Markets still falling like whoa

[washparkhorn 9967]

This is how the Fed fights inflation. Loose monetary policy (QE) flooded 6 trillion into the system. When transitory inflation became sticky, the Fed announced and is implementing QT (quantitative tightening). The markets - addicted to QE - have been responding accordingly. 
 

Follow the Fed. 

[Wulaw Horn 19560]

1 minute ago, washparkhorn said:

This is how the Fed fights inflation. Loose monetary policy (QE) flooded 6 trillion into the system. When transitory inflation became sticky, the Fed announced and is implementing QT (quantitative tightening). The markets - addicted to QE - have been responding accordingly. 
 

Follow the Fed. 

No diggity no doubt. 

[Trey3216 15450]

40 minutes ago, Wulaw Horn said:

This is a point I make whenever I hear people talking about China kicking our ass from the conservative side of the aisle… when did we become pussies and think we weren’t going to consign a bunch of commies to the ash heap of history?  Or when I hear people talking about buying gold bc the world is going to fall apart. Do you not understand the Dollar is the worlds reserve currency and how that works?  A couple coins as a small part of an overall strategy?  Sure. Betting on the disintegration of the American system? Cmon man. 

 

9 hours ago, Aqua Buddha said:

I'll go full on CR hard to the mother fucking paint.

When did conservatives become such gloom and doom people?  Reagan was an optimist.  Now, talk to any conservative and this is the worst economy ever.  (They said the same thing under Obama, BTW.)  I don't see how you can have a recession when everyone has a job and money to spend?  I know a dude who is a hard core Republican and is convinced all of the spending is due to government spending.  You know what he's doing in two months?  Dropping $20K taking his family to Disney.  When I ask him how he can do that in such a horrible economy, he says it's OK for him.  Yes, and everyone else taking their fuck face kids to Disney.  PM me when Disney goes to three days a week due to lack of demand.

"Everything is too expensive," we're told.  Well, shit, then someone will come along and offer a cheaper price.  It's called the Motherfucking Free Market.  I read about this thing called Supply and Demand once in a book.

No one ever got rich underestimating the power of the American consumer.

There's a big difference between being an optimist, and understanding the current track.  I'm an eternal optimist, but sometimes that optimism needs a swift kick to the balls.  That's happening right now.  The market is out of equilibrium, it will get itself back to equilibrium and is doing so currently.   I've argued with both liberals and conservatives that China kicking our ass is a laughable worry.  They can't stop buying our debt because they have to feed their fucking people somehow, and it's not as if the US is going to balance trade transactions with fucking cash.  Take our debt, and like it, bitches.  Do we need to ween ourselves off dependence upon Chinese manufacturing??? Of course.  They're a 1/2 faith actor that likes to play the delay game.  Shift production around and diversify a bit.  But worry about China floating their ass across the Pacific with their "100 Million Man Army"???  L O Fucking L.  

 

Being an optimist on America and recognizing shit isn't all sunshine and rainbows right now are 2 wildly different things.  And if you can't handle that, then maybe America isn't for you.   

[Fudge Nuggets 19407]

1 hour ago, Wulaw Horn said:

Lot of truth to this but you also cannot ignore him declaring war in fossil fuels

Current oil production in the US is around 11.3MMbbl / day.  That's the same level as around Aug 2018.  Production continued to climb up to Nov 2019 then started to drop prior to the pandemic.  This "war on fossil fuels" is about as effective as Putin's war on Ukranian Nazism.

[Wally Fairway 5664]

19 hours ago, Parliament said:

I've been super busy with work today.  How are equity markets doing?

19 hours ago, ATexanAbroad said:

prison butt sex

Know your audience - prison butt sex might be a great day for Parliament

 

[Aqua Buddha 14782]

6 minutes ago, Fudge Nuggets said:

Current oil production in the US is around 11.3MMbbl / day.  That's the same level as around Aug 2018.  Production continued to climb up to Nov 2019 then started to drop prior to the pandemic.  This "war on fossil fuels" is about as effective as Putin's war on Ukranian Nazism.

Yes, allow me to make another CR drive to the paint.

Joe Biden is not killing or even limiting oil production.  PE is doing that.  O&G got crushed in the 2010's and they found a production equilibrium around 2017/18.  They're back to where they were then.  They can produce more oil.  They just don't want to.  Then there are the mystical effects of the Keystone Pipeline.....

[Wally Fairway 5664]

18 minutes ago, Aqua Buddha said:

Yes, allow me to make another CR drive to the paint.

