Plenty of available unfilled jobs at low wage in my area.. Also plenty of wealth that doesn't need to work. A lot of retired high maintenance people.
The medical profession doesn't pay as well around here so the nurses and physicians are of lessor quality. They can double their Money by going to the Bay Area or OC. The traveling nurses have seen to that.
We have one neurologist locally for 250,000 population. By private donation, the hospital gifted him a Ferrari to come and stay. He loves it around here. He certainly should.
But we are in a mild recession. At least psychologically for at least half the population. And for those people, it sucks.
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” – Ben Bernanke, 2002
Natural forces of supply and demand are the best regulators on earth.
We are in a biforcated economy. The haves and the have nots. A lot of the have nots are getting a lifeline from govt or private parties. This was not available 90 yrs ago.
@streeter said:
We're nowhere a depression of any kind.
We are in a biforcated economy. The haves and the have nots. A lot of the have nots are getting a lifeline from govt or private parties. This was not available 90 yrs ago.
Lifeline = QE
QE = money printing
money printing = economic problems
Nothing is free, especially money.
Natural forces of supply and demand are the best regulators on earth.
@streeter said:
We're nowhere a depression of any kind.
We are in a biforcated economy. The haves and the have nots. A lot of the have nots are getting a lifeline from govt or private parties. This was not available 90 yrs ago.
Lifeline = QE
QE = money printing
money printing = economic problems
Nothing is free, especially money.
Sounds like you need to get a life derry. Do not spend your time or energy on things you have no control over. Good luck.
@streeter said:
We're nowhere a depression of any kind.
We are in a biforcated economy. The haves and the have nots. A lot of the have nots are getting a lifeline from govt or private parties. This was not available 90 yrs ago.
Lifeline = QE
QE = money printing
money printing = economic problems
Nothing is free, especially money.
Sounds like you need to get a life derry. Do not spend your time or energy on things you have no control over. Good luck.
I have a debt free comfortable life. My degree is in economics but now it is simply a hobby that I find entertaining. I share what I learn. Most people learn from what I share, a few don't care to learn or want to argue about facts. As you have probably noticed, I don't let the few slow down my passion for the truth.
Natural forces of supply and demand are the best regulators on earth.
My dad warned me not to become an Econ major in school. "Everybody has an opinion even if it's wrong".
If you want to learn money, just watch how we run the company. Nobody can predict the future so if they say they can, why are they talking to you? Why aren't they on a south sea island?
Econ is the science of looking backwards.
18 months ago a tire cost me $66. Last week, $80. Will it return to $66 or go up to $100? Who knows. Should I buy an extra now or wait?
@derryb said: To maintain consumption levels, consumers are drawing down savings rapidly. Personal savings are back to levels last seen five years ago:
Actually folk are pulling money from their savings accounts and buying CDs and money markets and t-bills..
Actually folk are pulling money from their savings accounts and buying CDs and money markets and t-bills..
Pulling money from a savings account and buying CDs and money markets doesn't affect savings at all since they are all part of the broader M2 money supply. The chart more accurately represents people initially saving stimulus checks, and then spending the windfall. But since some of the stimulus was maintained in household's savings balances, the chart actually does reflect that the remainder of households, and likely a majority of them, have dwindling savings.
Actually folk are pulling money from their savings accounts and buying CDs and money markets and t-bills..
Pulling money from a savings account and buying CDs and money markets doesn't affect savings at all since they are all part of the broader M2 money supply. The chart more accurately represents people initially saving stimulus checks, and then spending the windfall.
Yes...I know that, but derryb doesn't. I've shown the M2 chart many times to illustrate how much money is floating around, but derry is trying to support his opinion that people are going broke by breaking savings out of M2. He contends this decline in savings is direct evidence of an economy and Americans being destroyed, which simply isnt correct.
