“Even More Evidence of the Super Strong Consumer...Can't wait for credit card debt to hit $2.0 trillion. This spending is going somewhere and creating investment and trading opportunities - but this is not a sign of strength. More like a sign of depression.”
—Charles V. Payne
There is actually an interesting thing in that comment. People who are personally responsible with their spending see credit card debt going up as a very bad thing. I'm not fond of it myself and would not suggest that people do that. HOWEVER, what it signifies is that people are confident in their job security and the ease with which they could find another job if they needed to...so they spend more freely. This is NOT indicative of people not being able to pay their basic bills (heat, water, lights, mortgage, car payment).
There is another quote of his when he said best case was around 3000 and could be as low as 2000.
Proof? I do not DISBELIEVE you, but I will not BELIEVE you without proof as I never saw anything like that from him. Agnostic until you prove otherwise.
The Trump Administration Tax Cuts and Job Act signed into law December 22, 2017 cut the tax rate for corporations from 35% to 21%. This was a $2 Trillion annual gift to corporations and the wealthy, cutting the effective tax rate for corporation since enactment to about 18%. In one year the S&P 500 EPS jumped from a GAAP $109.89 to $139.47, reaching a high of $197.87 in 2021. Not surprisingly the annual deficit climbed from $665 Billion in 2017, to in subsequent years in Billions: $779, $984, $3,132, $2,775, $1,376, and this year a little under $2 Trillion. Gross Federal Debt went from $23.409 Trillion on 2/20/2020 to $34.012 Trillion today.
So laugh and joke as much as you like, since you are paying for this one way or another. Either through imbedded inflation, cuts to social services, or a lower standard of living. One thing for sure, the economy is no longer based on free market principles. There is an addiction to plentiful low interest credit, increasing the odds of malinvestment, and moral hazard, for individuals and corporations. It is some central planning economic hybrid, more similar to the Chinese model. It does not end well, and where we land in the S&P 500 is far lower than you can imagine. The social consequences are already apparent in societal behavior, the governors are gone, anything goes until it blows up, which it will. Unfortunately.
This post was edited 16 minutes after it was posted.
“Even More Evidence of the Super Strong Consumer...Can't wait for credit card debt to hit $2.0 trillion. This spending is going somewhere and creating investment and trading opportunities - but this is not a sign of strength. More like a sign of depression.”
—Charles V. Payne
credit card delinquency is rising yes but still at low levels historically. But clearly rising so could be an issue if it doesn't flatten out soon.
But overall consumer debt is absolutely not a problem. take a look at debt service/disposable income. Low levels and not rising.
S&P 500 EPS estimates continue to fall. Q1 2022 previous 52 week GAAP EPS came in at an all time high of $197.91, the estimate for Q1 2023 with 3.7% of the companies reporting has fallen to $171.83. I expect this number to continue to fall and be under at least $160 by year end. If so, this would imply a fair value of 2,560 for the S&P 500; $160 GAAP EPS x historic average multiple of 16 = 2,560.
DGTD Prediction Resolution! From 4/7/23
Igy said SP500 earnings would be around $160 which implied an SP500 at around 2560.
Numbers are in-ish...Factset says calendar 2023 earnings should come in at $219, and the SP500 is at 4764.
Although Igy will say 'factset doesn't use GAAP earnings' and maybe he'd be correct I dunno.
Imagine predicting in public that American consumer spending would have a 'big decline.' Good lord. We don't do that. Gutsy call though. And we didn't have a recession either.
Nick Gerli @nickgerli1 The Savings Rate just collapsed down to 2.2%, the lowest level ever. 📉 Means Americans are running out of money. Last time it was this low was 2006-07. Right before GFC. Major Recession Warning. Expect a big decline in consumer spending in 2023.
2) Uncool to kick a man when he's down. Do better.
I thought you two weren't talking. I must have missed a lot
I get tired of consistent nonsense, and so when that's been going on for a bit, I will ban for a while, no matter who it is. To be fair to Sally, he has not been too bad on a consistent basis lately...still with nonsense in there to be sure, but sufferable for the most part.
I thought you two weren't talking. I must have missed a lot
I get tired of consistent nonsense, and so when that's been going on for a bit, I will ban for a while, no matter who it is. To be fair to Sally, he has not been too bad on a consistent basis lately...still with nonsense in there to be sure, but sufferable for the most part.
