if your point is that there was no way Hussman could have predicted that the US would use the power of the Federal Reserve balance sheet and federal deficit spending to support the economy, then you are insulting Hussman more than anything I have said! I mean that's freshman macro.
Last week an office building purchased in 2017 for $121 million sold for $60 million. Long duration Treasury bonds lost a similar amount during that period. Stocks are an asset of similar duration at 20-30 years. I have seen nothing that deters me from believing stocks will suffer a similar fate, perhaps worse. I have said, and I continue to believe 2,300, or the Covid low, is a near certainty. And the 3/2000 1,550 high, and the 1,575 10/2007 high are likely lows in a historic bear market, which I do expect.
Most posters here are quick to attack anyone that has a sober market view. Yet they are willing to give a pass to the Fed with their $Trillion balance sheet losses, and culpability in the inflation that hurts average Americans. Why, because the Fed seemingly buttered the investor’s bread? The lunacy of Government tax policy and spending fuels real wars, culture wars, corporate largesse, illegal immigration, and handouts to those that refuse personal responsibility . None of this madness comes with benign ending for the glamorous stock market. Sorry.
it's all about what's priced into the market, right? My understanding is that commercial real estate prices have held up better than expected, so the REITS haven't been hurt too badly. I mean they are bad...flat for year when the SP500 is +20%, but no losses because the price declines of office real estate are baked in.
Carl Quintanilla @carlquintanilla · 12m MORGAN STANLEY: “Commercial Real Estate: Price Decline Is Progressing Better Than Our Expectation” [Huberty] $KRE
MORGAN STANLEY: “Commercial Real Estate: Price Decline Is Progressing Better Than Our Expectation” [Huberty] $KREpic.twitter.com/Qu9ySFtcqO
Here's a GS guy saying the SP500 would end 2023 at 4000, after starting the year at 3839, for a 4% gain.
As of 11/21/23, we're actually sitting on an 18% return, or 20.1% with the dividend.
Bad call so far. He seems to have not foreseen the jump in SP500 earnings we actually got.
Goldman Sachs' David Kostin: Lack of EPS growth will be a stock market highlight for 2023, this year was “all about painful de-rating.” 2023 will be less painful, but also no gain. 3mnth PT = 3600 6mnth PT = 3900 FY23 PT = 4000
11:00 AM · Nov 22, 2022
Nice job including dividends on S & P return for the year.To leave them out is very misleading. Over the last 100 years, dividends have contributed 32% for total return for S & P, while capital appreciations have contributed 68%.
Here's a GS guy saying the SP500 would end 2023 at 4000, after starting the year at 3839, for a 4% gain.
As of 11/21/23, we're actually sitting on an 18% return, or 20.1% with the dividend.
Bad call so far. He seems to have not foreseen the jump in SP500 earnings we actually got.
Goldman Sachs' David Kostin: Lack of EPS growth will be a stock market highlight for 2023, this year was “all about painful de-rating.” 2023 will be less painful, but also no gain. 3mnth PT = 3600 6mnth PT = 3900 FY23 PT = 4000
11:00 AM · Nov 22, 2022
Nice job including dividends on S & P return for the year.To leave them out is very misleading. Over the last 100 years, dividends have contributed 32% for total return for S & P, while capital appreciations have contributed 68%.
Actually, I am reading elsewhere that dividends contributed 41%. That is huge.
“Remember all of those trillions of $$$ worth of US Treasury and mortgage bonds that the Fed has been buying from the past decade or longer, much of it between 1% to 3%?
The current amount is about $7.7 trillion. But if the Fed sold them all today they are only worth about $6.4 trillion.
The Fed is sitting on a massive loss from their manipulation of asset prices in the bond market, and they've caused trillions of $$$ in losses at countless banks, so more bailouts are coming.”
—Wall Street Silver
This post was edited 2 minutes after it was posted.
“Remember all of those trillions of $ worth of US Treasury and mortgage bonds that the Fed has been buying from the past decade or longer, much of it between 1% to 3%?
The current amount is about $7.7 trillion. But if the Fed sold them all today they are only worth about $6.4 trillion.
The Fed is sitting on a massive loss from their manipulation of asset prices in the bond market, and they've caused trillions of $ in losses at countless banks, so more bailouts are coming.”
—Wall Street Silver
but we all know the Fed won't be forced to sell at a loss - the Fed will hold those treasuries until maturity, eliminating the loss. And if interest rates come back down, that will also make losses disappear.
And anyway, the Fed delivered massive profits to the US treasury during the 2008-2021 period that will outweigh these losses. This among all things is not a problem.
“Remember all of those trillions of $ worth of US Treasury and mortgage bonds that the Fed has been buying from the past decade or longer, much of it between 1% to 3%?
The current amount is about $7.7 trillion. But if the Fed sold them all today they are only worth about $6.4 trillion.
The Fed is sitting on a massive loss from their manipulation of asset prices in the bond market, and they've caused trillions of $ in losses at countless banks, so more bailouts are coming.”
—Wall Street Silver
Interesting, igy. One of the commenter's, with a very funny user name fwiw, asked the following rather probing question:
"Dave the Blind Tesla Guy @DaveWarnedYou
How much of those assets were bought up when Trump had the Fed propping up the stock market and lowering interest rates to 0%. I wonder who really benefited from those insanely low rates... certainly not the American people, as that was a leading cause of rising inflation!"
“Remember all of those trillions of $ worth of US Treasury and mortgage bonds that the Fed has been buying from the past decade or longer, much of it between 1% to 3%?
