This downturn is often referred to as the early 2000s recession or the dot-com bust recession, which was further deepened by the events of September 11, 2001.
Remember Y2K?
There it is below.
It happened...Basically the Nasdaq or New economy exponentially grew from February 8th, 1971 until March 10th, 2000 where it hit the Y2K singularity and imploded.
An almost perfect exponential growth curve from 1971 to 2000 or 29 years.
Back then the Nasdaq was called the New economy while the DOW was the old economy and it peaked too but did not collapse.
It traded sideways for over a year.
You can see below the long term resistance line.
What you are seeing is what is called a distribution top.
What is that?
That is where the general population are buying while the insiders sell off their soon to be worth less holdings into the hands of the buyers.
From the year 2000 until late 2001 the insiders were dumping massive amounts of stocks into the hands of the buyers.
The Dow Jones Industrial Average peaked on January 14, 2000, during the height of the dot-com bubble. On that day, the index reached an intraday high of 11,750.28Then in September 2001 the DOW collapsed through long term resistance and imploded following 911.
When stocks and the Dow dropped during the market turbulence and the 2001 recession, the U.S. Treasury bond market generally rallied and bond prices rose.
When stock markets fall, investors often shift their money into safe-haven assets like government bonds. As demand for bonds goes up, bond prices rise and bond yields (interest rates) fall.How are the two points connected?
3/10/2000 and 9/11/2001?
"Osama bin Mohammed bin Awad bin Laden (March 10, 1957– May 2, 2011), also transliterated as Usama bin Ladin, was a founder of the pan-Islamic militant organization al-Qaeda. The group is designated as a terrorist group by the United Nations Security Council, the North Atlantic Treaty Organization (NATO), the European Union, and various countries."The Nasdaq collapsed on Osama Bin Laden's birthday 3/10/2000.
The DOW traded sideways then collapsed down into 9/11/2001 where Osama supposedly masterminded the attack.
1 comment:
Yes, U.S. yield rates inverted in 2022.
March 31, 2022 (when the 10-year fell to 2.331% and the 2-year rose to 2.337%).
Subsequent Inversions: The curve inverted again in June 2022 and July 2022 as the Federal Reserve aggressively raised interest rates to combat high inflation.
The above is what the output is from a query.
Only problem is that the FED does not fight inflation by raising rates.
The FED is forced to raise rates or their demand for yield because of inflation.
I am noticing that the recession is being hidden.
An inverted yield curve (when short-term interest rates rise higher than long-term interest rates) has historically preceded every U.S. recession over the past 60 years.
Real estate construction in the United States has slowed down significantly since 2023, driven by stubbornly high mortgage rates, rising development costs, and softer buyer demand.
August 2024: The U.S. Department of Commerce increased the pre-existing duty rate on Canadian softwood lumber to 14.54% (under the Biden-Harris administration).
August 2025: The Trump administration raised total countervailing and anti-dumping duties to 35.1%
September/October 2025: Trump signed a proclamation adding an extra 10% tariff on Canadian softwood lumber (effective October 14, 2025), pushing total combined levies past 45%
If the US real estate sector was booming...there would be no tariffs on lumber.
But now when demand is flat the cause of the slowdown in consumption of lumber is not the collapse in US real estate...It is Donald Trump and his tariffs.
U.S. softwood lumber consumption declined modestly in 2023 and has faced further softness through 2026 as residential construction remains relatively flat due to high mortgage rates and affordability pressures
Apparent steel consumption in the USA has trended downward or stayed constrained compared to past decades since 2023.
If the demand for steel by the USA was high...There would not be tariffs.
U.S. Treasury Secretary Scott Bessent acknowledged that "I can't control the bond market" and walked back his earlier "I am the house now" bravado after a sharp selloff pushed 10-year Treasury yields up nearly 50 basis points.
When there are more sellers of bonds than buyers...the price of the bond drops and the yields rise.
When there are more buyers of bonds than sellers...the price of bonds rises and yields drop.
Generally when equity markets sell off the revenue flows into bonds and is why yield rates drop down which forces the FED to follow along.
You need trillions of dollars of flow to buy up or sell off bonds to cause rates to rise up or drop.
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