Markets still falling like whoa

[52-80 19,377]

16 hours ago, Twizzler said:

How far down  is the open after the Israel shit?

Those folks have been killing each other for a millenia so you figure at some point it had to have been priced in

[bernorange 8,385]

1000 year middle east strife is just a transient market variable.

[bernorange 8,385]

With respect to my previous posts regarding Treasuries, from AEP via The Telegraph:

Quote

...
The federal government is unable to fund this scale of borrowing from U.S. domestic savings, and global creditors are no longer willing to fund it either at bearable cost.
...
Real rates are rocketing, driven by a sudden jump in the "term premium." Think of it as a credit crunch being imposed upon a feckless political class in Washington by global bond vigilantes.
...
A very slow-burning fuse has finally, and suddenly, reached the powder keg, confirming the Dornbusch adage that financial crises always take longer than you think, but then unfold much faster than you expected.

Bernard Connolly, the world's foremost Wicksellian economist, says the U.S. fiscal bubble is the latest in a long string of bubbles required to keep Western economies above water. "If the fiscal deficit is reduced, the Federal Reserve will have to collapse interest rates," he said.

As the international capital markets pull the plug on U.S. fiscal incontinence, the Fed will again have to come to the rescue. It will have to restore negative real rates and blanket the debt markets with quantitative easing à outrance, or risk an economic depression. This in turn will launch the next QE bubble. ...
...
Or if you want a plain-vanilla defence against spiralling deficits and financial repression, just buy gold.
...

https://gata.org/node/22852

[Captainant 28,537]

6 minutes ago, bernorange said:

With respect to my previous posts regarding Treasuries, from AEP via The Telegraph:

https://gata.org/node/22852

Sure seems like all those tax cuts are having a negative effect on our ability to service debt and fund our social services

[Guest]

25 minutes ago, Captainant said:

Sure seems like all those tax cuts are having a negative effect on our ability to service debt and fund our social services

Never address spending.  Ever.

Hint: Revenue is NOT the problem.  Never has been.

[B00M 6,734]

1 hour ago, slorch said:

Never address spending.  Ever.

Hint: Revenue is NOT the problem.  Never has been.

They never will. There’s no incentive for politicians to reduce spending or increase tax rates. Which party is going to impose austerity measures while their president is in office? Neither. It’s clearly going to require a great financial crisis

[UTGrad98 2,336]

1 hour ago, B00M said:

They never will. There’s no incentive for politicians to reduce spending or increase tax rates. Which party is going to impose austerity measures while their president is in office? Neither. It’s clearly going to require a great financial crisis

It's this exactly. Even if a few politicians see this, the majority wont or will not act. Congress needs to vote to move setting the budget and taxing its citizens to an appointed body of experts. I have always thought they need to move it to the fed and have fed set the budget, at a minimum. If there is a better solution, Im all for it but I cant see it. Congress wont do it because they wont be re-elected and the majority of the US population is too stupid (both left and right) to know something needs to be done. Better now than when the debt hits 50 trillion ( which is where I heard the shit will really hit the fan ).

[Bozo_Casanova 26,848]

3 hours ago, slorch said:

Never address spending.  Ever.

Hint: Revenue is NOT the problem.  Never has been.

You can't separate them. You're being just as silly as people who say spending isn't the problem. And it's not "both" either, because it's way bigger than just revenues and spending. Rule of thumb: if a position on this is politically convenient or straightforward, it's bullshit.  

Edited October 8, 2023 by Bozo_Casanova

[52-80 19,377]

2 hours ago, B00M said:

They never will. There’s no incentive for politicians to reduce spending or increase tax rates. Which party is going to impose austerity measures while their president is in office? Neither. It’s clearly going to require a great financial crisis

its the Next Administrations Problem. 

[Guest]

6 minutes ago, Bozo_Casanova said:

You can't separate them. You're being just as silly as people who say spending isn't the problem. 

Bullshit.  You're telling yourself that to feel better about taxation.

Now, if you want to say they are self-perpetuating because of revenue, I would fundamentally agree.  We don't consider real budgeting as a country.  It's drunken sailor approach across the fucking board... because we can.