I don't think @derryb is wrong wrt savings falling and a weakening economy. There are definitely cracks visible. The issue is that the Fed can "successfully" do whatever it takes to keep the system chugging along. Without going into a "P" word discussion, more than half of US households are now wards of the state (i.e., not paying any federal income tax). And, If Japan is an example, the central bank can ultimately go negative on interest rates and buy up the entirety of the equity and bond markets to prevent a short or midterm readjustment to quality of life. Probably not possible over the long term. So when a concept like capitalism is not allowed to function as intended, all kinds of extreme imbalances are allowed to exist for long periods of time. One thing that is making the economy look better right now is the fact that significant portions of the various Covid bill dollars were not spent during the past couple years. That money is providing new support to the economy now while making this year's reported deficit look almost manageable.
However, "Fed officials insist this time is different - their preferred measure of inflation may have peaked already at just over 6%, for instance - and still feel inflation can be beaten without a substantial rise in unemployment or a recession." LOL
Inflation itself will fuel unemployment as higher prices for inventory and energy will shutter thousands of small business. Britain is proving this to be true. The higher end product prices to support higher costs will reduce patronage and jobs.
Natural forces of supply and demand are the best regulators on earth.
The world economies are failing around the US economy. Including the boogie man countries China and Russia. This climate is neither inflation by demand pull or supply push, but is certainly quickly becoming a nightmare for future US growth. Once the employment numbers become real, not politically massaged, the real discomfort in the USA will become overwhelming. There will be no way to avoid the reality of a severe economic downturn spiral onto a new plateau of lower living standards.
You'll wish you could get the jobs people eschew or elders can't handle anymore.
The uplifting commentary is brought to you by: Dig Ten Left Gold inc. , Zinc and Gutter mines.
@jmski52 said:
FedEx says it's a worldwide slowdown such that they are making adjustments, i.e. - here come the cutbacks & layoffs.
This whole thing is being engineered, don't BS yourself.
The FED is attempting to create a rise in unemployment. Such will reduce demand on our currently supply driven inflation. Since the FED has no tool that can address supply side issues it must attempt to reduce demand in order to bring prices down. A decrease in available spending money is one of their inflation fighting tools.
Natural forces of supply and demand are the best regulators on earth.
The FED is attempting to create a rise in unemployment. Such will reduce demand on our currently supply driven inflation. Since the FED has no tool that can address supply side issues it must attempt to reduce demand in order to bring prices down.
It's a pre-engineered takedown of our entire economy. It's worse than 1979-1980 because of the massive leverage in the financial system from derivatives. If the bond market fails, there is no financial system or stock market.
Q: Are You Printing Money? Bernanke: Not Literally
@TwoSides2aCoin said:
Raise those rates. I still don't see how higher prices curbs inflation.
It encourages most of us to pay down debt. Not our leaders.
Only encourages paying down variable debt. Why would one pay off a 3% mortgage when they can get 4% in a CD?
@TwoSides2aCoin said:
Raise those rates. I still don't see how higher prices curbs inflation.
It encourages most of us to pay down debt. Not our leaders.
Only encourages paying down variable debt. Why would one pay off a 3% mortgage when they can get 4% in a CD?
In the real world , I think much of the debt is on credit cards. Those are not low interest loans.
@TwoSides2aCoin said:
Raise those rates. I still don't see how higher prices curbs inflation.
It encourages most of us to pay down debt. Not our leaders.
Only encourages paying down variable debt. Why would one pay off a 3% mortgage when they can get 4% in a CD?
In the real world , I think much of the debt is on credit cards. Those are not low interest loans.
No they surely are not, but credit card debt represents only about 6% of total household debt. 70% is mortgages.
@TwoSides2aCoin said:
Raise those rates. I still don't see how higher prices curbs inflation.
It encourages most of us to pay down debt. Not our leaders.
Only encourages paying down variable debt. Why would one pay off a 3% mortgage when they can get 4% in a CD?
In the real world , I think much of the debt is on credit cards. Those are not low interest loans.
No they surely are not, but credit card debt represents only about 6% of total household debt. 70% is mortgages.
Mortgage debt is investment debt in a solid investment that in most cases grows in value. Kudos to those fortunate enough to afford such debt. CC debt for consumables? Far from the same thing. Items are here today, gone tomorrow, while the CC debt for them lingers on with normally high interest payments.
Percentage of CC household debt is low, only when compared to mortgage debt. Take away the mortgage investment debt and recalculate your household CC debt percentage. You will be surprised.
Natural forces of supply and demand are the best regulators on earth.
