three words, i ve tried to describe to people to say it is like if you look at that, that s the downturn in the graph before each of these recessions. so that s why we worry about it. it s like a tornado warning. it doesn t tell you that a tornado is going to happen. it tells you the conditions for a tornado are present. although this is a pretty prescient tornado warning. in the last 50 years, the yield curve has predicted every single recession. and it s never falsely predicted a recession. this is a pretty strong signal. now listen, there are arguments why this time may be different. i have to say, look at my hairline. i ve seen a lot of business cycles. i ve been through a lot of inverted yield curves. every time economists including me come out and say don t worry, this time is different, here are the reasons why. i take that all with a grin of salt. the other thing i would say is look. even if the yield curve inversion isn t signaling
tornado is going to happen. it tells you the conditions for a tornado are present. although this is a pretty prescient tornado warning. in the last 50 years, the yield curve has predicted every single recession. and it s never falsely predicted a recession. this is a pretty strong signal. now listen, there are arguments why this time may be different. i have to say, look at my hairline. i ve seen a lot of business cycles. i ve been through a lot of inverted yield curves. every time economists including me come out and say don t worry, this time is different, here are the reasons why. i take that all with a grin of salt. the other thing i would say is look. even if the yield curve inversion isn t signaling recession, what it is surely signaling is a much slower economy in 2020, and the economy is going to be vulnerable to anything else that can go wrong. by the way, there is a boatload of things that can go wrong. just go look at china. go look at brexit. go look at the vat increase t
are extenuating circumstances. you always hesitate to say that this time is different. it will save us a lot of times and esther we fed inverted yield curves and nothing s happened later. here s what i think people see, charles, they see the dow on monday down 400. they see the dow up on tuesday 400, they see the dow back down again for 50 today. make sense of it. to speak of the volatility has been driven by events more than anything else. yesterday s bounce was a change in some of the tariff stuff, some is going to be delayed, some taken off the table. if you look at the list of things that are going into effect on september 1st, there is 122 pages of those, just 21 pages of things that are delayed. intriguing items like toys and games and things that wouldn t hurt the middle class per say if it were to come to that. i think you got the uncertainty are the question marks, what is the inverted yield curve mean in the global economy that is sinking where you have negative
business itself. neil: i don t want to talk about that. if things slow from this level, should the president worry? i don t think it s going to be an issue because of what we re seeing with this booming economy. he s in it for the economy. the forgotten men and women as he s done everything he can by rolling back taxes and regulations. neil: that could change with the inverted yield curves, there s a lot of lag time between the impact and how its felt. the lag team is what the president has to bank on right now. if we re going to a recession now, it will be awhile until people feel it. that s what the president has to worry about. we have 15 months for the election. that s a long time. consumer confidence is at an all-time high. people are employed. the stocks are doing well. everybody feels good. it s down the road.