Down goes the Dow

'allo racket.

All good here - no unreasonably low-priced Italian beauties in my garage no. Had to spend the lira on other things unfortunately.

As Seattle mentioned I've been having fun reviewing predictions made at various times in the past and judging their predictive quality. Of course most have been bearish and wrong. Point is mostly to inoculate people from running away, scared by news o'the day. Because....stocks always go up. Right? Right?

Here's a good one from a year ago, Oct 16, 2022. Most economists thought we'd be in a recession but instead we have absolutely rip-roaring 3-5% real GDP growth. Ah economists.

WSJ 10/16/22:

The U.S. is forecast to enter a recession in the coming 12 months as the Federal Reserve battles to bring down persistently high inflation, the economy contracts and employers cut jobs in response, according to The Wall Street Journal’s latest survey of economists.

On average, economists put the probability of a recession in the next 12 months at 63%, up from 49% in July’s survey. It is the first time the survey pegged the probability above 50% since July 2020, in the wake of the last short but sharp recession.

Their forecasts for 2023 are increasingly gloomy. Economists now expect gross domestic product to contract in the first two quarters of the year, a downgrade from the last quarterly survey, whereby they penciled in mild growth.

On average, the economists now predict GDP will contract at a 0.2% annual rate in the first quarter of 2023 and shrink 0.1% in the second quarter. In July’s survey, they expected a 0.8% growth rate in the first quarter and 1% growth in the second.

Have you admitted to any of your smugness being erased?

I was notified yesterday my AARP Medicare Prescription Drug Insurance will increase from $28 to $53 a month in 2024. There are plenty of not so hidden costs to Fed deranged monetary policies and unhinged Government spending.

My drug plan went from @ $25 per month to $60 per month last year -- and I take no drugs!

So I just dropped it

Put another way the deficit has shrunk by 46% since Joe Biden took office. When is the last time the deficit shrunk that much?

Bond yields screaming higher, NVDA down 7% at one point this morning...you'd expect the market to be down a lot.

But as of noonish the market is green. I think that means there is a lot of underlying strength in the economy, despite higher rates. Great stuff.

To be crystal clear, I have no bet with Igy. I don't bet ever...not for money, not for clout...nothing...well, that's not ENTIRELY true. I HAVE put a few (and I really mean just a few) dollars ever in a slot machine for fun (won a little over $300 on one occasion and $25 on another, so I stopped both times up both times). I have also participated in an office lottery when it was big a few times and have purchased lottery tickets on occasion when the pot was crazy big. I would guess I've spent less than $50 ever on lotter tickets in my life.

I do not and have not had an idea where the S&P 500 would end up at the end of the year. Igy made a claim, and I'm just tracking it to see if he's right or not. I have not declared he will be wrong. I have not said the S&P 500 would be up or down or at any certain level. He said at or near 3,000 at year's end. We shall see if he's right or not. I will neither be right nor wrong since I made no claim.

Please explain the relationship.

Here is my post from 2/23/2023:

“The period of S&P 500 companies over earning has ended. Stimulus, low interest rates done, higher labor costs, margins shrinking. Last year 2022 GAAP EPS down to $171. I expect by Q3 2023 the previous 52 week number to be in the $150s. Hard to see a year end 2023 S&P 500 much above 3,000, even without a recession.”

Flagpole followed with “Permabear” whereupon I asked agip to bookmark for year end review. Flagpole made it a monthly review. Some months later I posted that the market is unlikely to hit 3,000 by year end with $Trillions in new Government stimulus but only delaying inevitable.

Here's a thread from Feb 2023 explaining why a recession was imminent. Instead, 8 months later, we are booming at 3-5% real GDP growth.

Game of Trades
@GameofTrades_
The same recession signals as in 2001 and 2007 are flashing again
An earnings contraction and recession seem inevitable
A 🧵 looking into the trifecta of recession indicators

Ah, $2 Trillion added to the deficit? Booming?

One week ago a lunatic troll was crowing about 4,400 and ATH by December 24th. Doesn’t look that way today, although we appear stuck in a 4,275-4,375 range.

"Sales prices increased at a slower rate than input prices, as businesses struggled to pass along cost pressures because consumers had grown more sensitive to prices. As a result, firms struggled to maintain desired profit margins." - Beige Book

For some reason the lunatic trolls are quiet today.

Meanwhile from Kelley Evans:

“It's official.

8% mortgage rates.

$400k house with 20% down costs $1000 more per month now than it did two years ago.

@DianaOlick @CNBC”

Actually one of them just made four consecutive posts.

That is funny, but also your post is written by the number one lunatic. The singular psycho that created multiple registered harassing handles.

Have you sought treatment yet?

That's about what it was when we bought our house. Like one loan office told us, don't worry about it, you could re-finance sometime in the hopefully near future.

As of August 2023, total federal debt was $32.6 trillion