The current amount is about $7.7 trillion. But if the Fed sold them all today they are only worth about $6.4 trillion.
The Fed is sitting on a massive loss from their manipulation of asset prices in the bond market, and they've caused trillions of $ in losses at countless banks, so more bailouts are coming.”
—Wall Street Silver
but we all know the Fed won't be forced to sell at a loss - the Fed will hold those treasuries until maturity, eliminating the loss. And if interest rates come back down, that will also make losses disappear.
And anyway, the Fed delivered massive profits to the US treasury during the 2008-2021 period that will outweigh these losses. This among all things is not a problem.
Massive profits wiped out: “between 2011 and 2021, the Fed’s remittances totaled over $920 billion. However, beginning in September 2022, remittances due became negative. Since then, the Fed has experienced a shortfall in earnings that is generally between about $5 billion and $11 billion per month.”
“Remember all of those trillions of $ worth of US Treasury and mortgage bonds that the Fed has been buying from the past decade or longer, much of it between 1% to 3%?
The current amount is about $7.7 trillion. But if the Fed sold them all today they are only worth about $6.4 trillion.
The Fed is sitting on a massive loss from their manipulation of asset prices in the bond market, and they've caused trillions of $ in losses at countless banks, so more bailouts are coming.”
—Wall Street Silver
Interesting, igy. One of the commenter's, with a very funny user name fwiw, asked the following rather probing question:
"Dave the Blind Tesla Guy @DaveWarnedYou
How much of those assets were bought up when Trump had the Fed propping up the stock market and lowering interest rates to 0%. I wonder who really benefited from those insanely low rates... certainly not the American people, as that was a leading cause of rising inflation!"
I was a vocal critic then, and of the 2017 Republican tax cut. The cadre of left leaning DGTD posters were largely silent as the bread was buttered.
This post was edited 1 minute after it was posted.
but we all know the Fed won't be forced to sell at a loss - the Fed will hold those treasuries until maturity, eliminating the loss. And if interest rates come back down, that will also make losses disappear.
And anyway, the Fed delivered massive profits to the US treasury during the 2008-2021 period that will outweigh these losses. This among all things is not a problem.
Massive profits wiped out: “between 2011 and 2021, the Fed’s remittances totaled over $920 billion. However, beginning in September 2022, remittances due became negative. Since then, the Fed has experienced a shortfall in earnings that is generally between about $5 billion and $11 billion per month.”
—St Louis Fed
the Fed isn't supposed to be a profit center...not sure what meaning you ascribe to all this.
Massive profits wiped out: “between 2011 and 2021, the Fed’s remittances totaled over $920 billion. However, beginning in September 2022, remittances due became negative. Since then, the Fed has experienced a shortfall in earnings that is generally between about $5 billion and $11 billion per month.”
—St Louis Fed
the Fed isn't supposed to be a profit center...not sure what meaning you ascribe to all this.
I guess you forgot I was responding to your quote on the “Fed delivering massive profits.” Therefore, you characterization, not mine. Anyway, if looked at as normal accounting there are huge losses. To pretend this has no consequences seems both disingenuous and foolish.
the Fed isn't supposed to be a profit center...not sure what meaning you ascribe to all this.
I guess you forgot I was responding to your quote on the “Fed delivering massive profits.” Therefore, you characterization, not mine. Anyway, if looked at as normal accounting there are huge losses. To pretend this has no consequences seems both disingenuous and foolish.
heh I only brought up profits because you brought up the losses on the bonds in the Fed's balance sheet. Circular.
Well anyway the Fed is a very strange creature. That it is a quasi-private organization that can create unlimited amounts of money, buy trillions of US gummint bonds with it, collect interest from those bonds...and then give that interest back the US as real money that reduces the deficit...boggles.
So strange. Black magic.
But it's all worked somehow - the number and severity of recessions since its creation have fallen.
This post was edited 2 minutes after it was posted.
Remember all those high-conviction predictions that 2023 would be a recession year? That was the consensus view even just 7 months ago. instead, we're ripping and roaring.
Particularly amazing that one of those quarters predicted to be recessionary....had shocking +4.9% growth. How can you be that wrong?
Robin Brooks @RobinBrooksIIF It doesn't look like it at first glance, but Bloomberg consensus has tumbled into recession for the US. The Q4/Q4 2023 consensus is 0.2%, which - given strong tracking for Q1 2023 - implies a pretty deep recession in Q2 and Q3 2023. Recession is now the base case for the US...
I guess you forgot I was responding to your quote on the “Fed delivering massive profits.” Therefore, you characterization, not mine. Anyway, if looked at as normal accounting there are huge losses. To pretend this has no consequences seems both disingenuous and foolish.
heh I only brought up profits because you brought up the losses on the bonds in the Fed's balance sheet. Circular.
Well anyway the Fed is a very strange creature. That it is a quasi-private organization that can create unlimited amounts of money, buy trillions of US gummint bonds with it, collect interest from those bonds...and then give that interest back the US as real money that reduces the deficit...boggles.
So strange. Black magic.
But it's all worked somehow - the number and severity of recessions since its creation have fallen.
Even a stopped clock is right twice a day. It’s looking more and more like 4100 is the new low. I’m curious why you’re such a perma bear; do you trade options?
Igy - when the Magnifico 7 is up 1000s of % in 10 years, will you Permabears just copy that chart depicting their demise and just change the dates? It is becoming laughable. How is that 3000 S & P coming? Too funny!