One word...stagflation.
This likely is a market that will keep going down until it plateaus. But don't look for much of a quick bounceback because the fundamentals in the economy just aren't there right now.
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One word...stagflation.
This likely is a market that will keep going down until it plateaus. But don't look for much of a quick bounceback because the fundamentals in the economy just aren't there right now.
Part of the definition of stagflation is high unemployment, and that usually means there are too few jobs available for the workforce seeking jobs. That is not the case right now, there are plenty of jobs, just too few people with a work ethic. Now, this might manifest the same as a traditional low employment economy, but in this case it is self-inflicted.
Yes, inflation is high, and if the general populace lacks sufficient means to consume then the economy will be stagnant. There is also the supply chain issue, which means a lower volume of goods/products are reaching the retail market, thus demand > supply yielding higher prices. But why is there a supply chain issue? We didn't have such a problem last year or the years before. At least not at this level. It stems from the lack of workers in the supply chain (and elsewhere) because of liberal policies re: free money to stay home which all is rooted in the extreme over-reaction to the China virus (hoax? exaggeration? call it what you will...) and that was rooted in an attempt to crush the economy during 2020 to hurt Trump's reelection bid.
But now, the generated problems becoming real, we have a doofus and clueless morons who are making it worse with anti-American policies. In other words, the Dems (libs) unleashed an economy-killing monster designed to hurt Trump, but the monster has grown beyond their pathetic ability to rein it in. Reminds me of the Sherlock Holmes story, "Hound of the Baskervilles," the idiots who created/released the killer hound lost control of it and it turned on them.
As for the market, yes there is a measure of over-reaction but a lot of that is triggered by the computer-driven automatic market-makers, and those with a handle on it, get swept along. In fact, watched a segment this morning (about 4am our time) on Bloomberg when the far east markets were opening, and a trader said his firm had already began selling in anticipation of the mechanical sell-off to come. They didn't want to sell but knew what was going to happen...and it did today.
It is really simple. When the fed injects liquidity into the system and then takes interest rates down P/Es go up. And then when the fed withdraws liquidity and increases rates, P/Es go down. Like clockwork.
That is why they say don’t fight the fed.
That's exactly what I thought, but now that I find myself agreeing with you I must re-evaluate my thoughts. I must have missed something.Quote:
Originally Posted by Guisslapp
You did miss the part about how injecting too much liquidity into the system also eventually causes inflation (of which inflated asset prices are just one component), which can only be addressed by raising rates aggressively. I will assume you disagree and I can feel comfortable with that bit of analysis.
Biden's been a total failure and idiot, but I don't blame him (alone) for the inflation. Thank heaven the BBB stupidity didn't pass.
Guess you can be right about something.Quote:
Originally Posted by DawgyNWindow
Too much liquidity does cause inflation, as does other things (like global supply chains being compromised) - but knowing how much liquidity is “too much” in an environment like we just went through is hard to know.
Some real data. US Purchasing Manufacturers Index.
United States Manufacturing PMI | 2022 Data | 2023 Forecast | 2012-2021 Historical (tradingeconomics.com)
Exact numbers are hard to know, but in a general, macro view it was blatantly obvious! Many folks were advocating to stop the enhanced unemployment benefits, and that the last and second-to-last stimulus (Virus stay-home checks), should not be issued. Biden et al don't care about what is actually good for the country as they are trying (and mostly failing) to reinvent this nation. From the time of obummer's stimulus checks, the printing of new money, we have had one foot dangling over the inflation cliff, and the other slipping... I am surprised it took this long for inflation to appear. Some of that is thanks to Trump who created tons of new jobs and grew the economy, but now the blithering idiot Sleepy Joe has no answers.Quote:
Originally Posted by Guisslapp
The true reasons for the current economic mess has been well-documented as the talking heads on many, many networks have been outlining.
And there are lots of other things that cause the stock market to drop as well, and many of those are directly related to your hero (like paying folks not to work and removing people from the workforce because they do not comply with an unconstitutional/dictatorial vaccine mandate). But I thought we were talking specifically about Fed policy as a factor.Quote:
Originally Posted by Guisslapp
my god, this country misses trump!!Quote:
Originally Posted by friscodawg
Nominal GDP can’t run at 10% forever. That isn’t sustainable. Reversion to the mean is inevitable.Quote:
Originally Posted by FriscoDawg
Thought this is interesting...
for the calendar year 2021 billionaires like Musk, Bezos, and Suckerberg lost many $billions, but good, old Warren Buffett had a net gain to his net worth of $1.3 billion.
Musk's net worth went from $275 billion down to $245 billion...net loss of $30 billion. Not that he's hurting financially :rolleyes:. Bezos and Suckerberg lost around $20 billion or so. Doesn't mean a whole lot, just found it interesting.
BTW, old man Warren Buffett is down to being the 11th richest man in the world. But slow and steady has always been his mantra, not being a flash in the pan. We can all learn a lesson from Buffett, slow and steady works. And for most of us, time is our only real ally...unless you invent something or stumble into some new hot trend. Good luck with that! You younger folks out there, if you are not invested in the stock market, in some capacity, do yourself a favor and get in. There are good "safe" options and alternatives, and they will grow and give you a good return, in time.
When I look at my investments the only regrets I have is I didn't invest more.
US Trade Deficit surges to record breaking high in 2021; breaking $1 trillion
December 2021 was the first month where the trade deficit broke $100 billion; a record high. The deficit appears to be growing month to month.
quote:
US Trade Deficit in Goods Surges to Record High, Breaks $1 Trillion
LINK
The U.S. trade deficit in goods rose in December on the back of an import surge to hit a monthly record high, while bringing the total shortfall for all of 2021 to over $1 trillion, also a historic first.quote:Let's go Brandon!!!
Since trade deficits subtract from economic output in GDP calculations, the Commerce Department’s figures suggest a softer print may be in store for U.S. economic growth numbers for the fourth quarter when those are released later on Thursday.
Posts about the goofy Biden effing things up belong on other threads. Want to keep this thread "clean" and that means no mentions of Biden et al. :shocked2:
But, yes there is a connection to the stock market and thus investing. Under Trump the US was a net exporter in energy and our trade deficit/surplus situation was pretty dern good. Amazing how fast Brandon has destroyed this country.
Interesting that it took Musk less than 1/3 the time to amass 3 times the wealth as Warren Buffet.Quote:
Originally Posted by dawg80
Funny how you misinterpret what this means. This means the American consumer is stronger than the consumer outside of America.Quote:
Originally Posted by FriscoDog