Down goes the Dow

Earnings growth may improve, but there is very little actual demand growth sans stimulus. Furthermore, cost of capital, labor, and materials are all going up.

Ghost of Igloi wrote:

Earnings growth may improve, but there is very little actual demand growth sans stimulus. Furthermore, cost of capital, labor, and materials are all going up.

I dunno man.

Seems to me the trillions of dollars people have saved will be put on the barrel head and traded for goods and services. That's not stimulus...that's saved money from not going on vacation or out to dinner.

Airlines being slammed by unexpected rises in demand:

"The speed of this recovery based on the forward bookings they are seeing is much stronger than they even thought they planned for," says Dennis Tajer, a pilot and spokesperson for the Allied Pilots Association union.

"It's unfortunate because it's a possible sign they may not be ready for the recovery in full measure."

That money is not earned. It is not productive. Far different model than one where the nation increases productivity and saves for the future. This model on the other hand, is based on trying to increase consumption by handouts, and hoping not to increase input costs. I am not sure there will be inflation in a traditional sense, but asset inflation is clearly high by any standard.

Ghost of Igloi wrote:

That money is not earned. It is not productive. Far different model than one where the nation increases productivity and saves for the future. This model on the other hand, is based on trying to increase consumption by handouts, and hoping not to increase input costs. I am not sure there will be inflation in a traditional sense, but asset inflation is clearly high by any standard.

Not even close and it's hilarious someone can be so far off base to be honest. The government basically curbed people's sh!tty spending habits for them last year. On top of that, people with investments have seen ludicrous returns YoY.

Middle class people have a sh!tload of money. Most of the "handouts" were in the form of unemployment benefits and checks to moderate income households. A lot of middle and upper middle class families are sitting on more money than God right now and with interest rates so low, it's easy to take out debt. You can buy a new car or boat on a loan almost for free right now

Like Dogecoin and GME. 😹Investment, in productive assets in the new world of millennial and Fed economics.

Ghost of Igloi wrote:

Racket, PhD wrote:

Not even close and it's hilarious someone can be so far off base to be honest. The government basically curbed people's sh!tty spending habits for them last year. On top of that, people with investments have seen ludicrous returns YoY.

Middle class people have a sh!tload of money. Most of the "handouts" were in the form of unemployment benefits and checks to moderate income households. A lot of middle and upper middle class families are sitting on more money than God right now and with interest rates so low, it's easy to take out debt. You can buy a new car or boat on a loan almost for free right now

Like Dogecoin and GME. 😹Investment, in productive assets in the new world of millennial and Fed economics.

Get screened for dementia. Early intervention is critical. You need serious help

Ghost of Igloi wrote:

Racket, PhD wrote:

Not even close and it's hilarious someone can be so far off base to be honest. The government basically curbed people's sh!tty spending habits for them last year. On top of that, people with investments have seen ludicrous returns YoY.

Middle class people have a sh!tload of money. Most of the "handouts" were in the form of unemployment benefits and checks to moderate income households. A lot of middle and upper middle class families are sitting on more money than God right now and with interest rates so low, it's easy to take out debt. You can buy a new car or boat on a loan almost for free right now

Like Dogecoin and GME. 😹Investment, in productive assets in the new world of millennial and Fed economics.

I suppose there is a downside...that most Americans will spend their savings and then be back to living on credit and paycheck by paycheck. Which isn't bad...but the spenddown of plague savings is a one-time thing.

Although sure, it will stimulate the economy and we hope snowball into rising demand for some time.

agip wrote:

Ghost of Igloi wrote:

Like Dogecoin and GME. 😹Investment, in productive assets in the new world of millennial and Fed economics.

I suppose there is a downside...that most Americans will spend their savings and then be back to living on credit and paycheck by paycheck. Which isn't bad...but the spenddown of plague savings is a one-time thing.

Although sure, it will stimulate the economy and we hope snowball into rising demand for some time.

The pandemic showed that narrative was way overblown for much of the middle class. The people actually in danger got a good safety net in place quickly with larger unemployment benefits while the rest of America bankrolled their paychecks at a rate like never before.

This could go down in history as a time when the government got fiscal and monetary policy correct, and they had a very short time to do it

Racket, PhD wrote:

agip wrote:

I suppose there is a downside...that most Americans will spend their savings and then be back to living on credit and paycheck by paycheck. Which isn't bad...but the spenddown of plague savings is a one-time thing.

Although sure, it will stimulate the economy and we hope snowball into rising demand for some time.

The pandemic showed that narrative was way overblown for much of the middle class. The people actually in danger got a good safety net in place quickly with larger unemployment benefits while the rest of America bankrolled their paychecks at a rate like never before.

