Don’t panic quite yet, but there is a key recession signal that may be rearing its ugly head again. I have to admit, it was not something that I was aware of before recently, when I heard a report on it, talked to some more investment wise friends, and did a little research. The problem is an inverted yield curve. It
even sounds serious, and it is, because, according to, an inverted yield curve has preceded every recession in the last 60 years.

So what is it all about? The yield curve measures the difference between long- and short-term bond yields, usually Treasury Bonds. When the curve inverts, meaning that the long-term yields fall below the short-term yields, historically, it has indicated that a recession is coming.

Although there are many reasons offered by some experts as to why we shouldn’t worry, like our “good economy,” the fact that this spread is narrowing enough to make some other experts concerned, is something that we might all want to pay attention to. I know that I will, because something that has “predicted” every recession in over a century has my attention.

On a somewhat related subject, in this column we have often discussed the need for an emergency savings account as a buffer against going into debt when bad things happen to good people. A recession is one of those things that no individual could cause, but that everyone could be better prepared for.

The reports about the savings rates of Americans seem to be all over the board lately, and they can definitely give you financial whiplash, but the emergency savings rates reports continue to be troublesome. Here are the numbers according to a recent Bankrate survey: 29 percent have the six months of expenses that most financial experts recommend; 18 percent have three to six months; 22 percent have fewer than three months; and 23 percent have no emergency savings.

Everyone knows that it can be difficult to create that emergency savings account, but it is critical to good financial health to have that account. It is also important to replenish any withdrawal from the account for an emergency as soon as possible.

On a different subject, but one that we regularly discuss in this column, there has been yet another recent teachable moment about credit card debt that you may have read or heard about. It appears that Judge Brett Kavanaugh, the President’s nominee for the Supreme Court, had been carrying a significant amount of credit card debt for years. Because the federal government's annual financial disclosure forms, which I filed for 20 years, only require reporting in ranges, it is unclear exactly how much credit card debt the judge was carrying.

It is important to note is that the debt has now been paid off, and my purpose in discussing this story is not to be critical of the judge or his financial choices. The reason that I have included this story is to once again make a number of important points. First, carrying credit card debt, even for a short period of time, can be very expensive, given the increasing interest rates., in its coverage of this story, laid it out this way: The average credit card interest rate is now 17 percent, and total credit card debt has now exceeded $1 trillion, the highest ever. If the debt (which CNBC reported was for baseball tickets for the judge and friends, and home
improvements) was at the low end of $60,000, and it was paid off over three years at that average rate, the total cost would be $77,000. At the high end of $200,000, it would be $256,000. As I always say in my CARE presentations, is there really nothing better that someone could do with that $17,000 or $56,000 in interest?

The second point I like to make is that understanding the true cost of credit card debt, as laid out by the report, is not about your Academic IQ. It is about your Financial IQ, and the two are not necessarily the same. You just have to spend a week in a bankruptcy court listening to the many debtors with plenty of academic degrees and professional jobs explaining their credit card debt to understand that fact. Judge Kavanaugh graduated from the prestigious Georgetown Prep, Yale and Yale Law School. How could you have a better academic record?

On a final subject, you are no doubt aware by now of the projected airline pilot shortage. When I hear things like that, I tend to immediately think of two things — is it going to cost me more, and are there job opportunities out there for young people? Interestingly, in a piece on the subject, answered both those questions. The industry may only have “about two-thirds of the pilots the U.S. will need in the next 20 years. That could mean constrained airline revenue, higher fares, or both. Kids, get your pilots licenses, because this could be the career of the 2020s and 2030s.” I couldn’t have said it better myself.

John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at or at