@TwoSides2aCoin said:
Raise those rates. I still don't see how higher prices curbs inflation.
It encourages most of us to pay down debt. Not our leaders.
Only encourages paying down variable debt. Why would one pay off a 3% mortgage when they can get 4% in a CD?
In the real world , I think much of the debt is on credit cards. Those are not low interest loans.
No they surely are not, but credit card debt represents only about 6% of total household debt. 70% is mortgages.
Mortgage debt is investment debt in a solid investment that in most cases grows in value. Kudos to those fortunate enough to afford such debt. CC debt for consumables? Far from the same thing. Items are here today, gone tomorrow, while the CC debt for them lingers on with normally high interest payments.
Percentage of CC household debt is low, only when compared to mortgage debt. Take away the mortgage investment debt and recalculate your household CC debt percentage. You will be surprised.
Credit card debt is still less than $1 trillion. 25% have no debt.
Yes, those that buy consumable on credit card because they have no cash are in trouble, just as it always has been. This is still a very low percentage of the population. We understand your concerns, but it is not the massive problem many want to make it be.
Gutter peddlers have been calling for the end of the world since the day they started peddling the gutter metal. The USA remains economically strong. RGDS!
@blitzdude said:
Gutter peddlers have been calling for the end of the world since the day they started peddling the gutter metal. The USA remains economically strong. RGDS!
Bizzaro World. LOL
Natural forces of supply and demand are the best regulators on earth.
@blitzdude said:
Gutter peddlers have been calling for the end of the world since the day they started peddling the gutter metal. The USA remains economically strong. RGDS!
@blitzdude said:
Gutter peddlers have been calling for the end of the world since the day they started peddling the gutter metal. The USA remains economically strong. RGDS!
Bizzaro World. LOL
Yes at least we agree on something. LOL
quite the opposite. You live in a fantasy. What do they call people who have been fooled?
Natural forces of supply and demand are the best regulators on earth.
@blitzdude said:
Gutter peddlers have been calling for the end of the world since the day they started peddling the gutter metal. The USA remains economically strong. RGDS!
@blitzdude said:
Gutter peddlers have been calling for the end of the world since the day they started peddling the gutter metal. The USA remains economically strong. RGDS!
This is a little hard based on the poll answers, my 401K is a 301K but my savings are still up and while I have noticed higher prices, they aren't really crimping what I do. We still travel, I still buy coins, my wife still gets shoes.
I used to work for another financial firm in which I made mega bucks (well more than now) but I wasn't happy. I make a little less now but I'm happier and can make more time off. I guess, its not all perfect, but I'm still ok.
Real wages (after inflation) have been declining for over a year:
To maintain consumption levels, consumers are drawing down savings rapidly. Personal savings are back to levels last seen five years ago:
In addition to using savings, credit card usage is growing at the fastest clip in over 20 years:
@DerryB, I don't believe these charts are correct. I have access to real numbers (like from Moody's, Haver Analytics) and they don't look like this. For example the average savings rates are still higher any time other than the Covid lockdowns. I can't paste them though as we are not allowed to paste them outside of any internal documents. But I would not take the charts posted at face value.
Not exactly. But markets have been responding more negatively the day after fed meetings. As long as the fed continues to do and say pretty much what markets expect (demand) there isn't much to initiate some sort of "reset". Look at VIX.... Fed rate increases,and threat of QT have cut stonk market valuations by 25% or so with very little volatility. I think due to all the algo trading and that fact that personal investing (mainly through 401ks, etc.) Is basically automatic, and there is always a bid.
Millions upon millions of new undocumented people know our economy is great. That's why they're flocking here. Look at how good it is, not how bad. Make room !
Well, I did get one agree on my sarcasm...BUT there are great and rare opportunities now, which could get "better" depending on a person's perspective. The S&P is down today 21.6% from the closing high in January. Get in at this point, and it will be a gain of 27.7% whenever the SP returns back to the January high. The sun also rises. I have been allocating more to SP in the last two sessions in my 401K, will increase the amount as the market declines. A rare opportunity for some guaranteed large gains.
