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-   -   How far will bonds go? (http://archives1.twoplustwo.com/showthread.php?t=557298)

SenatorKevin 11-29-2007 03:32 PM

How far will bonds go?
 
For those that are very familiar with the bond market, what's your take on the current bond run? Do you think if the economy sags in `08 that we have a legitimate shot of hitting the yields seen right before the Iraq war started?

NajdorfDefense 11-29-2007 04:26 PM

Re: How far will bonds go?
 
yes

PRE 11-29-2007 07:52 PM

Re: How far will bonds go?
 
U.S. has a 95% chance of hitting a recession within the next two quarters IMO. Bond markets are doing a much better job of pricing this in than the equity markets.

DcifrThs 11-29-2007 08:01 PM

Re: How far will bonds go?
 
[ QUOTE ]
U.S. has a 95% chance of hitting a recession within the next two quarters IMO. Bond markets are doing a much better job of pricing this in than the equity markets.

[/ QUOTE ]

define recession.

Barron

smbruin22 11-29-2007 08:09 PM

Re: How far will bonds go?
 
recession has a very specific meaning. i think it's two quarters of negative year over year real GNP growth.

recession definition is basically a point.... i think better question is major recession, although not sure that many economists are even calling for recession yet.

check out michael rosenburg from merrill lynch. he's been very pessimistic for quite awhile... i think hoisington is all over very low rates.. i think pimco too, but not certain of that.

SenatorKevin 11-29-2007 08:20 PM

Re: How far will bonds go?
 
95% in the next two quarters? Seems a little early. I'd say Q3 of `08 would be more likely due to the massive number of subprime loans coming up for reset in Q1/Q2.

DcifrThs 11-29-2007 08:52 PM

Re: How far will bonds go?
 
Pre,

please define recession so i can make a wager with you regarding your assessment of the probabilities.

thanks,
Barron

PRE 11-29-2007 10:19 PM

Re: How far will bonds go?
 
Barron,

I'm referring to the official definition, something of which we wouldn't know for sure until a couple of years down the road (as you know). I was considering creating a post as to why I think the odds of a recession at this point are 95% (I said within the next two quarters for theatrics to be honest, but I do still believe there'sd a 50% chance of one hitting that soon).

I find it hard to believe how any rational person at this point cannot see the odds of a recession occurring over the next 12 months as being at least 50%. I'm basing my opinion on an extensive amount of research and would be willing to argue with anyone who believes the other side of the argument to be true.

Edit: As for a wager, something small and friendly would be fine (I'll make a shorter-term bet such as the Dow losing at least 20% of its value over the next 12 months). I'm currently making a big bet through my investments, so anything big would be risky.

DcifrThs 11-29-2007 10:31 PM

Re: How far will bonds go?
 
[ QUOTE ]
Barron,

I'm referring to the official definition, something of which we wouldn't know for sure until a couple of years down the road (as you know). I was considering creating a post as to why I think the odds of a recession at this point are 95% (I said within the next two quarters for theatrics to be honest, but I do still believe there'sd a 50% chance of one hitting that soon).

I find it hard to believe how any rational person at this point cannot see the odds of a recession occurring over the next 12 months as being at least 50%. I'm basing my opinion on an extensive amount of research and would be willing to argue with anyone who believes the other side of the argument to be true.

Edit: As for a wager, something small and friendly would be fine (I'll make a shorter-term bet such as the Dow losing at least 20% of its value over the next 12 months). I'm currently making a big bet through my investments, so anything big would be risky.

[/ QUOTE ]

thats fine. i was willing to take all action against 95% chance of a recession in the next 2 quarters.

i strongly feel that we'll head towards negative growth, though may not hit it. i've done a ton of research as i'm sure you know as well and the major factors just come down to what degree spending will fall given housing price falls and to what degree housing prices fall.

exports are 12% of GDP so 50% growth there is not enough to matter more than offsetting a 6% or so fall in spending. anything more and exports will fail to compensate.

so while i know all the logic behind a recession, i don't see one happening that soon and thus will take all action against it in the next 2 quarters.

