Emma Riordan’s Post

Recession worries (like 2023) make investors nervous. Here's a driving school lesson on dodging deer that can make you a superior investor the next time experts scream about a looming recession. #keystotheinvestingcastle #dodgingdeer #recession #predictions

When Once in a Century Events Happen Every Day. Over the past few years, we have seen numerous “once in a century” events. The pandemic. The longest secular bull market in history. The shortest about-turn from bull to bear in history (Feb. 19, 2020). The shortest recession in history (the 2020 pandemic). The U.S. credit was downgraded by Fitch Ratings (to AA+) on August 1, 2023. The Federal Reserve Board hiked interest rates to 5¼ to 5½  percent for the quickest tightening cycle seen since Federal Reserve Board Chairman Paul Volcker in 1979. (The Fed Fund rate was zero in March 2022.)   The Great Recession’s (2008) very name harkens back to the Great Depression (1929). 4 banks failed again this year. How do we budget in a world that doesn’t add up? (Click to access Natalie Pace’s free 12-part Budgeting and Adulting videoconference series.)  https://lnkd.in/gMXyww7H How do we invest when stocks soar and then crash? How do we protect ourselves from bank failures and bond losses? Learn more about a time-proven 21st Century strategy and mindset in our new blog.  https://lnkd.in/g-W_bGPw #investing #retirement #stocks #bonds #banks #budgeting #inflation #interestrates #housing #nataliepace #debt WallStreetBets™ MoneyShow The Wall Street Journal Forbes CNBC

From Iowa to New York, this week's winter weather events have brought record low temperatures and wind chill advisories. As Raymond James' Chief Investment Officer Larry Adam notes, "the bond market is going through its own version of a cold snap." Cooling optimism over near-term rate cuts have dented sentiment and pushed Treasury yields higher- with the 10-year Treasury yield rising back to 4.16% after reaching a low of 3.79% in late December. The good news, shares Larry Adam, both cold snaps aren't expected to last. Read Raymond James' Weekly Headings economic analysis: https://lnkd.in/dn3ZE4tc

I’d rather be pessimistic AND right, than optimistic AND wrong… With the vibe of a new year floating around, the #Fed signaling rate cuts as Powell attempts to manufacture the ever elusive soft landing, and everyone (and their mother) hoping for a better tomorrow in the #capitalmarkets it makes it easy to get drunk on all the wishful thinking. I’m doing my best not to drink the “koolaid”….even if I want to. We are simply not out of the woods yet. Real estate has always lagged. It’s what most of us complained about as the Fed continued to hike rates. Not to mention, you can reference the time it took (+12 months) for the medicine to make its way through the system and start showing effects. It’s argued often that the full effects of each hike are felt between 12-18 months thereafter. Full disclosure, I’m in that camp. In addition to the lagging effect, the degree of those effects caused by #monetarypolicy are yet to reach their peak. I don’t want to be the Debby Downer on our New Year’s Parade, but I especially don’t want my fellow sailors to get drunk on the “koolaid” while rough seas and rogue waves remain a legitimate, and arguably high probability, risk. As Jim Collins would say, just focus on your 20 mile march and make sure your team is “built to last.” #jimcollins #inflation #interestrates #multifamily #realestate #btr #bfr #buildtorent #buildforrent Southern Waters Capital

“I can’t wait for the next recession so that prices come down and I can snap up deals” Whether or not you’re openly admitting this, I know you’re thinking it. Every investor, new or seasoned has wished that there were more reasonably priced deals out there. Here’s my question for you…. What makes you think that prices will come down the way you want them to when/if a housing recession hits? If every investor is thinking the same thing, then guess what? 💯 You’re going to be competing with those investors (many who have ample access to cash) during a recession. The big, well-connected guys snap up deals that never see the light of day. And the small to midsize investors fight over the scraps. 🔥 This is why you’ve got to have a strategy for finding those diamond-in-the-rough deals no matter what the market is doing. THAT is how you gain a competitive edge, and keep the profits flowing, even in a frothy market. This week I’ll be sharing some tips for how I find great deals in any market. Are you buying in this current market? 👇👇 Share your story in the comments below!