Robert Scot: Engraving Liberty - biography of US Mint's first chief engraver
S&P in for at least another 21.6% decline, likely more. Gonna make 2008 look like it was nothing. Yes I remain a complete pessimist when it comes to the FED fixing the problems it created. Sure it will eventually reduce inflation but not without a great price to the economy and to jobs. Personally, I look for the FED to pivot its current position as the weeks unfold. The FED knows only one cure - more funny money. They will continue to blow the crisis bubbles and paper them with money until it no longer works because they have destroyed the value of your dollars.
Natural forces of supply and demand are the best regulators on earth.
Keep in mind that the Fed's QT effort is barely underway because there aren't enough maturing MBSs to roll off their balance sheet. It's not like they are,selling any bonds. Historical median TTM S&P500 PE ratios are around 15. A drop to that level at current earnings levels would give the S&P500 a 20% haircut from here. If indeed entering recession (does anyone still think we are not?) earnings might be expected to fall by 20%. In that case, at a PE of 15, S&P500 would be around 2,400. But why stop there...why shouldn't markets overshoot a bit on the way down too (capitulation?). Maybe a PE of 10 and S&P500 at 1600? Sure, most would say that is riduculous, but stonk market valuations arguably been at ridiculously high levels for most of the past 2+ decades, courtesy of profligate fiscal spending and a Fed that adopted artificially low interest rate policy. Only options now are to screw the masses with inflation, or claw back much of the paper gains and accept a recession. Debatable as to how severe it will be, but it is coming (if not already here)
Keep in mind that the Fed's QT effort is barely underway because there aren't enough maturing MBSs to roll off their balance sheet. It's not like they are,selling any bonds. Historical median TTM S&P500 PE ratios are around 15. A drop to that level at current earnings levels would give the S&P500 a 20% haircut from here. If indeed entering recession (does anyone still think we are not?) earnings might be expected to fall by 20%. In that case, at a PE of 15, S&P500 would be around 2,400. But why stop there...why shouldn't markets overshoot a bit on the way down too (capitulation?). Maybe a PE of 10 and S&P500 at 1600? Sure, most would say that is riduculous, but stonk market valuations arguably been at ridiculously high levels for most of the past 2+ decades, courtesy of profligate fiscal spending and a Fed that adopted artificially low interest rate policy. Only options now are to screw the masses with inflation, or claw back much of the paper gains and accept a recession. Debatable as to how severe it will be, but it is coming (if not already here)
Nice summary!
Q: Are You Printing Money? Bernanke: Not Literally
@RobM said “Only options now are to screw the masses with inflation, or claw back much of the paper gains and accept a recession.”
Agree. Undoubtedly a bit of both. Powell clearly realizes the predicament he’s in. My guess is he’d be happy with 6-7 percent inflation for a few years and a 15 % further drop in equities.
Ukraine is still a huge wildcard.
If we survive the next ten years or so, I’m bullish!
@RobM said:
Only options now are to screw the masses with inflation, or claw back much of the paper gains and accept a recession. Debatable as to how severe it will be, but it is coming (if not already here)
Either way masses are already screwed by real inflation as well as the unemployment that is coming due to higher rates. Recession (by definition) is here. Those that don't agree will soon sing a different tune.
What happens when FED runs out of bullets?
Natural forces of supply and demand are the best regulators on earth.
Comments
Looks like that chart shows employment (seasonally adjusted Leisure and Hospitality) back to 2016 levels... is that good?
Plenty of available unfilled jobs at low wage in my area.. Also plenty of wealth that doesn't need to work. A lot of retired high maintenance people.
The medical profession doesn't pay as well around here so the nurses and physicians are of lessor quality. They can double their Money by going to the Bay Area or OC. The traveling nurses have seen to that.
We have one neurologist locally for 250,000 population. By private donation, the hospital gifted him a Ferrari to come and stay. He loves it around here. He certainly should.
But we are in a mild recession. At least psychologically for at least half the population. And for those people, it sucks.
Recessions don't come in flavors. They is or they ain't. They are however a mild depression.
Natural forces of supply and demand are the best regulators on earth.
The Federal Reserve Is A Suicide Bomber
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” – Ben Bernanke, 2002
Natural forces of supply and demand are the best regulators on earth.
We're nowhere a depression of any kind.
