I mean, I didn’t have any money in 2001 but the Nasdaq went down 80%. This isn’t that bad yet. I expect all kinds of unprofitable shitty companies like Door Dash and Rivian and Uber to get crushed but there are lots of boring companies making lots of money trading at reasonable multiples.
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Earnings are gonna be smashed, Walmart and Target the canary in the coal mine and we havent even gotten to the massive fiscal tightening coming with the new Congress and state budgets slashed to the bone to support underfunded and unrestructurable pensions in a post asset bubble world.
I have literally no idea how a debt ceiling increase gets passed in 2023.
WAR chart is completely correct btw, the fuck up was the mid teen Fed with an assist to the fucked up political system that cant provide correct fiscal policy which led to a shitty recovery post financial crisis and the Fed trying to do everything on its own because Congress is a useless waste of oxygen top to bottom.
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jeez this thread went doom and gloom
From what I understand it’s not possible for the govt to raise rates as high as they need to in order to bring inflation to 2% levels because they’ll quickly reach a point where they can’t make payments on the debt interest they have.
Not really, but you cant raise rates where they need to go without blowing up the house of cards financial markets.
The bottom must be near.
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yeah the thread turned into Peter Schiff 2009
If you guys all ship me $10k I’ll sell everything and trigger the bottom.
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Most of my money is in IRAs that I can’t start to touch for another 7+ years. So I figure I’m just trying to fade the big one. Just keep the house of cards together for another decade please.
the walmart and target earning signal consumer spending is down —> recession i guess, so thats the bad news for today specifically
You’ll be more fucked if it happens in 10 yrs than if it happens now, imo.
Fuck the rest of us, right?
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Yeah, but people buying less stuff is still bad for target and walmart. So this might be bad news for stonks but good news for the the economy as a whole on a longer time frame.
I’m not saying this is actually the case, but it is plausible.
I think they actually sold plenty of stuff but their margins compressed because this supply chain shit is real and likely to hit substantially all retailers.
So does supply chain shit basically mean too much money chasing too few goods?
Not necessarily. Some of it arises when China shuts down factories as part of its Covid policy. That type of stuff should be transitory and isn’t directly related to monetary policy, but hard to know how long lasting the effects are.
Now that the Fifth Circuit has struck down the SEC’s regularatory powers, earnings should skyrocket and the market should boom like never before. Just invest in the most sociopathic CEOs and sell before people realize everything is fraudulent.
Hopefully SCOTUS overturns this insanity.
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It’s been over a decade since I have spent any time studying economics but it seems like to me we have a money supply driven inflation problem that they are trying to cure by decreasing the velocity of money through interest rate hikes. It might work but it’s going to be extremely painful if they actually decide to keep it up. Way too much money got pumped into the economy in 2020 and 2021(and most of it went to rich people who didn’t need it) if we were just going to go full OPEN FOR BUSINESS and that isn’t going to be a problem they can magically fix.
Josh brought up an interesting point which is that the federal government can’t afford much higher interest rates but I think that is true across the board. Raising borrowing costs substantially is going to make a lot of people and businesses insolvent. Adjustable mortgages go up, credit cards go up, student loans go up. Plus all new borrowing to buy goods, cars, houses goes up. Take the real estate market which has been in a massive bubble the last few years. You make mortgage rates 8% instead of 3% and the entire house of cards is going to collapse. People won’t be able to afford as much house which will decrease demand for housing across the board. That is in an environment when most people under 40 can’t afford a house anyways. Now do that for everything.
My money is still on the Fed chickening out somewhere and adjusting their longer term inflation targets up. If we are really headed for a 5%+ fed funds rate the amount of carnage across the board is going to be massive.
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5th circuit is the new rogue circuit. The 9th (? I think) used to issue all some precedent breaking liberal opinions but the 5th has been nuts lately. Way beyond the 9th