Flagpole, I think you mean I have not been "insufferable." Does this mean I am back in your circle of trust?
NVDA is going to be rocking again this year, I think. It is up about 8% over the last 2 days. I would highly recommend you getting some.
It's one of my biggest holdings. And I've added a little more over the last couple of days.
Nice to see it breaking out since that brutal first week of the new year.
NVDA's PE is crashing by half-ish because its earnigns are growing so fast. Despite the stock being up 240% in a year. What a story. The smartest guy I went to HS with has worked there for 10-15 years...dude must be immensely wealthy by now.
And that is one reason indexing works....you own a piece of incredible performers like NVDA and you are forced to hold them. You don't have people saying 'don't buy stocks with triple digit price earnings ratios."
Anway...so the bitcoin ETFs are real things now. Have to think Coinbase is a short and BTC is a long now...I mean millions of investors are going to throw some money in that pot now that they don't have to worry about exchanges and whatnot. I probably will, although in small size.
Feel like buying Bitcoin? Go to Binance . Without KYC: MEXC The Rainbow Chart is not investment advice! Past performance is not an indication of future results. You can not predict the price of Bitcoin with a rainbow! It is m...
It's one of my biggest holdings. And I've added a little more over the last couple of days.
Nice to see it breaking out since that brutal first week of the new year.
NVDA's PE is crashing by half-ish because its earnigns are growing so fast. Despite the stock being up 240% in a year. What a story. The smartest guy I went to HS with has worked there for 10-15 years...dude must be immensely wealthy by now.
And that is one reason indexing works....you own a piece of incredible performers like NVDA and you are forced to hold them. You don't have people saying 'don't buy stocks with triple digit price earnings ratios."
Anway...so the bitcoin ETFs are real things now. Have to think Coinbase is a short and BTC is a long now...I mean millions of investors are going to throw some money in that pot now that they don't have to worry about exchanges and whatnot. I probably will, although in small size.
Talking about being helped by incredible performers. VTI (Vanguard Total Stock) is about 30% tech and had a return of 26% last year. A 26% return for 2023 despite 72% of S & P stocks underperforming last year. Their top holdings are all Mag 7 and tech.
Since 2009, they were down of course last year and 2018 slightly. 2011 and 2015 were slightly up but nothing to write home about.
It's one of my biggest holdings. And I've added a little more over the last couple of days.
Nice to see it breaking out since that brutal first week of the new year.
NVDA's PE is crashing by half-ish because its earnigns are growing so fast. Despite the stock being up 240% in a year. What a story. The smartest guy I went to HS with has worked there for 10-15 years...dude must be immensely wealthy by now.
And that is one reason indexing works....you own a piece of incredible performers like NVDA and you are forced to hold them. You don't have people saying 'don't buy stocks with triple digit price earnings ratios."
Anway...so the bitcoin ETFs are real things now. Have to think Coinbase is a short and BTC is a long now...I mean millions of investors are going to throw some money in that pot now that they don't have to worry about exchanges and whatnot. I probably will, although in small size.
I get tired of consistent nonsense, and so when that's been going on for a bit, I will ban for a while, no matter who it is. To be fair to Sally, he has not been too bad on a consistent basis lately...still with nonsense in there to be sure, but sufferable for the most part.
Flagpole, I think you mean I have not been "insufferable." Does this mean I am back in your circle of trust?
Isn’t “sufferable” the same as “not insufferable”?
I get tired of consistent nonsense, and so when that's been going on for a bit, I will ban for a while, no matter who it is. To be fair to Sally, he has not been too bad on a consistent basis lately...still with nonsense in there to be sure, but sufferable for the most part.
Flagpole, I think you mean I have not been "insufferable." Does this mean I am back in your circle of trust?
1) I meant what I wrote. You have been SUFFERABLE for the most part. If you don't know what that means, go look it up.
2) You think that Donald Trump is a reasonable enough person to be President of the United States, so you could never be in my circle of trust until you stopped with that nonsense.
unusual_whales @unusual_whales The Fed may do a policy U-turn and slash interest rates as soon as year-end, because a recession almost here, J.P. Morgan, $JPM, Asset Management's CIO has said. 6:31 AM · Sep 18, 2023 · 379.1K Views
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