We are in a biforcated economy. The haves and the have nots. A lot of the have nots are getting a lifeline from govt or private parties. This was not available 90 yrs ago.
Lifeline = QE
QE = money printing
money printing = economic problems
Nothing is free, especially money.
Natural forces of supply and demand are the best regulators on earth.
The real state of the consumer:
Real wages (after inflation) have been declining for over a year:
To maintain consumption levels, consumers are drawing down savings rapidly.
Personal savings are back to levels last seen five years ago:
In addition to using savings, credit card usage is growing at the fastest clip
in over 20 years:
Natural forces of supply and demand are the best regulators on earth.
Sounds like you need to get a life derry. Do not spend your time or energy on things you have no control over. Good luck.
I have a debt free comfortable life. My degree is in economics but now it is simply a hobby that I find entertaining. I share what I learn. Most people learn from what I share, a few don't care to learn or want to argue about facts. As you have probably noticed, I don't let the few slow down my passion for the truth.
Natural forces of supply and demand are the best regulators on earth.
Then stop running away from it and let it catch up to you.
Knowledge is the enemy of fear
My dad warned me not to become an Econ major in school. "Everybody has an opinion even if it's wrong".
If you want to learn money, just watch how we run the company. Nobody can predict the future so if they say they can, why are they talking to you? Why aren't they on a south sea island?
Econ is the science of looking backwards.
18 months ago a tire cost me $66. Last week, $80. Will it return to $66 or go up to $100? Who knows. Should I buy an extra now or wait?
I go with Cramer Defcom 4
Actually folk are pulling money from their savings accounts and buying CDs and money markets and t-bills..
Knowledge is the enemy of fear
Income keeps going up. Maybe youd like a good recession like in 2001 or 2008 or 2020 to get those "real" wages higher?
Knowledge is the enemy of fear
Pulling money from a savings account and buying CDs and money markets doesn't affect savings at all since they are all part of the broader M2 money supply. The chart more accurately represents people initially saving stimulus checks, and then spending the windfall. But since some of the stimulus was maintained in household's savings balances, the chart actually does reflect that the remainder of households, and likely a majority of them, have dwindling savings.
Yes...I know that, but derryb doesn't. I've shown the M2 chart many times to illustrate how much money is floating around, but derry is trying to support his opinion that people are going broke by breaking savings out of M2. He contends this decline in savings is direct evidence of an economy and Americans being destroyed, which simply isnt correct.
Knowledge is the enemy of fear
I don't think @derryb is wrong wrt savings falling and a weakening economy. There are definitely cracks visible. The issue is that the Fed can "successfully" do whatever it takes to keep the system chugging along. Without going into a "P" word discussion, more than half of US households are now wards of the state (i.e., not paying any federal income tax). And, If Japan is an example, the central bank can ultimately go negative on interest rates and buy up the entirety of the equity and bond markets to prevent a short or midterm readjustment to quality of life. Probably not possible over the long term. So when a concept like capitalism is not allowed to function as intended, all kinds of extreme imbalances are allowed to exist for long periods of time. One thing that is making the economy look better right now is the fact that significant portions of the various Covid bill dollars were not spent during the past couple years. That money is providing new support to the economy now while making this year's reported deficit look almost manageable.
REUTERS: US needs to double its unemployment rate to fight inflation
However, "Fed officials insist this time is different - their preferred measure of inflation may have peaked already at just over 6%, for instance - and still feel inflation can be beaten without a substantial rise in unemployment or a recession." LOL
Inflation itself will fuel unemployment as higher prices for inventory and energy will shutter thousands of small business. Britain is proving this to be true. The higher end product prices to support higher costs will reduce patronage and jobs.
Natural forces of supply and demand are the best regulators on earth.
The world economies are failing around the US economy. Including the boogie man countries China and Russia. This climate is neither inflation by demand pull or supply push, but is certainly quickly becoming a nightmare for future US growth. Once the employment numbers become real, not politically massaged, the real discomfort in the USA will become overwhelming. There will be no way to avoid the reality of a severe economic downturn spiral onto a new plateau of lower living standards.
You'll wish you could get the jobs people eschew or elders can't handle anymore.
