like a stupid question, but it was crazy interesting to read some hypotheses on WSO before the Great Recession. I know the spreads are not negative yet, and even if they turned negative, a recession could be a few years out, but I have to believe the curve will narrow further, and this vodka is inspiring awe..
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What your favorite non-technical indicators?
I've noticed a lot of people on my social media feeds taking risks they wouldn't normally take lately, such as leaving great jobs to travel the world aimlessly for a while or buying rental real estate to "flip" even though they know little/nothing about real estate.
I'm not knocking them for these things (I've taken some seriously inordinate risks in my lifetime) but my mind recognizes it as "late cycle behavior." It suggests that more Americans are feeling pretty untouchable...which is often how we feel shortly before we get touched.
"It suggests that more Americans are feeling pretty untouchable...which is often how we feel shortly before we get touched."
You could just be noticing it now that you are looking for it. That is usually how it works. much like this video.
Well, I definitely do not want a recession to happen now. I just passed my CFA Level III exam and I'm trying to complete the transition from an audit/CPA background to asset management. The last thing I want is a recession. Of course, just because I don't want a recession doesn't mean I'm not overly paranoid and/or fearful of one right now (I probably am) and that could affect my judgement.
For what it's worth, I caught two of the three issues in the video, and I'd never seen it before and wasn't expecting either. I missed the change in scenery.
RobberBaron123 No doubt you need advanced statistical knowledge for more complicated / interesting aspects of economics. But I meant in regards to you learning / looking at finance papers - granted there may be an issue here with the credibility of the test in the sense you wouldn't be able to re-do the test yourself. However, other than academics or researchers at funds which I assume neither of us are, especially when we dont have access to the same data it is impossible for us to re-do the test.
Or are you saying that you wish you had the statistical knowledge to write research papers yourself?
I personally prefer the practitioner way of doing things, let me calculate a companies beta using CAPM than factor analysis any day.
Quick and dirty is how I like it - being roughly right is better than precisely wrong!
Have you ever looked at using advanced econometrics to calculate a more accurate leverage for option pricing? Thats what I am currently looking at but as interesting as it is, im not convinced it adds much in terms of incremental value although I would like to hear others thoughts on this!
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