Down goes the Dow

Stew wrote:

seattle prattle wrote:

Not seeing that as all too likely.

Agree that it is quite unlikely.

Fed is predicting pretty big upticks in inflation and rates aren't gonna budge above zero. I could see it, maybe not by April, but certainly possible by early Q3.

Dr. Racket wrote:

Stew wrote:

Agree that it is quite unlikely.

Fed is predicting pretty big upticks in inflation and rates aren't gonna budge above zero. I could see it, maybe not by April, but certainly possible by early Q3.

I thought the whole idea of keeping rates low was to keep inflation in check. No?

Stew wrote:

Dr. Racket wrote:

Fed is predicting pretty big upticks in inflation and rates aren't gonna budge above zero. I could see it, maybe not by April, but certainly possible by early Q3.

I thought the whole idea of keeping rates low was to keep inflation in check. No?

The whole idea, at least as I understand, is to rocket launch inflation to the moon and basically inflate ourselves out of an economic crisis.

Dr. Racket wrote:

la gente esta muy loca wrote:

You forgot the obligatory retort; OK Boomer.

It would be uncouth to deride someone who is actually, obviously sick. I personally hope Igy gets the care he needs.

gold down 2%

BTC up 7%

That sounds related. Maybe BTC is the new risk hedge. Or something.

agip wrote:

gold down 2%

BTC up 7%

That sounds related. Maybe BTC is the new risk hedge. Or something.

Welcome to 2020 v2

Dr. Racket wrote:

agip wrote:

gold down 2%

BTC up 7%

That sounds related. Maybe BTC is the new risk hedge. Or something.

Welcome to 2020 v2

Imagine waking up today after a year's nap.

Stocks up 23%

Bonds up 6%

And not knowing about the pandemic, sedition, two impeachments, 35% drop in markets...

What a world. So rich and reslient.

agip wrote:

gold down 2%

BTC up 7%

That sounds related. Maybe BTC is the new risk hedge. Or something.

Of course that “something” couldn’t be an unsustainable massively insane bubble.

agip wrote:

Dr. Racket wrote:

Welcome to 2020 v2

Imagine waking up today after a year's nap.

Stocks up 23%

Bonds up 6%

And not knowing about the pandemic, sedition, two impeachments, 35% drop in markets...

What a world. So rich and reslient.

Imagine waking up from a nap after 9/02 when SPY and QQQ had hit their ATH. I tell you that after a correction; QQQ -12.75% and SPY -9.8%, they are now back at ATHs. SPY is up 6+% and QQQ is up 5+%. Yet, AAPL is about where it was on 9/02; MSFT -5%, AMZN -10%, FB -12%, NVDA -7% and Alphabet is up a little over 3% !

agip wrote:

gold down 2%

BTC up 7%

That sounds related. Maybe BTC is the new risk hedge. Or something.

That something:

la gente esta muy loca wrote:

agip wrote:

Imagine waking up today after a year's nap.

Stocks up 23%

Bonds up 6%

And not knowing about the pandemic, sedition, two impeachments, 35% drop in markets...

What a world. So rich and reslient.

Imagine waking up from a nap after 9/02 when SPY and QQQ had hit their ATH. I tell you that after a correction; QQQ -12.75% and SPY -9.8%, they are now back at ATHs. SPY is up 6+% and QQQ is up 5+%. Yet, AAPL is about where it was on 9/02; MSFT -5%, AMZN -10%, FB -12%, NVDA -7% and Alphabet is up a little over 3% !

Don't forget to add that the resiliency of the SP500 now hinges almost entirely on TSLA

Maybe the "bubble" was never really a bubble.

Maybe it's just that society gets the most GAINZ when the government implements this inflationary policy to combat the natural deflation that would occur because of technology gainz and demographic contraction cycles.

When the flow of money is fast (higher inflation) people/companies want to spend it. So the rate of mutation of humanity is faster. Yes some people get rekt harder in this, but the cream rises to the top faster. Whereas deflation, the cream would rise to the top but it would take longer to do so.

BTC is a purely deflationary asset existing in an inflationary world. Therefore an individual's wealth will increase by putting inflationary fiat into it.

Other deflationary assets are the stocks of companies that are in tech. Their technological advances are deflationary. If you put inflationary fiat money into it, you will increase nominal wealth.

This is my grand theory^

Dr. Racket wrote:

la gente esta muy loca wrote:

Imagine waking up from a nap after 9/02 when SPY and QQQ had hit their ATH. I tell you that after a correction; QQQ -12.75% and SPY -9.8%, they are now back at ATHs. SPY is up 6+% and QQQ is up 5+%. Yet, AAPL is about where it was on 9/02; MSFT -5%, AMZN -10%, FB -12%, NVDA -7% and Alphabet is up a little over 3% !

Don't forget to add that the resiliency of the SP500 now hinges almost entirely on TSLA

More so for the Qs than the SPY. Besides the obvious, TSLA ( up over 90+% since 9/02 ) being over 5% of NASDAQ 100 to less than 2% of SP500, the sector composition of the indexes comes into play. The QQQ is over 63% Tech and ConsDisc ( TSLA and AMZN ); toss in Communication ( FB and GOOGL ), now you have over 82%of the index. These 3 sectors are 47% of SP500. Since 9/02; XLF is up 21+%, XLE 18+%' XLB 16+% and XLI 12+%. These 4 sectors are 27+% of the SP500 and only 5% of NASDAQ 100. Thus, if this sector rotation continues, the SPY could weather a major drop in TSLA's price.

Depends on what you spend it on. Asset hoarding essentially becomes the same danger. The Fed is still trying to figure out why inflation never took off despite 12 years of low rates and record unemployment. Globalization? Tech? Loss of velocity through asset hoarding?

The problem with your theory is the only value in any asset would be the ability to sell it at a higher price. All you are doing here is posing a poorly constructed theory (no offense intended) to justify the bubble. I suppose one can continue to come up with all sorts of constructs why this is rational and in society’s best interest, where on the other hand many of the supporting facts say it is not. Social unrest being just one of them.

Pretty simple, low interest rates and amply liquidity lead to malinvestment. Consumption goes up, savings go down, GDP growth requires incremental stimulus to stay at the same level. Poor business models that would normally be wiped out are able to live another day only in the end to disappear.

Test

During my coaching days I rebuilt the engine on a 1983 Renault Alliance. After I connected everything, had it running fine, suddenly it would not start. Now I was into my cross country season, and at various times looked at other diagnostic possibilities. After some time the one of the most obvious problems became apparent. A wire needed to be crimped on an electronic fuel injection module.

Ghost of Igloi wrote:

All you are doing here is posing a poorly constructed theory (no offense intended) to justify the bubble.

Oh, the irony!