Part 3/12:
The inversion of the yield curve, which began last July, has worsened significantly, signaling recession risks. Kathy describes how this inversion has led her to fear a return to the Great Depression era. The 1930s was marked by an over 80% collapse in the S&P 500 from peak to trough, accompanied by banking crises. Today, similar warning signs are flashing; banks are heavily invested in long-term bonds issued at record low rates, which are now exposed to losses as interest rates surge.