Because if a recession hits, Barclays will be paying 0 and the 10 year you will still be paying 2.35% on your purchase price (will also be worth more than purchased for)
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Still a gamble. If rates go up your 10 year bond value will go down. Bonds arenāt worth the bother.
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Recession? Donāt be so sureā¦
Isnāt China supposed to explode? Isnāt it drowning in bad debt, its cities full of empty buildings and Trumpās trade war hurt it so bad it canāt get up?
Must be fake news.
Fake news or real news I just laugh all the way to the bankā¦ 
Yes, it is exploding. Everybody expects imploding.
@Jil you are the only one who donāt own China stocks. Grab some BABA or TCEHY.
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If I buy, I need to research and buy, need to know more about China economy etc, which is beyond my scope. Let me stay with in USA as I have plenary of choices.
Also NO FOMO.
For the economy, what we should be focused on are single family starts and new home sales . As I noted in Investment and Recessions āNew Home Sales appears to be an excellent leading indicator, and currently new home sales (and housing starts) are up solidly year-over-year, and this suggests there is no recession in sight.ā
RI as a percent of GDP has been sluggish recently, mostly due to softness in multi-family residential.
Also, look at the relatively low level of RI as a percent of GDP, new home sales and single family starts compared to previous peaks. To have a significant downturn from these levels would be surprising.
I wouldnāt worry about recession until CR tells me to, and he isnāt even on recession watch yet. Like I wrote two weeks back, obsessing over yield curve inversions while completely ignoring the extremely low value of the yields doesnāt make sense.
Recession is not even on the distant horizon.
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Good videos. Thanks for sharing!
This is an interesting analysis. Though the 3 main variables CR is considering can be counter-argued:
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SF Starts and New Home Sales are both absolute numbers. Comparison of these numbers against previous peaks can be unfair if the total # of housing buyers differ in absolute #'s. (That is, if millennials are less likely to buy homes).
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RI as percent of GDP is a complex beast. Since most families own only 1 home, if GDP distribution is more concentrated on fewer # of families, RI / GDP would drop. i.e. Income / wealth gap would make this much lower.
OTOH, millennials are outnumbering Gen X / boomers right about now, so the above absolute count analysis may work. 
If millennials donāt buy their own houses they will live in apartments. Thatād mean MFH investment will grow. RI will still go up. Unless millennials stay in their parentsā basements forever. 
Not true. Those parents will die and that house will either be inherited or sold to the younger generation.
This Fed is stubborn and refuse to lower interest rate. Some people are now expecting 2 rate cuts in September and December.
https://finance.yahoo.com/news/treasury-yield-curve-inversion-signaling-fed-rate-cut-142133066.html
Itās easier for rates to invert now than in the past. The governments of virtually all developed nations are up to their eyeballs in debt. Long term rates can never be allowed to rise to past levels. All that debt needs to constantly roll over.
What you said is the reason why inverted yield should NOT have happened. Government flooding the market with bonds should depress bond prices thus pushing yields up, not down.
Investors are so pessimistic now they rather park their money in super low yielding treasuries, or in the case of German bonds even with negative yields. People would rather pay to park money in bonds than risk it in stock market. Thatās how pessimistic people are right now.
Buy?
The low treasury yield is literally forcing people to buy stocks. 2% yield isnāt even enough to cover inflation. So if thereās any progress at all with China the market can melt up in no time.
In a free market that is what would happen. Central banks are intervening (they must, to keep the system solvent). Yields are far below levels which would be dictated by market forces alone, making inversions easier. As for the economy, consumer confidence just surged to the highest level in 15 years. Any investor pessimism is misplaced.
Calculated Risk is still not on recession watch. Maybe not freaking out just yet.
If the extra tariff on China and Mexico goes thru thoughā¦
A global recession could start within nine months if President Donald Trump imposes 25% tariffs on an additional $300 billion of Chinese exports and Beijing retaliates, according to Morgan Stanley. Separately, JPMorgan Chase & Co. said the probability of a U.S. recession in the second half of this year had risen to 40% from 25% a month ago.