- the source for market opinions


August 20, 2023 | Credit Crisis: Curve and Spreads: Both Now Warning

Bob Hoye has been in investment business for some 50 years, making him one of the more experienced researchers. His historical work has been thorough providing the first recognition of the fascinating transition from speculation in commodities to speculation in financial assets. It was controversial when Bob observed that “No matter how much the Fed prints, stocks will outperform commodities”. In January 2000, the research team concluded that the Dot-Com Bubble would peak in March 2000. In early 2007, the team outlined that the credit markets would reverse in May-June 2007. They did and the stock market followed. The latest was the call in early October for the Bitcoin Bubble to complete in December. Bob’s essays and speeches on political change and on actual climate change have been widely circulated.

In March the Yield Curve inverted as short rates rose above long rates. We use the 2s to 20s and the inversion has always been followed by a recession, without exception. The warning becomes more acute as the Curve reverses, which it is doing now. A slowing economy reduces the ability to service debt with over-exposed banks and speculators facing increasing difficulty in meeting obligations. Rating agencies start to downgrade debt.

Download (PDF, 155KB)

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the Weekly Recap.

August 20th, 2023

Posted In: Charts and Markets - Bob Hoye

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site


This site uses Akismet to reduce spam. Learn how your comment data is processed.