Joe Biden is not killing or even limiting oil production.  PE is doing that.  O&G got crushed in the 2010's and they found a production equilibrium around 2017/18.  They're back to where they were then.  They can produce more oil.  They just don't want to.  Then there are the mystical effects of the Keystone Pipeline.....

America for decades was used to the O&G industry reacting to short-term market conditions by opening the spigot when prices rose (especially the Saudi's); but that has all changed as "they" are much more complacent (and happy) to allow prices to rise and consumers to pay higher prices. At the pump, for airline tickets and for shipping costs, PE replaced the old Oilhand/Wildcatter mentality and boom and bust cycle that resulted.

[Snake Diggity 4698]

It seems to me, the causes of the inflation we are currently experiencing are, in order:

Undersupply of oil, caused by myriad factors led by Russian invasion of Ukraine and Saudis unwillingness to increase supply to compensate.

Supply chain issues caused by myriad factors led by China’s zero COVID policy.

Worker shortages in the US caused by long term demographic trends and effects of the 2020-2021 pandemic (early retirements and people voluntarily leaving the workforce e.g. more women staying home).

Overstimulation of the economy caused by US monetary policy over the last 20 years.

[Fudge Nuggets 19407]

33 minutes ago, Wally Fairway said:

America for decades was used to the O&G industry reacting to short-term market conditions by opening the spigot when prices rose (especially the Saudi's); but that has all changed as "they" are much more complacent (and happy) to allow prices to rise and consumers to pay higher prices. At the pump, for airline tickets and for shipping costs, PE replaced the old Oilhand/Wildcatter mentality and boom and bust cycle that resulted.

Yeah, that's kind of exactly what he said.  Thanks for the auto-repeat though, it brought a lot to the discussion.

[Incredulity 11861]

[Larry T. Spider 1747]

45 minutes ago, Snake Diggity said:

It seems to me, the causes of the inflation we are currently experiencing are, in order:

Undersupply of oil, caused by myriad factors led by Russian invasion of Ukraine and Saudis unwillingness to increase supply to compensate.

Supply chain issues caused by myriad factors led by China’s zero COVID policy.

Worker shortages in the US caused by long term demographic trends and effects of the 2020-2021 pandemic (early retirements and people voluntarily leaving the workforce e.g. more women staying home).

Overstimulation of the economy caused by US monetary policy over the last 20 years.

This is where I am too. Two of the four need to get fixed to see things calm down. Monetary policy and China getting back to work seem most likely to me.

Who knows what will go on with Russia and oil. But, slowing consumer demand could lower oil prices even if supply stays somewhat tight.

[Guest]

3 hours ago, Aqua Buddha said:

Yes, allow me to make another CR drive to the paint.

Joe Biden is not killing or even limiting oil production.  PE is doing that.  O&G got crushed in the 2010's and they found a production equilibrium around 2017/18.  They're back to where they were then.  They can produce more oil.  They just don't want to.  Then there are the mystical effects of the Keystone Pipeline.....

You’re 100% right about PE. But Biden does nothing to foster investment. He has a overtly frosty relationship with the space, and he and his advisors very clearly do not understand it. See his idiotic decision to release SPR and asking Saudis to produce more (like are you fucking serious?). 

Keystone is a tired talking point that doesn’t affect us, but it’s idiotic it wasn’t approved and idiotic it’s a political lightning rod. 

Production companies want to make money, and therefore would produce more if able. Many are. Still the lessons of living within cash flow and not overlevering loom large. But to say “yeah, I’ll turn down incremental cash flow” is just wrong. 

Edited May 19, 2022 by Porterhouse

[BLKNSTY 289]

Absolutely true, and same principle applies to indirect measures such as student loan “forgiveness”….but adherence to sound fiscal policy is not necessarily gonna stop panicked efforts to remain in power when faced with horribad polling…can’t really elaborate further without taking the convo into the cloaky cesspool.

Edit: Fed/govt continues to operate a year behind the power curve, which is making this worse. Time to cut rates/soften demand was long ago…priority now should be boosting productivity through targeted expansionary action and removal of red tape…instead we are about start hemorrhaging jobs to go along with needless collapse of asset prices both of which will do absolutely zero to address the critical shortage of essential goods.

I’d argue that the impact of Student Loan forgiveness is already pretty much baked in. Something like 96% of ppl with student loans haven’t made a payment in 2+ years.


Sent from my iPhone using Tapatalk

[immamac 44199]

This isn't the cloak room. Make your points without referring to party or name, position is fine. 

