Inflation Markets Just Flashed Recession-Red-Flag For The First Time Since 2008

by | Mar 9, 2018 | Headline News | 25 comments

Do you LOVE America?


    This report was originally published by Tyler Durden at Zero Hedge

    Amid all the talk of wage growth and surveys suggesting input and output prices are soaring, the market for ‘inflation expectations’ is suddenly flashing a recessionary red flag not seen since July 2008.

    The last few months have seen short-term (5Y) inflation expectations in the breakevens market surge to their highest in 5 years; and while longer-dated inflation expectations have also risen, they have not kept pace with the short-end. A similar move was last seen in Q1/2 2008.

    Simply put, markets are expecting an inflationary impulse in the short-term, but do not expect it to last as it will likely be swamped out by a recession as the economy is not grown fast enough to justify prices rising at that pace, and instead either profit margins will collapse or end demand shrivels as companies fail to pass through rising costs.

    And, as a result, for the first time since July 2008, the inflation breakevens yield curve has inverted, with the market’s expectations for 30Y inflation now below that just 5 years ahead.

    What is especially notable, is that the last time this happened, the US was already deep in recession (and we note that each time the 5Y has approached the 30Y, it has backed away – which given the sensitivity of stocks to breakevens could be problem going forward).


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      1. Okay, so when is it going to just crash and burn already?

        • CC – answering you – about as quick as that boat in the picture. Definitely one built by liberals. Crappy material, way to low of a gunwale midships, lacking any real keel ballast and in water over the skipper’s head. And just like that bill-boat – all it will take is one wave.

        • 2140 when the oil becomes scarce.

          • Oil is always going to become scarce. [sigh]

      2. we always have the ups and downs in America people scream about inflation and a down-turn in business as if the world is coming to a end==we have the fear mongers upsetting the people=== they a lot of times are out to make money from the fear they spread so beware the the world is not coming to a end make your decisions wisely

      3. Where’s the USDA free cheese and mystery meat being handed out. Take me to your feeder.

        • The govt pays food producers to destroy their products in order to price support save their asses.

          $2B went to the dairy farmers to dump milk to support recent prices.

      4. Concerned Citizen, just keep an eye on all things financial and domestic political, and you’ll see it happen right in front of you. Probably won’t be a dramatic one-day thing, like a 2 hour movie produces a situation, a hero, a solution and happy ending. It’ll be more like a continuing report of bad news, more bad new, and then still more bad news. Remember that the Union didn’t get much good new about the War between the States until the latter half of 1863, and that the US didn’t get the upper hand against the Japs in the Pacific until half way through 1942. All things, good and bad take time. Use it to prepare.

        • we can study Venezuela for a realist time frame.

          it took years to get to where they are today.

      5. So I guess all that shit I’m presently making, that they’re stressing me to (fairly serious) ill health to get out NOW NOW NOW NOW NOW…

        Ain’t gonna sell.


        Second year in a row.

        Sur-fucking-prise, motherfucker.

      6. Right now I’m walking in sunshine!!!

        Inflation won’t bother me I’m set.

        everything is paid off and this means My S.S. check will get bigger. LOL


        • Law enforcement pays good huh Sgt.? Enhanced greatly by civil asset forfeiture, aka legalized theft by law. Sessions is all for it. That one thing greatly sours the proposed respect from we the people.

      7. Something is not right here with all this record economic news (DOW over 400), and the latest jobs numbers. I learned yesterday that they are cutting shift hours down to just 3-hours at the gym I belong to (LA Fitness). That can’t be good. Maybe it’s good for Wall Street but not for main street.

      8. Just like the Hindenburg Omen that appeared on the charts consistently since 2010. As likely as the Shemita Cohen getting a prediction correct just once in its lifetime.

        The US govt isn’t cutting, no collapse is coming.

      9. If things are supposed to be so good, why has the retail collapse fallen off of MSM’s radar?

        It’s like MSM only reports the bad economic news but not all of it. Just enough to take the people’s attention off of how there is no way things can be as good as they say they are.

        There is some really strange rumors coming out of Upstate New York. All of the Sam’s Clubs (like COSTCO), have shutdown here where I live.

        Stranger still, I am hearing that instead of the merchandise being taken out of these closed stores, like you would expect, that tractor-trailers have been coming in and dropping off more merchandise into these closed stores.

        Even stranger than that is how if business is so bad that the Sam’s Clubs are being shutdown, why are COSTCOs being built and opened?

