Correct me if I'm wrong or if you think I'm wrong but fed will cut back to 0 in 2019, early 2020 and perhaps turn the QE faucet back on?
Might not be enough to stave off more severe pain but I doubt they just let the equity markets tank given how much of the recent economic growth is related to the spiking of asset prices via ZIRP. To do so would be welcoming a recession with open arms (even if unavoidable, I doubt you see such brazen non-intervention obviously)
One of these days gold/miners gonna catch a nice bid, perhaps when the fed capitulates.
Merry xmas SSSers
Might not be enough to stave off more severe pain but I doubt they just let the equity markets tank given how much of the recent economic growth is related to the spiking of asset prices via ZIRP. To do so would be welcoming a recession with open arms (even if unavoidable, I doubt you see such brazen non-intervention obviously)
One of these days gold/miners gonna catch a nice bid, perhaps when the fed capitulates.
Merry xmas SSSers
The market priced in 0 hike in 2019, Fed dot plot came in at 2 rate hikes in 2019. It's possible they will pause rate hike in 2019 if unemployment rate ticks up. The real damage is $50b/month autopilot liquidity unwinding. I don't think they would slow it down provided no credit-shock event. The bright spot could be 10-y T bond. If yield goes lower, we might see housing activities pick up again in 2019. It has been a dreadful year. No one wants to trade their ultra-low fix rate mortgages for a higher rate. We're seeing more listings in 3q - home prices are cheaper too comparing to 2-3 yrs ago.
There are still too much headwinds going into 2019 and Trump & The Fed are the biggest risk for the market.
The 10-year bull run is over. Near term bottom could be around 2200 - 2300. If it breaks below 2200, I think we're heading back to Trump pre-election level 1800s.
There are still too much headwinds going into 2019 and Trump & The Fed are the biggest risk for the market.
The 10-year bull run is over. Near term bottom could be around 2200 - 2300. If it breaks below 2200, I think we're heading back to Trump pre-election level 1800s.
You don't think that continued weakening of asset prices would just cause a recession? Reverse wealth effect?
Asset prices go down, debt levels stay the same, things get deflationary pretty fast. That was a underrated lesson of '08 that asset prices can't go down w/o a recession.
Also, oil is plummeting so inflation may not be a risk going forward. Could see that as another justification for cutting.
Asset prices go down, debt levels stay the same, things get deflationary pretty fast. That was a underrated lesson of '08 that asset prices can't go down w/o a recession.
Also, oil is plummeting so inflation may not be a risk going forward. Could see that as another justification for cutting.
The last cycle definitely benefited the ultra-wealthy but you get into 30%+ drop territory and that absolutely hits main street IMO. It isn't like people don't have 401k's, IRA's, retirement accounts, taxable accounts. The upper middle/professional class would likely pull back on consumption if they had to take that type of hit and they're a huge part of the economy. That's a big reason I think fed would reverse course and cut if there was further weakening.
Since the bull went on so long, more wealth has been built up compared to say before the last downturn (350% market gain vs around 100%) so when you get a 30-40% pullback, it's just a lot more actual money being lost to the investor as well.
Either way, should be an eventful 2019.
Since the bull went on so long, more wealth has been built up compared to say before the last downturn (350% market gain vs around 100%) so when you get a 30-40% pullback, it's just a lot more actual money being lost to the investor as well.
Either way, should be an eventful 2019.
Have a good one gents. May your God be with you.
The last time I got some cash in 2008 things went
up for a couple of yearsGot a moderate 5 figure pension pot cash in on 3rd Dec and... we get a market crash yet again?? lol
If it's the real deal then wait a few months until things look like total pants, then is the time to buy in
Our Tiz may show up but he seems to put a hex on a crash when he does lol
I guess the main point I'm trying to make is I don't think the market/main street economy can be as decoupled as you are perhaps insinuating Snoop.
Just feels like as the wealth effect buoyed economic growth, a reverse wealth effect will cause contraction.
That was really the main point I was trying to make that I haven't really seen discussed enough.
Just feels like as the wealth effect buoyed economic growth, a reverse wealth effect will cause contraction.
That was really the main point I was trying to make that I haven't really seen discussed enough.
'Wealth Effect' is Bernanke/Yellen playbook. I think it's very hard to pull any statistical/data if there is any to prove his thesis. He seems to pull it out of thin air. Market has gone up 300+% since the financial crash, we can't really argue the economy has gone up at the same rate. Most bets are concentrated on tech stocks. 2%-3% lower growth rate could tank the market by 30% or more.
In general, the Fed should look at unemployment rate, inflation, CPI...etc. Their job is to adjust liquidity in the system. They pump more $ in the system when it's showing signs of credit constraint, they withdraw it when the economy is overheat. How the stock market is performing is a sideshow.
Bernanke/Yellen has shown more empathy to the stock market, that's why they love them. Powell seems to play by the rule book. He is #1 enemy of the market right now.