[Cheeseweasel 26439]

9 minutes ago, immamac said:

This isn't the cloak room. Make your points without referring to party or name, position is fine. 

The Whig's get no respect in the CR.

[immamac 44199]

1 minute ago, Cheeseweasel said:

The Whig's get no respect in the CR.

I think the commentary has been mostly on topic, but there are too many names and political parties getting thrown around. Economics has some government interaction not all government commentary needs to be party or person associated. 

[Incredulity 11861]

Just now, Cheeseweasel said:

The Whig's get no respect in the CR.

Bull Moose run this bitch.

 

or is it Meese?

[Aqua Buddha 14782]

Every single retailer reporting strong sales.

[Captainant 28387]

back in economic terms: reverse repo markets (AKA - free floating money in the economy with zero velocity) hit a record high of $1,981,005,000,000

The stagflation is a comin, lads.

[TonyTexas 10683]

1 hour ago, immamac said:

I think the commentary has been mostly on topic, but there are too many names and political parties getting thrown around. Economics has some government interaction not all government commentary needs to be party or person associated. 

Economic conditions are almost totally driven by government policy be that fiscal, monetary, tax, or trade, to name a few.  Different parties and different people within those parties have different approaches. And you can’t really have a real discussion without taking that into account. 

[immamac 44199]

33 minutes ago, TonyTexas said:

Economic conditions are almost totally driven by government policy be that fiscal, monetary, tax, or trade, to name a few.  Different parties and different people within those parties have different approaches. And you can’t really have a real discussion without taking that into account. 

Yes you can, by not mentioning political party or the person's name and their position which actually holds the authority not their party or person. 

[TonyTexas 10683]

6 minutes ago, immamac said:

Yes you can, by not mentioning political party or the person's name and their position which actually holds the authority not their party or person. 

Or by writing coherently. 

[Trey3216 15450]

4 hours ago, Aqua Buddha said:

Every single retailer reporting strong sales.

6 weeks ago 

[Blotto 23974]

7 hours ago, Aqua Buddha said:

Every single retailer reporting strong sales.

If you could guarantee me that the today's economic realities are as bad as it will get, I would liquidate my market hedges tomorrow AM. But my primary concern is not today's economy, its the economy 6 months, 12 months down the road. 

[Aqua Buddha 14782]

3 hours ago, Trey3216 said:

6 weeks ago 

They’ve all said May has been just as strong and from what I’ve seen, it has been.  WMT and TGT both said as much.

[Vegas64 706]

As inflation crimps profits and the Fed tightens the monetary screws, stocks continued their slide with no bottom in sight. A number of American corporate giants, including Walmart, Target, Bank of America, Charles Schwab, and Intel, hit 52-week lows yesterday.

[UTGrad98 2331]

So if rates get to 6-8%, can I park some of my money in a 30 year note and receive 8% a year for 30 years? That doesnt seem right and way too easy of a decision.

[TwiceHorn 31987]

9 minutes ago, UTGrad98 said:

So if rates get to 6-8%, can I park some of my money in a 30 year note and receive 8% a year for 30 years? That doesnt seem right and way too easy of a decision.

More likely scenario is one or five year CDs.  Longer the term, the further away from the prime rate you're going to get.

Up to 250k at each institution in case the shit hits the fan (FDIC insurance).

Edited May 20, 2022 by TwiceHorn

[Fudge Nuggets 19407]

27 minutes ago, UTGrad98 said:

So if rates get to 6-8%, can I park some of my money in a 30 year note and receive 8% a year for 30 years? That doesnt seem right and way too easy of a decision.

If you get inflation like we had back in the late 1970's early 1980's that 8% over 30 years isn't going to cover the loss of purchasing power of each dollar.

[Trey3216 15450]

31 minutes ago, UTGrad98 said:

So if rates get to 6-8%, can I park some of my money in a 30 year note and receive 8% a year for 30 years? That doesnt seem right and way too easy of a decision.

Not in a treasury.  You'd basically be buying the bond at below par, collecting coupon payments ever 6 months, and having a YTM at 6-8%.  You'd never get a US Treasury issued with a 6-8% coupon.  

[Bozo_Casanova 26773]

17 hours ago, TonyTexas said:

Economic conditions are almost totally driven by government policy 

No. That’s like saying the weather is controlled by umbrellas and snow tires. 
Government policy can shape the economic climate, for example, how changes to the tax code drove productivity gains out of the middle class from the 80’s-present and in turn reshaped consumer spending patterns, or how rebates on solar impact the demand signal for fossil fuels, or deficit financed tax cuts or debasement*  during GDP expansions can load the gun for inflation when met with shortages or productivity decline. 
 

