Down goes the Dow

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Ghost of Igloi wrote:

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Sally Vix wrote:

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Ghost of Igloi wrote:

Market wasn’t closed when I posted. A “fact checker” should understand that.

Your fired for incompetence.

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"Your" is possessive. You are fired for ....

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Good job you finally posted something that makes sense.

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Ghost of Igloi wrote:

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Sally Vix wrote:

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Ghost of Igloi wrote:

Market wasn’t closed when I posted. A “fact checker” should understand that.

Your fired for incompetence.

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"Your" is possessive. You are fired for ....

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Good job you finally posted something that makes sense.

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Sally Vix wrote:

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Ghost of Igloi wrote:

Market wasn’t closed when I posted. A “fact checker” should understand that.

Your fired for incompetence.

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"Your" is possessive. You are fired for ....

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👹

GDP came in higher than expected (although still noticeably lower than last quarter). I think this will just be a minor downturn and we'll start making new highs soon, nothing to see here as long as the Fed doesn't piss in the punch bowl

Earnings continue to grow. Valuations are down. Consumer confidence, home prices, new home sales, and new residential building permits are all up.

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Mouth Breather wrote:

Earnings continue to grow. Valuations are down. Consumer confidence, home prices, new home sales, and new residential building permits are all up.

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So Racket, since it is a minor downturn, wouldn’t that put the Fed back in play?

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Racket wrote:

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Mouth Breather wrote:

Earnings continue to grow. Valuations are down. Consumer confidence, home prices, new home sales, and new residential building permits are all up.

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Uh, valuations are getting pretty high again and new home sales have been getting massacred over the past couple of months.

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Ghost of Igloi wrote:

So Racket, since it is a minor downturn, wouldn’t that put the Fed back in play?

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Mouth Breather wrote:

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Racket wrote:

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Mouth Breather wrote:

Earnings continue to grow. Valuations are down. Consumer confidence, home prices, new home sales, and new residential building permits are all up.

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Uh, valuations are getting pretty high again and new home sales have been getting massacred over the past couple of months.

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Sales of new single‐family houses in November 2018 were at a seasonally adjusted annual rate of 657,000, according to estimates released jointly today (February 26) by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 16.9 percent (±19.9 percent)* above the revised October rate of 562,000

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According to this source, when Jan and Feb are both up...the rest of the year has been exceptionally strong. Median full year return of 19% and the only real down years were during the Great Depression.

but that's just stats of course...weird outliers happen all the time.

https://twitter.com/OddStats/status/1100904222210453505?s=20

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Racket wrote:

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Ghost of Igloi wrote:

So Racket, since it is a minor downturn, wouldn’t that put the Fed back in play?

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What do you mean? Should a strong economy be able to support a tiny little interest rate hike? Maybe, maybe not.

As I have said before, I think this is all part of new economic and monetary theory being played out. I believe you think (correct me if I'm wrong) that it would be sensible to go back to the way things were : Fed with a minimal balance sheet, and Fed fund rates at a level that would be normal/neutral. I say there is no going back to that. Post-2008 was an irreversible change. Maybe it turns out to be sustainable and what we thought we knew about central bank actions in theory turn out to be wrong in practice. Maybe it cause the Greatest Depression. I don't see any reason why we can't continue as long as inflation doesn't get out of control. But the Fed is already talking about using other tools to control inflation other than raising rates

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Racket wrote:

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Mouth Breather wrote:

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Racket wrote:

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Mouth Breather wrote:

Earnings continue to grow. Valuations are down. Consumer confidence, home prices, new home sales, and new residential building permits are all up.

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Uh, valuations are getting pretty high again and new home sales have been getting massacred over the past couple of months.

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Sales of new single‐family houses in November 2018 were at a seasonally adjusted annual rate of 657,000, according to estimates released jointly today (February 26) by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 16.9 percent (±19.9 percent)* above the revised October rate of 562,000

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existing home sales have been declining fast yes. But new data suggests they have started to rebound.
https://us.econoday.com/byshoweventfull.asp?fid=499068&cust=us&year=2019&lid=0&prev=/byweek.asp#top

Existing home sales then. One of the home sales numbers has been tanking, I forgot which tbh

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agip wrote:

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Racket wrote:

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Ghost of Igloi wrote:

So Racket, since it is a minor downturn, wouldn’t that put the Fed back in play?

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What do you mean? Should a strong economy be able to support a tiny little interest rate hike? Maybe, maybe not.

