Down goes the Dow

Big,

The post following yours is not mine.

1. Low interest rates have driven both the automobile and industries.

2. Gains in low quality jobs has driven a weak labor market recovery. It has been a theme for presidential candidates in both parties.

3. Labor participation has gone down as individuals have opted for transfer payments in lieu of returning to the labor force.

4. GAAP earning for S&P 500 companies have declined 18% in 15 months.

5. Business inventories have risen to the highest level since May of 2009.

I am concerned you have a hopium addiction.

Igy

Ghost of Igloi wrote:

OK, Sally V is actually a "he." The Caitlyn Jenner of Down goes the Dow.

Igy

an ill-advised and unfortunate attempt at humor

an apology is in order

if you are referring to the high cost of farmland prices, it's because it is seen as a safe option. People that used to invest in bonds have taken that money out and put it into farmland. Also some land is being sold more as a hunting/fishing property than just straight farmland. If you get 6-8 investors on a piece of ground, each one has a smaller start up fee so they can tend to over bid.

today's econ news:

Mortgage apps continue to scream upwards - +33% y/y

CPI core up a surprising 2.3% - strong inflation? what?

Housing starts +5.2% but permits down 3.1%.

Industrial Production -0.5% m/m - that appears to be a poor number

So we're getting some inflation...should make the Fed's job easier.

No quarter given with her/his #igydidthisorthat.

Igy

#ignoreigy

#transgendersupport

#donthateontransgenders

#ignoredopes

#buymorechk

#freeigy

agip wrote:

Maserati wrote:

agip, (and I mean this in the best way), you are a fool, a dupe, a chump. You are twisting in the wind. Surely you must have some insights from your own knowledge, from your own activities, from your own economic involvement and from those you know. Your constant recitation of, and faith in the meaning of, published numbers, is frankly an embarrassment.

yes, yes, I should use anecdote and hearsay instead. . Absolutely.

17 trillion of GDP is pretty much captureable by just looking around and listening.

And look at all the career government statisticians who have confessed to "manufacturing" numbers after being pressured by politicians. It's rampant. All over the place.

You want a battle of figures and sources?

WTF are YOU talking about?

And just what makes you think that data collected by third parties is any more valid than that you discover personally? Your attempt to trivialize it as "anecdote" falls flat, and your characterization of it as "hearsay" is laughably incorrect. You apparently have no idea what hearsay is.

17 trillion? Do you really believe that your vaunted 3rd parties and gov't look at it all? Or, rather, do they sample?

Lastly, the bureaucrats work at the behest of politicians, not "the people". Surely you can't be so naive. Apparently you have never worked in government, or if you have, you were in a very low position and completely oblivious to the workings of the machine at higher levels.

You've gone completely off the rails. Seriously. I used to think that you were mostly rational, but that opinion is quickly changing.

Meanwhile, those of us involved in the ACTUAL economy await the Fed news today, because it affects our cost of doing business, while those of you who do essentially nothing but hand-wring and transfer things from the left pocket to the right pocket will be essentially totally unaffected.

You know, at least Flagpole is straight up about it--he doesn't even pretend to care about things. He just counts on history showing that, over longer terms, the markets have always risen. You, OTOH, seem to believe that you actually have some sort of handle on what's in fact going on at different levels and locations in the aggregate economy, because you believe in the veracity of the information you receive from the self-interested.

You are the perfect chump, the perfect dupe. Let me ask you this: when presented with conflicting evidence, facts, and figures about a particular economic condition, how do you resolve that conflict?

Maserati,

It is easier for most to follow an optimistic narrative. It is less challenging and removes conflicts in decision making. One can follow the narrative pushed by Wall Street, or one can challenge views, that at this stage of the economic cycle, are often wrong.

Igy

Igy, the markets have been edging upward for a couple of months now, and yet I see no hint of any kind of change in perspective in your writing. Not suggesting you are right or wrong, but I am wondering, do you weigh the ACTUAL performance of the markets in your analyses (and in other words tweak your expectations based on evidence, following a Bayesian approach, if you like), or are your expectations more or less completely divorced from market behaviour and only connected to the various myriad factors you've concluded have a cause-and-effect relationship with market performance?

