
U.S. recession odds rise to 40-45% in six months: DoubleLine's Gundlach - mataug
https://www.reuters.com/article/us-funds-doubleline-gundlach/us-recession-odds-rise-to-40-45-in-six-months-doublelines-gundlach-idUSKCN1TE36Q
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StevePerkins
I'm surprised this sort of thing is on HN's front page.

Yes, we are on the tail end of a long expansion cycle, and a recession is
inevitable. However, prediction headlines like this have been on the front
page of CNBC, MarketWatch, etc every other day for FIVE YEARS now.

On the alternating days, there are headlines about how the expansion has a xx%
chance of continuing for another two years.

Financial news is the lowest form of clickbait trash.

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umeshunni
> a long expansion cycle, and a recession is inevitable

Not necessarily - Australia has an expansion ongoing for the last 30 years.

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cencacenca
Yield curve inversion != recession, as most people on HN have clarified
numerous times. it's not even the top 10 predictors.

US has THE strongest economy in the world right now. You'll see depression in
China (already happening), and recession in Japan/EU/Canada/Mexico first. US
has the lowest unemployment rate in 30 years, wage growth, 3% gdp growth, and
foreign direct investments going through the roof.

~~~
aphextron
>US has the lowest unemployment rate in 30 years, wage growth, 3% gdp growth,
and foreign direct investments going through the roof.

This really has nothing to do with whether a recession is around the corner or
not. They don't just gradually come about over the course of years; they
happen in an instant. Before anyone is even aware of what's happening the
layoffs start piling up and it becomes exponential, as decreased business
spending and consumer confidence feedback into each other. Fall of 2007 was
the peak of irrational exuberance with a multi-decade low in unemployment and
all time market highs, but by spring of '08 there was mass panic and people
had lost everything.

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cencacenca
the 2008 recession was characterized by 0% interest rate and bad mortgage
loans. the 2000 recession was characterized by threats of emerging jobs
offshoring and bad investments into internet companies that don't make money.
the 1990 recession was characterized by threats of sky high oil price, and so
was 1980.

Nothing like that exists to hurt US economy right now

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remarkEon
>...bad investments into internet companies that don't make money.

Uhh

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nugget
Nobody really knows when the next recession will be or how bad it will be.
Whenever it does arrive, the most interesting impact will be on the pension
funds. A terrible but short recession e.g. 50% equity decline for 1-2 years
after which the Fed re-inflates the market is not as bad as a prolonged period
of stagnation e.g. 20% equity decline and then no growth for 5-10 years. In
the second scenario, trillions of dollars worth of pension funds head towards
insolvency.

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thrower123
There will be a concerted effort to tank the economy before the second half of
2020, I would be willing to take bets on it, particularly if the extended
faffing about in the wake of the Mueller report's failure yields nothing and
Democratic candidates continue to be this underwhelming.

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H8crilA
It so happens that it's very easy to bet on that and put your money where your
mouth is. Just buy some LEAPS puts on SPY. Don't even need margin for that.

For example the SPY 2020/09/18 $230 put trades for ~$5.6 a share.

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Tempest1981
I've never tried this -- how would I do this using ETrade or similar?

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H8crilA
Just to be clear - I think you're wrong, so I don't recommend it.

You need stock options permissions (don't know where is that in ETrade), and
then you need to find options on SPY. Here are quotes on Yahoo:
[https://finance.yahoo.com/quote/SPY/options?p=SPY](https://finance.yahoo.com/quote/SPY/options?p=SPY),
select desired expiration date. Wait for VIX to be low so that premiums are
cheap, and load up on those puts.

And again, I do not recommend it. You'll quite likely lose 100% of the option
premium you paid.

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Tempest1981
Understood, not planning to do this immediately.

I've also considered trading the VIX, but the only ETFs I've found seem
somewhat uncorrelated or less volatile. Can VIX be traded directly?

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H8crilA
You can go long or short on VIX but read what "contango" is and what happened
during the volpocalypse.