Economic conditions are almost entirely driven by what businesses and business people do in a given climate. There is always opportunity.  Piss and moans aren’t productive capital.

 

 

*a distinction without a difference

Edited May 20, 2022 by Bozo_Casanova

[TonyTexas 10683]

Yeah. I probably overstated the government policy affect but you might have understated. It often seems a chicken or egg conundrum. Does government policy drive private sector decisions or visa versa. 

[Incredulity 11861]

1 hour ago, Trey3216 said:

You'd never get a US Treasury issued with a 6-8% coupon.

Treasury rates have been above 8% in the past.

[Trey3216 15450]

1 minute ago, Incredulity said:

Treasury rates have been above 8% in the past.

True, but it's been a long, long while.  I just don't think we'd get there.   

[Incredulity 11861]

1 minute ago, Trey3216 said:

True, but it's been a long, long while.  I just don't think we'd get there.   

I certainly hope not.  

[Parliament 14559]

So we're on the precipice of a Bear Market.  

[TonyTexas 10683]

9 minutes ago, Incredulity said:

Treasury rates have been above 8% in the past.

30 year was at 15% in the early 80’s. Yikes

[Fudge Nuggets 19407]

3 minutes ago, Parliament said:

So we're on the precipice of a Bear Market.  

We are 0.003% away from a 20% drop from the highs on the S&P 500, so yeah it doesn't get much more precipicity than that.

[tbone_ 14410]

30 year was at 15% in the early 80’s. Yikes

My grandmother retired early in the late 70s or early 80s. Got a meager payout but put it in a 10 year CD at 14%. Turned into a solid balance by the time my grandfather retired 10 years later.

[Storm the Field 5360]

Is it just me or is there a big dump every single Friday?

[Trey3216 15450]

43 minutes ago, Storm the Field said:

Is it just me or is there a big dump every single Friday?

I usually eat a nice dinner on Thursday evenings.  

[Incredulity 11861]

This seems bad

https://www.cnn.com/2022/05/20/investing/dow-stock-market-losing-streak/index.html

Dow is on pace for longest weekly losing streak since 1923

[MoJames 8258]

22 hours ago, Cheeseweasel said:

The Whig's get no respect in the CR.

Anti-Masonic Party for life.

[Trey3216 15450]

2 minutes ago, MoJames said:

Anti-Masonic Party for life.

[LCHorn 2749]

4 hours ago, Bozo_Casanova said:

No. That’s like saying the weather is controlled by umbrellas and snow tires. 
Government policy can shape the economic climate, for example, how changes to the tax code drove productivity gains out of the middle class from the 80’s-present and in turn reshaped consumer spending patterns, or how rebates on solar impact the demand signal for fossil fuels, or deficit financed tax cuts or debasement*  during GDP expansions can load the gun for inflation when met with shortages or productivity decline. 
 

Economic conditions are almost entirely driven by what businesses and business people do in a given climate. There is always opportunity.  Piss and moans aren’t productive capital.

 

 

*a distinction without a difference

Thank you, I was going to write a version of this as rebuttal to @washparkhorn’s “It’s the Fed, stupid” comment above.

[B00M 6725]

52 minutes ago, Incredulity said:

This seems bad

https://www.cnn.com/2022/05/20/investing/dow-stock-market-losing-streak/index.html

Dow is on pace for longest weekly losing streak since 1923

 

[Blotto 23974]

3 hours ago, Parliament said:

So we're on the precipice of a Bear Market.  

 

[Trey3216 15450]

Somehow miracle green finish for the Dow and S&P today.   

[Fudge Nuggets 19407]

6 hours ago, tbone_ said:

My grandmother retired early in the late 70s or early 80s. Got a meager payout but put it in a 10 year CD at 14%. Turned into a solid balance by the time my grandfather retired 10 years later.

My dad put his mom's pittance for savings into some high rate CD probably around the same time.  She wasn't rich, but she was a woman of simple means and never did without.

[Gatorubet 30631]

On 3/25/2022 at 1:29 PM, 52-80 said:

Bought some calls on 20y treasury bond etf (tlt). 
 

its been taking a shit since all the expectations of increased interest rates. But because the bonds themselves have taken a shit, some institutions and funds might have to buy into them in a rebalance, even if discretionary traders are bearish on them