The uplifting commentary is brought to you by: Dig Ten Left Gold inc. , Zinc and Gutter mines.
Reset - Sept 21, 2 pm?
Natural forces of supply and demand are the best regulators on earth.
FedEx says it's a worldwide slowdown such that they are making adjustments, i.e. - here come the cutbacks & layoffs.
This whole thing is being engineered, don't BS yourself.
I knew it would happen.
The FED is attempting to create a rise in unemployment. Such will reduce demand on our currently supply driven inflation. Since the FED has no tool that can address supply side issues it must attempt to reduce demand in order to bring prices down. A decrease in available spending money is one of their inflation fighting tools.
Natural forces of supply and demand are the best regulators on earth.
Cardi B appears to know more about inflation than those who create and try to control it.
Natural forces of supply and demand are the best regulators on earth.
Raise those rates. I still don't see how higher prices curbs inflation.
It encourages most of us to pay down debt. Not our leaders.
The FED is attempting to create a rise in unemployment. Such will reduce demand on our currently supply driven inflation. Since the FED has no tool that can address supply side issues it must attempt to reduce demand in order to bring prices down.
It's a pre-engineered takedown of our entire economy. It's worse than 1979-1980 because of the massive leverage in the financial system from derivatives. If the bond market fails, there is no financial system or stock market.
I knew it would happen.
Only encourages paying down variable debt. Why would one pay off a 3% mortgage when they can get 4% in a CD?
Knowledge is the enemy of fear
In the real world , I think much of the debt is on credit cards. Those are not low interest loans.
No they surely are not, but credit card debt represents only about 6% of total household debt. 70% is mortgages.
Knowledge is the enemy of fear
Mortgage debt is investment debt in a solid investment that in most cases grows in value. Kudos to those fortunate enough to afford such debt. CC debt for consumables? Far from the same thing. Items are here today, gone tomorrow, while the CC debt for them lingers on with normally high interest payments.
Percentage of CC household debt is low, only when compared to mortgage debt. Take away the mortgage investment debt and recalculate your household CC debt percentage. You will be surprised.
Natural forces of supply and demand are the best regulators on earth.
Credit card debt is still less than $1 trillion. 25% have no debt.
Yes, those that buy consumable on credit card because they have no cash are in trouble, just as it always has been. This is still a very low percentage of the population. We understand your concerns, but it is not the massive problem many want to make it be.
Knowledge is the enemy of fear
Gutter peddlers have been calling for the end of the world since the day they started peddling the gutter metal. The USA remains economically strong. RGDS!
The whole worlds off its rocker, buy Gold™.
Bizzaro World. LOL
Natural forces of supply and demand are the best regulators on earth.
Yes at least we agree on something. LOL
The whole worlds off its rocker, buy Gold™.
quite the opposite. You live in a fantasy. What do they call people who have been fooled?
Natural forces of supply and demand are the best regulators on earth.
Gutter stackers?
The whole worlds off its rocker, buy Gold™.
Cultists
How's that grocery bill working out for ya?
Natural forces of supply and demand are the best regulators on earth.
The US economy is good now.
My wife does the shopping so I do not know.
I do know that I pulled halibut out of the freezer a couple days ago that I caught and made 2 meals for four people out of it.
My freezer is full of high quality fish.
This is a little hard based on the poll answers, my 401K is a 301K but my savings are still up and while I have noticed higher prices, they aren't really crimping what I do. We still travel, I still buy coins, my wife still gets shoes.
I used to work for another financial firm in which I made mega bucks (well more than now) but I wasn't happy. I make a little less now but I'm happier and can make more time off. I guess, its not all perfect, but I'm still ok.
My current registry sets:
20th Century Type Set
Virtual DANSCO 7070
Slabbed IHC set - Missing the Anacs Slabbed coins
@DerryB, I don't believe these charts are correct. I have access to real numbers (like from Moody's, Haver Analytics) and they don't look like this. For example the average savings rates are still higher any time other than the Covid lockdowns. I can't paste them though as we are not allowed to paste them outside of any internal documents. But I would not take the charts posted at face value.