An interesting chart included in this morning's edition of the The Wall Street Journal's Markets A.M. summary. Looking back over the five previous rate hiking cycles, it took an average of 7.8 months for the Fed to move the overnight rate. If history is any indicator that sets us up for the first rate cut coming during their March 20th meeting. #interestrates #federalreserve

Bull or bear steepening - that is the question #FederalReserve chair Jerome Powell’s recent #JacksonHole speech made clear that the uncertainty surrounding the economic situation in the United States is pervasive, and the path of the yield curve, and more generally the financial markets, depends on it. Currently, we are witnessing one of the strongest inversions of the curve in 50 years. How will this situation normalise? While we are convinced that a #steepening phase is likely to occur, it is important to question its nature – are we looking at a potential ‘bull’ or ‘bear’ steepening? The figure below shows the evolution of the US #yield curve through the proxy of the #spread between 10-year and 2-year rates. When the curve rises, it is steepening. There are two ways this transpires: - When 10-year yields rise: this is known as ‘bear steepening’, because it signals a bear market for long-maturity bonds - When 2-year yields fall: this is known as a ‘bull steepening’, since it supports a bull market in short-maturity bonds #Bullsteepening periods are more common than #bearsteepening episodes. The former has occurred 27% of the time in the last 45 years, while the latter took up 22%. - Typical bull-steepening periods were: 1990-1992, 2001, 2003, 2008 and 2020, and all were #recession periods. - The bear-steepening stretches were: 1984, 1987, 1996, 1999, 2010, 2013, 2016 and 2021, and, by and large, were marked by unexpected #inflation. These are two radically different situations: when fixed income PMs play on steepening positions, the matching equity position is radically different wheter you expect a bull or a bear steepening. Read more of what Philipp Burckhardt, CFA, Pascal Menges and I think of this question on Lombard Odier Investment Managers's website here: https://lnkd.in/dEpe5XZ7 #investment #inflation #fed #ecb #nowcasting #quant #systematicinvesting #GDP #macro #econometrics #macroquant #hardlanding #centralbank #multiasset #economics #economy 

Source: Bloomberg #Research Whether you look at Goldman Sachs, #Bloomberg, or the #FederalReserve’s financial conditions indices, in spite of the aggressive contractionary policy many have pointed out, financial conditions are way too loose relative to the reality of compounding economic threats. The evolving adverse macro picture for the US is progressively getting more dangerous for financial markets participants, though we aren’t seeing financial conditions reflect that level of stress. As a result, financial assets are still overpriced and we’re seeing very confusing price action. Perhaps market participants, at least to some degree, are recognizing the short-term potential in earnings upsides was just that: short-term. With financial conditions this loose relative to where they should be, the base case (temporarily not taking other factors into consideration) is to hike more. This becomes increasingly concerning for those who were way off and priced in rate cuts before they may have recognized the Fed is at a crossroads as it relates to their dual-mandate. The lag period at which monetary policy has historically operated is approaching, financial conditions are too loose in spite of the most aggressive hiking campaign in US Fed history (to this point), yet inflation is still too high with the US unemployment rate very close to historic lows. Sadly, the US Fed insists on using a lagging, unreliable labor market indicator that doesn’t sound the alarm - by design/calculation - until the US #economy is already in recession. #Markets #Finance #Valuation #InterestRates

📣 Exciting News! Sevens Report Featured in Captivating Business Insider Article! 📰 I am incredibly honored to share that Sevens Report has been quoted in this thought-provoking article discussing the US's continued potential for a recession. It's a must-read! https://lnkd.in/epwA9_2Z #BusinessInsider #SevensReport #EconomicInsights #MarketAnalysis #RecessionInsights #Stocks #StockMarket #TomEssaye #WallSt #StockMarketAnalysis

THE GREAT RECESSION Learning from past experiences is hard when you are not looking inward at the true cause. It was in my third year of study, when I first truly understood "The Great Crash" or "The Great Recession" during a Risk Management lecture. The Great Recession was a significant economic downturn that began in 2007 and extended for several years, impacting economies worldwide. It's widely regarded as the most substantial decline since the Great Depression of the 1930s. Various explanations were put forth about the crash, echoing previous instances, mainly sourced from third parties. Prior to the 2008 crash, numerous individuals faced choices on investing or abstaining from it. Throughout these transactions, buyers and sellers had opportunities to avoid the riskiest investments but chose not to. Despite warnings of a potential bubble, many ignored them. Recent history, like the 1998 Long-Term Capital Management crash, as well as older events such as the 1987 stock market bubble and the 1929 crash, should have provided lessons. Even the risks associated with mortgages and increasing interest rates were familiar. However, people failed to learn from these experiences. Perhaps they were not knowledgeable about the issue 🤔🤭🤭Hosea 4:6 This led me to realize that, even in our personal lives, it's challenging for us to learn from past mistakes or negative experiences in our lives when we don't introspect and understand the underlying causes from an inward perspective. #thegreatrecession #mistakesarelessons #mistakes