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Major new recession warning sign sends market futures tumbling downward

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The financial world was hit on Wednesday with a major new red flag about a potential recession that sent stock market futures tumbling downward.

As Bloomberg reports, the yield on the ten-year U.S. Treasury bond has dropped below the yield of the two-year U.S. Treasury bond for the first time since 2007, which many market observers say is a leading indicator of a coming recession.

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Yields on ten-year bonds are usually higher than yields on two-year bonds because there is greater risk involved in investing in a long-term bond, which means investors in those bonds demand higher payouts than investors in short-term bonds.

But when the so-called yield curve inverts — that is, when ten-year bonds actually pay less than two-year bonds — it is seen as a sign that investors believe there are significant risks to the economy and are flooding their cash into safe harbors.

As for what this means for the U.S. economy as a whole, Bloomberg analyst Joe Wiesenthal writes “the last three times this happened, U.S. recessions soon followed.”

Pre-market trading on Wednesday showed futures of the Dow Jones Industrial Average trending downward by 1.44 percent, with the Nasdaq down by more than 1.5 percent.

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Enjoy this piece?

… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

We need your support to keep producing quality journalism and deepen our investigative reporting. Every reader contribution, whatever the amount, makes a tremendous difference. Invest with us in the future. Make a one-time contribution to Raw Story Investigates, or click here to become a subscriber. Thank you.



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Trump-loving neo-Nazi charged with insanely violent threats against Latino woman

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Federal agents arrested a Washington state man who allegedly threatened to "exterminate" Latinos as part of a race war he believed would be launched by President Donald Trump.

According to court documents, Eric Lin frequently praised Nazi leader Adolf Hitler online and sent multiple death threats against a woman in Miami and plotted to pay a man to beat her up, reported the Miami New Times.

"The time will come when Miami will burn to the ground — and every Latin Man will be lined up against a Wall and Shot and every Latin Woman Raped or Cut to Pieces," Lin wrote Aug. 8, according to investigators.

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Republicans likely to block ‘background checks’ after Trump’s abrupt reversal: report

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After two mass shootings over one weekend, President Donald Trump signaled that he would be open to strengthening background checks.

He promptly dropped his resolve to sign gun regulations one week later when he said that there were already strong background checks on the books.

With the president's apparent reversal, Republicans in Congress also appear to be abandoning legislation, reports Politico.

“I really don’t see the dynamic having really changed there much,” Senate Homeland Security Chairman Ron Johnson told Politico. “I don’t anticipate we’re going to pass a federal red flag law."

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‘Megalomaniacal, paranoid, and psychopathic’: Economist sounds the alarm on Trump’s ‘bottomless malevolence’

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Economist Jeffrey Sachs, a professor of Health Policy and Management at Columbia University, has written a frightening warning about President Donald Trump's "paranoid and psychopathic" leadership style, and he says it could have disastrous consequences for the world if he wins a second term.

In an essay published at progressive news website Common Dreams, Sachs argues that it would be a grave mistake to treat Trump like a cynical politician, when in reality he is an impulsive and vindictive narcissist who acts on his angry whims.

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