My current registry sets:
20th Century Type Set
Virtual DANSCO 7070
Slabbed IHC set - Missing the Anacs Slabbed coins
@derryb said:
Not exactly. But markets have been responding more negatively the day after fed meetings. As long as the fed continues to do and say pretty much what markets expect (demand) there isn't much to initiate some sort of "reset". Look at VIX.... Fed rate increases,and threat of QT have cut stonk market valuations by 25% or so with very little volatility. I think due to all the algo trading and that fact that personal investing (mainly through 401ks, etc.) Is basically automatic, and there is always a bid.
Millions upon millions of new undocumented people know our economy is great. That's why they're flocking here. Look at how good it is, not how bad. Make room !
Nysoto said "The US economy is good now."
Well, I did get one agree on my sarcasm...BUT there are great and rare opportunities now, which could get "better" depending on a person's perspective. The S&P is down today 21.6% from the closing high in January. Get in at this point, and it will be a gain of 27.7% whenever the SP returns back to the January high. The sun also rises. I have been allocating more to SP in the last two sessions in my 401K, will increase the amount as the market declines. A rare opportunity for some guaranteed large gains.
S&P in for at least another 21.6% decline, likely more. Gonna make 2008 look like it was nothing. Yes I remain a complete pessimist when it comes to the FED fixing the problems it created. Sure it will eventually reduce inflation but not without a great price to the economy and to jobs. Personally, I look for the FED to pivot its current position as the weeks unfold. The FED knows only one cure - more funny money. They will continue to blow the crisis bubbles and paper them with money until it no longer works because they have destroyed the value of your dollars.
Natural forces of supply and demand are the best regulators on earth.
A rare opportunity for some guaranteed large gains.
I don't think we're there yet.
I knew it would happen.
Keep in mind that the Fed's QT effort is barely underway because there aren't enough maturing MBSs to roll off their balance sheet. It's not like they are,selling any bonds. Historical median TTM S&P500 PE ratios are around 15. A drop to that level at current earnings levels would give the S&P500 a 20% haircut from here. If indeed entering recession (does anyone still think we are not?) earnings might be expected to fall by 20%. In that case, at a PE of 15, S&P500 would be around 2,400. But why stop there...why shouldn't markets overshoot a bit on the way down too (capitulation?). Maybe a PE of 10 and S&P500 at 1600? Sure, most would say that is riduculous, but stonk market valuations arguably been at ridiculously high levels for most of the past 2+ decades, courtesy of profligate fiscal spending and a Fed that adopted artificially low interest rate policy. Only options now are to screw the masses with inflation, or claw back much of the paper gains and accept a recession. Debatable as to how severe it will be, but it is coming (if not already here)
Keep in mind that the Fed's QT effort is barely underway because there aren't enough maturing MBSs to roll off their balance sheet. It's not like they are,selling any bonds. Historical median TTM S&P500 PE ratios are around 15. A drop to that level at current earnings levels would give the S&P500 a 20% haircut from here. If indeed entering recession (does anyone still think we are not?) earnings might be expected to fall by 20%. In that case, at a PE of 15, S&P500 would be around 2,400. But why stop there...why shouldn't markets overshoot a bit on the way down too (capitulation?). Maybe a PE of 10 and S&P500 at 1600? Sure, most would say that is riduculous, but stonk market valuations arguably been at ridiculously high levels for most of the past 2+ decades, courtesy of profligate fiscal spending and a Fed that adopted artificially low interest rate policy. Only options now are to screw the masses with inflation, or claw back much of the paper gains and accept a recession. Debatable as to how severe it will be, but it is coming (if not already here)
Nice summary!
I knew it would happen.
@RobM said “Only options now are to screw the masses with inflation, or claw back much of the paper gains and accept a recession.”
Agree. Undoubtedly a bit of both. Powell clearly realizes the predicament he’s in. My guess is he’d be happy with 6-7 percent inflation for a few years and a 15 % further drop in equities.
Ukraine is still a huge wildcard.
If we survive the next ten years or so, I’m bullish!
Either way masses are already screwed by real inflation as well as the unemployment that is coming due to higher rates. Recession (by definition) is here. Those that don't agree will soon sing a different tune.
What happens when FED runs out of bullets?
Natural forces of supply and demand are the best regulators on earth.