This could go down in history as a time when the government got fiscal and monetary policy correct, and they had a very short time to do it

will take a while to determine if the added debt was worth it.

depends on interest rates and growth. If we can grow out of this debt problem, fine. But I do think we're living in a fantasy land of believing interest rates will always be low.

And we all know that as soon as the Rs are in charge again they'll lower taxes, spend trillions and create another giant debt hole.

It's not like we're done with debt. But at least the Ds want to raise taxes to pay for it.

Pres DeSantis will lower taxes to prove he's not a RINO, and then debt will skyrocket again, even if the economy is solid.

Can't go on forever.

Racket, PhD wrote:

Ghost of Igloi wrote:

Like Dogecoin and GME. 😹Investment, in productive assets in the new world of millennial and Fed economics.

Get screened for dementia. Early intervention is critical. You need serious help

Get screened for hubris and can help avoid personal and investing mistakes.

Ghost of Igloi wrote:

Like Dogecoin and GME. 😹Investment, in productive assets in the new world of millennial and Fed economics.

Am I the only one who doesn’t understand this?

wondering wrote:

Ghost of Igloi wrote:

Like Dogecoin and GME. 😹Investment, in productive assets in the new world of millennial and Fed economics.

Am I the only one who doesn’t understand this?

Translation: Fake market based on unsustainable premises and lack of fundamentals, like crypto and a created short squeeze.

seattle prattle wrote:

wondering wrote:

Am I the only one who doesn’t understand this?

Translation: Fake market based on unsustainable premises and lack of fundamentals, like crypto and a created short squeeze.

or just look up 'financial engineering.'

bears tend never to see any growth as 'organic' and real, based on actual demand from the economy.

for decades, bears have dissed the US economy, saying it's just a bubble, boosted by Fed printing money, fiscal stimulus and a general 'kids these days' attitude.

Seeing fake money being created by things like dogecoin, then moved into the 'real' economy. Fine, until it collapses.

And to be fair, when you learn about the Federal Reserve system....it's completely absurd:

Government spends too much and needs money

Fed prints the money, loans it to the government

Government pays interest to the Fed

Fed remits the interest back to the government

A perfect cycle.

It...just...doesn't...make...any...sense. How long can that be sustained?

Agip, good stuff.

Would you consider adding CLEAN ENERGY to the tracker you routinely post? Yes, you have energy, but clean energy moves quite differently. For example, in the last post you did just yesterday, Energy was -1 for the month, and I look up Clean Energy (QCLN, for example) and it is up about +5% in that same timeframe.

FWIW, I'm opening position in Clean Energy. It is up well over 200% in a year!

Sold my bitcoin due to its environmental impact. From a recent article: "According to one source, a single bitcoin transaction uses the same amount of power that the average American household consumes in a month." (link avail. upon request).

ok will add that index

I read somewhere that the energy consumed by BTC basically erased the environmental benefit of moving over to sustainable energy.

Hard to believe - not sure I do. But it's a massive amount of energy.

What a freaking disaster.

i know, right!

I read one rebutal as a Forbes article but overwhelming opinion is otherwise.

Tell me that Mr. Joe "Green Jeans" Biden won't figure out some way to put the freeze on that. If I'm smart enough to figure it out, he must be all over it.

So even if you didn't care about baby salmon washed upon on dried up creek beds, this thing's days are probably numbered.

agip wrote:

seattle prattle wrote:

Translation: Fake market based on unsustainable premises and lack of fundamentals, like crypto and a created short squeeze.

or just look up 'financial engineering.'

bears tend never to see any growth as 'organic' and real, based on actual demand from the economy.

for decades, bears have dissed the US economy, saying it's just a bubble, boosted by Fed printing money, fiscal stimulus and a general 'kids these days' attitude.

Seeing fake money being created by things like dogecoin, then moved into the 'real' economy. Fine, until it collapses.

And to be fair, when you learn about the Federal Reserve system....it's completely absurd:

Government spends too much and needs money

Fed prints the money, loans it to the government

Government pays interest to the Fed

Fed remits the interest back to the government

A perfect cycle.

It...just...doesn't...make...any...sense. How long can that be sustained?

“Fools, as it has long been said, are indeed separated, soon or eventually, from their money. So, alas, are those who, responding to a general mood of optimism, are captured by a sense of their own financial acumen. Thus it has been for centuries; thus in the long future it will also be.”

- John Kenneth Galbraith, A Short History of Financial Euphoria

the sad history of the collapse of currencies is probably a more apt comparison, for how I feel about the thing.

The dollar is used and abused by everyone - it's just bitcoin, writ large.

Clearly our leaders have lost interest in protecting the currency.

At some point dollar owners will realize this and ask for more interest.

Which would be very bad for the nation and world.

Reminds me of this song, which i like a lot!

"They stood there laughing.

They're not laughing anymore."