As I have said before, I think this is all part of new economic and monetary theory being played out. I believe you think (correct me if I'm wrong) that it would be sensible to go back to the way things were : Fed with a minimal balance sheet, and Fed fund rates at a level that would be normal/neutral. I say there is no going back to that. Post-2008 was an irreversible change. Maybe it turns out to be sustainable and what we thought we knew about central bank actions in theory turn out to be wrong in practice. Maybe it cause the Greatest Depression. I don't see any reason why we can't continue as long as inflation doesn't get out of control. But the Fed is already talking about using other tools to control inflation other than raising rates

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The big change has been technology. Tech hasn't ended business cycles, but it has reduced their swinginess. Recessions happen when companies misjudge demand and store up inventories....with the internet and tech...inventories are far more in control.
Add the ability of tech to stop inflation in its tracks due to Amazonification and global markets, and there is a new paradigm. Yeah, things are different.

The problem is debt...the world has levered up a huge amount. The bull bet is that all the new trillions of dollars of wealth from developing nations will keep buying all that debt, no problem. And that has happened - there is huge demand for debt. But will that continue? Dunno.

As for why the markets freaked out at Fed actions...that's weird. I think it's the algos...they have probably analyzed the past and all the algos found that whatever the fed was doing was bearish historically, so they sold everything hard. Then had to flip back when markets changed. I dunno. I'm not sure people made the decisions that drove the markets down in December and up in Jan/Feb.

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Racket wrote:

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agip wrote:

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Racket wrote:

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Ghost of Igloi wrote:

So Racket, since it is a minor downturn, wouldn’t that put the Fed back in play?

---

What do you mean? Should a strong economy be able to support a tiny little interest rate hike? Maybe, maybe not.

As I have said before, I think this is all part of new economic and monetary theory being played out. I believe you think (correct me if I'm wrong) that it would be sensible to go back to the way things were : Fed with a minimal balance sheet, and Fed fund rates at a level that would be normal/neutral. I say there is no going back to that. Post-2008 was an irreversible change. Maybe it turns out to be sustainable and what we thought we knew about central bank actions in theory turn out to be wrong in practice. Maybe it cause the Greatest Depression. I don't see any reason why we can't continue as long as inflation doesn't get out of control. But the Fed is already talking about using other tools to control inflation other than raising rates

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The big change has been technology. Tech hasn't ended business cycles, but it has reduced their swinginess. Recessions happen when companies misjudge demand and store up inventories....with the internet and tech...inventories are far more in control.
Add the ability of tech to stop inflation in its tracks due to Amazonification and global markets, and there is a new paradigm. Yeah, things are different.

The problem is debt...the world has levered up a huge amount. The bull bet is that all the new trillions of dollars of wealth from developing nations will keep buying all that debt, no problem. And that has happened - there is huge demand for debt. But will that continue? Dunno.

As for why the markets freaked out at Fed actions...that's weird. I think it's the algos...they have probably analyzed the past and all the algos found that whatever the fed was doing was bearish historically, so they sold everything hard. Then had to flip back when markets changed. I dunno. I'm not sure people made the decisions that drove the markets down in December and up in Jan/Feb.

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All true. Global markets and efficiency are smoothing things out for sure. But recessions can still get triggered by big events like a 2007 housing bubble collapse. So I think inventory control is better but over-leverage and high risk is still in a lot of places.

You may be able to control your inventory but if you have a sh!tload of debt that you have to pay back then you have to sell a certain amount before you start defaulting.

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“Virtous cycle,” “Fed has your back” or “global synchronized growth” are catchy phrases spun to investors to make the market seem less risky. These things are often not true. I don’t think an economic cycle that cannot stand anything but cheap plentiful money has any virtue at all. It creates a lot of haves and have nots. Virtuous cycles are not the product of speculative excesses.

Igy

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Ghost of Igloi wrote:

“Virtous cycle,” “Fed has your back” or “global synchronized growth” are catchy phrases spun to investors to make the market seem less risky. These things are often not true. I don’t think an economic cycle that cannot stand anything but cheap plentiful money has any virtue at all. It creates a lot of haves and have nots. Virtuous cycles are not the product of speculative excesses.

Igy

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Ghost of Igloi wrote:

“Virtous cycle,” “Fed has your back” or “global synchronized growth” are catchy phrases spun to investors to make the market seem less risky. These things are often not true. I don’t think an economic cycle that cannot stand anything but cheap plentiful money has any virtue at all. It creates a lot of haves and have nots. Virtuous cycles are not the product of speculative excesses.

Igy

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