        Our local Sam’s Club was packed 24/7. The gas lines stretched practically out into the street. And now they are closed? What gives?

        Is there warehousing going on for something?

        The “closed” Sam’s Clubs still have the power on. The doors all have this brown paper taped to them so you can’t look inside.

        Just saying.

        • It seems Amazon has interest in these Sam’s Clubs and the inventory. Just replacing Sam’s and many other retailers for this Giant Amazon. So many store closures across the us but more spending in retail than ever!

          • They say in an emergency grocery stores are the first to be cleared out. They live and die on just-in-time delivery.

            These Sam’s Clubs fill a gap that starts just after the grocery stores go empty. Most of their inventory is long term and in bulk.

            Fuel deliveries also stop during an emergency. These warehouse stores are not as immediately effected.

            This is partly the explanation for these Sam’s Club stores possibly being set aside fully (and even fuller) stocked.

            Again, I don’t think anybody really knows what is going on with these Sam’s Club closures.

            Another piece of news is that the gasoline trucks that supply Sam’s Clubs are still coming. And they are still making deliveries. You would think they would be taking the fuel out of these tanks, if the warehouses are closed.

      10. sam’s club closed a few stores around here! they still have power on because they still need to be heated because its still winter! if not heated then the water and sprinkler systems would freeze!

      11. The problem with Amazon is threefold.
        1. Shipping:
        is a fee which makes everything more expensive. Shipping fees can become higher and make items unaffordable. Shipping takes time. Items must be left outside your house. This is not as safe as picking them up at a store.

        2. Amazon is slowly becoming the purchasing MONOPOLY.:
        A monopoly has the power to put any manufacturer or producer out of business simply by refusing to carry the product.

        3. Privacy:
        Stores give the customer some anonymity, especially using cash.



        • What happens if Amazon refuses to do business with an individual? What if there are no stores to turn to.


          • Really good point.

            Globalism = one world order = total world domination = one store (called having a Monopoly) = one retail = equals “we” (the powers that be) decide everything.

            Get banned under the new world order and you are banned for life.

            These corporations already practice this shit. It’s called: “We reserve the right to deny service to anyone at any time.” They decide. Not you. They.

            They decide what will be sold, how well it will be made, and at what price you will pay for it.

            Kind of saw this thing out of the “Big Three” automakers back in the late 1960s and early 1970s. Back then the people had choices. They voted with their feet. They bought Hondas and Toyotas.

            Globalism will fix that (for the corporations).

      12. You reckon the newer domestic made models of automobiles have extended their shelf lives? I highly doubt it. They have just boosted the prices way high for basically the same old crap. No real improvement in mpg, tied in a knot with big oil. All the added on BS like computer interface, who needs that? US automobile manufacturing got you by the balls. Bring back cash for clunkers, get another lemon and repeat the cycle.

      13. If American manufacturing does recover so that it has a much larger share of the overall markets, it will not translate to the job levels we once enjoyed. Technology changes in manufacturing will mean fewer jobs than before the decline. I know alot of Americans who would rather buy a used car where the quality is better rated than a new American car even if they are the same price.

      14. The retail apocalypse is really just another step of the avowed goal of the Globalists. As is gun control (confiscation).

        In Upstate New York Sears (just about), K-Mart, Gander Mountain. All gone. No guns there. Not anymore.

        Dick’s. Field and Stream.

        Forget the Mom and Pop stores. They NY Safe Act has stopped many manufacturers from shipping anything to a Federally Licensed Fire Arms (FFL). Rockriver won’t sell in New York State. Ruger can’t ship their banana magazines for their 10/22s into the state. SigSauer can’t ship their 9 mm magazines. Also illegal under the NY Safe Act.

        And the economic news just keeps on playing — with record employment numbers (lies), the record setting stock market (huge lies), and the “recovery” (damned lies), until the music stops. One day you are down to one gun store. Say it’s Dick’s. And they stopped selling semi-auto anything years ago.

        That’s the truth. That’s the future. Much of it is now.

      15. The anomaly happened, already, at the highlighted dates (2008), and you are only now reacting to that, a decade or so later (2018).

        I think, a hack is someone who is reactionary, not being an instigator.

        If you meant to game the system (and, I am not saying whether that is ethical or possible according to the rules) you should be learning how to cause a fluctuation like that, and now how to respond, at some later date.

        It may be completely illegal, or you may have to be operating at L3 or 4 or higher. I am not being a know-it-all, or saying that private parties should try something like that.

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