I hope that doesn't come across as critical. It's intended as a pointed question, but not in a judgemental way. It strikes me that you are firmly fixed in preconceived expectations, and you are seeing your expectations fulfilled, subjectively, the heck with the objective evidence of what's really going on.

Of course maybe I'm jumping to conclusions on the basis of too short a time frame; maybe we need to look 12, 24 or 48 months into the past or future, not just a couple...

long time,

Good question. The market has gone up, but that has little correlation where it will go from here.

The willingness of investors to chase a market that is fundamentally in decline is nothing new. However, there are clear indications that market participants on becoming more cautious. That is a clear change in behavior from lets say the fall of 2014. You see that in junk bond spreads widening, you see it in the decline in IPOs, fall in valuations of Unicorns, drop in valuation for high multiple story stocks, and general market performance over the past year.

On a fundamental level S&P 500 earnings have fallen from a high of $105.95 per share (9/30/2014) to $86.47 (12/31/2015). During that same period PEs have increased from 18.61 to 23.64. If the market has risen in expectations of rising earnings, it also has the ability to fall based on falling earnings expectations. Recently, we have seen several Wall Street firms lower there expected S&P 500 earnings as well as their year end index price targets. Wall Street is typically slow to reduce targets in face of changing data. It's bad for business to be pessimistic.

I look at these facts and conclude that the market will face a severe downturn, and the reasons to support that view have risen over the last couple of months. I believe it is typical investor behavior to bend down to pick-up the market's last pennies before being rollover by a steamroller.

Igy

I really don't get your anger about this.

But alas. You feel you are too smart to trust anything. So be it.

I've found some of the lowest IQ people I know are the ones who think the world is full of conspiracies and ethically challenged 'big boys' who are out to steal from them. You know, like Trump supporters.

How do I resolve conflictory data? I flippin' live with it. I understand the difficulty of collecting data over a 17 trillion dollar economy and recognize that they will not always make sense or be accurate.

You know, accept that we live in a big complicated world. And I markedly do NOT assume that thousands of career economists are compromised and lie. Yes, the data are estimates. NO I don't think numbers are deliberately changed for political purposes.

I think we would have heard from many whistleblowers if that were the case.

Love your anger and insults man. Go to it.

long time,

Yesterday Jeffrey Snider of Alhambra Investment Partners discussed some of these same valuation versus market performance issues in this piece.

http://www.alhambrapartners.com/2016/03/15/bubble-cycle-inefficiency-and-valuations/

Igy

"But alas. You feel you are too smart to trust anything."

"think the world is full of conspiracies"

"I markedly do NOT assume that thousands of career economists are compromised and lie"

"NO I don't think numbers are deliberately changed for political purposes."

Incredibly, you have entirely missed the point of the post. Leave the thin skin behind, and read the post again. I can see that you have no real understanding of data collection and analysis, or the political process, but that's not what is irksome; what is irksome is that you believe that you do, while at the same time you post nonsense, in the truest sense of the word. You are not making a response in a discussion--instead, you are engaging in a haranguing diatribe.

This is evident from your entire post, but in particular from this absurd non-answer:

"How do I resolve conflictory data? I flippin' live with it."

The only conclusion to be drawn from this is that you do not in fact resolve contradictions, and therefore that you do not use the data at all.

It's a good thing for you that there is a structure to support your activities. You will do OK as long as the structure is there, and you will meet disaster the minute it falls apart. We have seen your frailty on display even during the recent 15% drop, when you almost went to pieces, and on numerous other occasions that were even less significant. This shows that in your heart of hearts, you understand that you have no leg to stand on, that you are just being carried by the current.

Note that I was correct (again) about what would be said about inflation.

A bunch of us are going out to a bar to watch the Fed announcement. Great fun for all! What a bunch of losers, right?

See you all on the other side.

Maserati,

Janet knows she should move but is afraid.

Igy

well whatever blows you are trying to land are not making any impression.

Would it be too much to ask you to point to my "nonsense"? Or would that be too hard?

First it was the trolls. Now it's the conspiracy theorists. I guess it's too much to expect some sanity given who started the thread. At least agip seems to be somewhat lucid.