Barron

Jimbo 11-30-2007 02:04 PM

Re: How far will bonds go?
 
[ QUOTE ]
[ QUOTE ]
U.S. has a 95% chance of hitting a recession within the next two quarters IMO. Bond markets are doing a much better job of pricing this in than the equity markets.

[/ QUOTE ]

define recession.

Barron

[/ QUOTE ]

The National Bureau of Economic Research is accepted as the official government determination of when a recession occurs. It is normally (but not always) two consecutive quarters of decline in real GDP. They do take other factors into consideration.

Recessions

Jimbo

DcifrThs 11-30-2007 02:26 PM

Re: How far will bonds go?
 
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
U.S. has a 95% chance of hitting a recession within the next two quarters IMO. Bond markets are doing a much better job of pricing this in than the equity markets.

[/ QUOTE ]

define recession.

Barron

[/ QUOTE ]

The National Bureau of Economic Research is accepted as the official government determination of when a recession occurs. It is normally (but not always) two consecutive quarters of decline in real GDP. They do take other factors into consideration.

Recessions

Jimbo

[/ QUOTE ]

I wanted to get PRE's definition of recession...for betting purposes.

Barron

Jimbo 11-30-2007 02:31 PM

Re: How far will bonds go?
 
[ QUOTE ]
I wanted to get PRE's definition of recession...for betting purposes.

Barron


[/ QUOTE ]

I understood that, but then you would need his definition of "real GDP" vs GDP and then another definition, then another. I thought it might help to agree on the generally accepted agency that defines the past economic climate clearly, concisely and consistently.

Jimbo

DcifrThs 11-30-2007 02:45 PM

Re: How far will bonds go?
 
[ QUOTE ]
Barron,

I'm referring to the official definition, something of which we wouldn't know for sure until a couple of years down the road (as you know). I was considering creating a post as to why I think the odds of a recession at this point are 95% (I said within the next two quarters for theatrics to be honest, but I do still believe there'sd a 50% chance of one hitting that soon).

I find it hard to believe how any rational person at this point cannot see the odds of a recession occurring over the next 12 months as being at least 50%. I'm basing my opinion on an extensive amount of research and would be willing to argue with anyone who believes the other side of the argument to be true.

Edit: As for a wager, something small and friendly would be fine (I'll make a shorter-term bet such as the Dow losing at least 20% of its value over the next 12 months). I'm currently making a big bet through my investments, so anything big would be risky.

[/ QUOTE ]
i'd rather bet directly on the recession.

can we peg the recession indicator to 2 consecutive quarters of negative real GDP growth in the next X quarters where you pick X?

1:1 on the bet?

so far i'm about to be 0/1 on bets in this forum. i have 3 total outstanding (2 w/ gonebroke2 and 1 2/ Mr.Now which i'm about to lose) so i'm happy to take on more "2p2" exposure as it were [img]/images/graemlins/smile.gif[/img]

lemme know your thoughts.
Barron

JordanIB 11-30-2007 04:48 PM

Re: How far will bonds go?
 
Paging RedBean ---




Whoops, never mind...

Preem 12-01-2007 05:18 AM

Re: How far will bonds go?
 
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
U.S. has a 95% chance of hitting a recession within the next two quarters IMO. Bond markets are doing a much better job of pricing this in than the equity markets.

[/ QUOTE ]
define recession.

Barron

[/ QUOTE ]
The National Bureau of Economic Research is accepted as the official government determination of when a recession occurs. It is normally (but not always) two consecutive quarters of decline in real GDP. They do take other factors into consideration.
Recessions

Jimbo

[/ QUOTE ]
The interesting thing about recessions is that we don't know about them until after they have happened because it takes a while to gather GDP data.

Another interesting thing about recessions is that the media periodically polls the public, "Do you think we're in a recession?"

Recessions are pretty cut and dried and are not the result of a popular vote.


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