This was all inevitable folks .. like the last two it was clearly a bubble and just a matter of when..
market due for a bounce soon but it will be bear market choppy stuff.. it will be another big one like 2000 and 2007.. this time the big problem is corporate debt.. many big corporations feasted on zirp policies for a decade to buyback stock and fluff their numbers
this one lasted a lot longer than I expected.. thought whoever got POTUS was gonna have to deal with bad economy/recession.almost immediately.. what happened though is trump/republicans did the insane thing and cut taxes and exploded deficits as well as got people/small businesses overly enthusiastic at a time they shouldn’t be doing so.. now it’s game over.. deficits explode more.. corporations mainly used it to fluff numbers and buyback stock at the worst time to do it.. no tax cut ammo left now so fallout will be worse..
us just done.. middle class is toast.. bubble creation and massive amount of debting is all we do anymore.. with each fed boom/bust cycle the average joe keeps falling further behind.. while rich get richer..
if you want to know the nitty gritty details of why this is all happening read hussman.. like me he was wayyyyy too early as far as timing of when this 3rd fed bubble burst..
his lastest bubbles and hot potatoes...
https://www.hussmanfunds.com/comment/mc181128/
market due for a bounce soon but it will be bear market choppy stuff.. it will be another big one like 2000 and 2007.. this time the big problem is corporate debt.. many big corporations feasted on zirp policies for a decade to buyback stock and fluff their numbers
this one lasted a lot longer than I expected.. thought whoever got POTUS was gonna have to deal with bad economy/recession.almost immediately.. what happened though is trump/republicans did the insane thing and cut taxes and exploded deficits as well as got people/small businesses overly enthusiastic at a time they shouldn’t be doing so.. now it’s game over.. deficits explode more.. corporations mainly used it to fluff numbers and buyback stock at the worst time to do it.. no tax cut ammo left now so fallout will be worse..
us just done.. middle class is toast.. bubble creation and massive amount of debting is all we do anymore.. with each fed boom/bust cycle the average joe keeps falling further behind.. while rich get richer..
if you want to know the nitty gritty details of why this is all happening read hussman.. like me he was wayyyyy too early as far as timing of when this 3rd fed bubble burst..
his lastest bubbles and hot potatoes...
https://www.hussmanfunds.com/comment/mc181128/
Trump and Powell are the fall guys..
Obama who was a complete puppet to the one party establishment/status quo + ben-yellen fed created the latest problem/bubble. That along with american citizens and corporations who were dumbenough to take the cheap debt bait and yet again create another massive bubble.
Obama who was a complete puppet to the one party establishment/status quo + ben-yellen fed created the latest problem/bubble. That along with american citizens and corporations who were dumbenough to take the cheap debt bait and yet again create another massive bubble.
Welcome back Tiz
Sadly I think this ends with a Socialist as our next President
I think the US view of Socialist and a real socialist policy(Any policy) are a bit different
Maybe a bit more Liberal would be more accurate
Even your Democrats are happy to leave tens of millions with no healthcare
Anyway, interesting times ahead methinks
Sadly I think this ends with a Socialist as our next President
I think the US view of Socialist and a real socialist policy(Any policy) are a bit different
Maybe a bit more Liberal would be more accurate
Even your Democrats are happy to leave tens of millions with no healthcare
Anyway, interesting times ahead methinks
The more I’ve contemplated this all the more I come to the conclusion all this stuff is just inevitable and part of human nature...
empires eventually grow too centralized and rot/brainwashed from within.. its hilarious watching the one party establishment freaking out about trump pulling troops from Syria and Afghanistan.. yet running nearly trillion dollar deficits while at full employment is perfectly normal..
capitalism not to blame.. free market capitalism hasn’t existed for long time.. system we have now is crony capitalism with a good deal of socialism tossed in..
but yeah thats where it’s all headed for us long term brucefan.. US becoming Mexico north.. middle class will continue to get eradicated.. and poor leftys/minorities etc can cheerlead their well polished well spoken Obama types as the status quo laugh their asses off and rich get richer...
libertarians like Ron Paul tried to warn and take over GOP but we got trump instead lmfao.. now it’s way too late and GOP is a complete joke.. the neocons (liberals basically) created a one party system of big always expanding government that was the end of the strong middle class US.. our foreign policy and the military industrial complex that eisenhowser warned us about is bankrupting us slowly but surely.. think we now past point of no return.. and massive societal inequality in the US is here to stay.
empires eventually grow too centralized and rot/brainwashed from within.. its hilarious watching the one party establishment freaking out about trump pulling troops from Syria and Afghanistan.. yet running nearly trillion dollar deficits while at full employment is perfectly normal..
capitalism not to blame.. free market capitalism hasn’t existed for long time.. system we have now is crony capitalism with a good deal of socialism tossed in..
but yeah thats where it’s all headed for us long term brucefan.. US becoming Mexico north.. middle class will continue to get eradicated.. and poor leftys/minorities etc can cheerlead their well polished well spoken Obama types as the status quo laugh their asses off and rich get richer...
libertarians like Ron Paul tried to warn and take over GOP but we got trump instead lmfao.. now it’s way too late and GOP is a complete joke.. the neocons (liberals basically) created a one party system of big always expanding government that was the end of the strong middle class US.. our foreign policy and the military industrial complex that eisenhowser warned us about is bankrupting us slowly but surely.. think we now past point of no return.. and massive societal inequality in the US is here to stay.