It doesn't make our tax system right or just.  It also doesn't mean the tax system should be leveraged as punishment or reward towards citizens, but it is.  Hell, we feel entitled to that revenue, as a society.  It's fucked up.

Edited October 8, 2023 by slorch

[B00M 6,734]

47 minutes ago, UTGrad98 said:

It's this exactly. Even if a few politicians see this, the majority wont or will not act. Congress needs to vote to move setting the budget and taxing its citizens to an appointed body of experts. I have always thought they need to move it to the fed and have fed set the budget, at a minimum. If there is a better solution, Im all for it but I cant see it. Congress wont do it because they wont be re-elected and the majority of the US population is too stupid (both left and right) to know something needs to be done. Better now than when the debt hits 50 trillion ( which is where I heard the shit will really hit the fan ).

What they’ll actually do, when the fed refuses to print money to absorb our spending, since JP is actually trying to reduce inflation (and the rest of the world is net sellers of our debt), is pass a law forcing the fed to buy our debt.
 

I think we’ll know the direction of the dollar in like 6-8 months when the Fed’s reverse repo facility runs dry and yields on treasury bonds go up sharply trying to entice buyers. 

[Bozo_Casanova 26,848]

 

2 minutes ago, slorch said:

Bullshit.  You're telling yourself that to feel better about taxation.

 

No, I'm telling you, and clearly wasting my time, because you didn't read my post. Carry on. 

Edited October 8, 2023 by Bozo_Casanova

[Guest]

3 minutes ago, Bozo_Casanova said:

 

No, I'm telling you, and clearly wasting my time, because you didn't read my post. Carry on. 

No, you made a random statement out of your ass and act as if it is absolute truth.  If you were right, we could reduce spending by reducing tax revenue.

Let's go, brother.  I'm all for it.

Edited October 8, 2023 by slorch

[Incredulity 11,876]

2 minutes ago, slorch said:

No, you made a random statement out of your ass and act as if it is absolute truth.

If there is a poster with a higher opinion of himself, I’m not aware of him.

[52-80 19,377]

Cant expect a voting base (begging for student loan forgiveness) who dont understand financial discipline, to demand the same of their elected representatives. 
 

We need the ghost of Ross Perot to appear on TV with a powerpoint deck and a pointer instructing people how money works. 

[Bozo_Casanova 26,848]

20 minutes ago, slorch said:

No, you made a random statement out of your ass and act as if it is absolute truth.  If you were right, we could reduce spending by reducing tax revenue.

Let's go, brother.  I'm all for it.

It I was right about what we could do what?  What do you think I'm saying to you?

16 minutes ago, Incredulity said:

If there is a poster with a higher opinion of himself, I’m not aware of him.

oh boo hoo

[bernorange 8,385]

26 minutes ago, Bozo_Casanova said:

You can't separate them. ...

Why not?  Irrespective of your opinion of the Laffer curve, total tax revenue as a % of GDP has been largely range bound between 16 to 18% throughout our lifetimes.  Revenue (as a % of GDP) is a fairly constant known that fluctuates moreso with business cycles (health of the economy) than tax policy.  Congress doesn't can't effectively target tax revenue because of variables outside of their control, but there is a practical upper limit to revenue.  Spending on the other hand is 100% within their control.

[Bozo_Casanova 26,848]

 @bernorange I'm not going to rehash a bunch of monetary stuff here that you already know and very few others would get. It's an empty debate in this context and I'm bowing out of this one. 

Edited October 8, 2023 by Bozo_Casanova

[Incredulity 11,876]

32 minutes ago, Bozo_Casanova said:

 @bernorange I'm not going to rehash a bunch of monetary stuff here that you already know and very few others would get. It's an empty debate in this context and I'm bowing out of this one. 

[Cheeseweasel 26,439]

I have a girlfriend but she's in Canada and you wouldn't know her. 

[Wally Fairway 5,674]

18 hours ago, 52-80 said:

its the Next Administrations Problem. 

yeah - well the way things seem to be headed I have a candidate whose time has come and much better than what seems to be the likely choices in 2024. Couldn't hurt the economy much more that the last 50 years 

Spoiler

 

[Bozo_Casanova 26,848]

17 hours ago, Incredulity said:

 

46 minutes ago, Cheeseweasel said:

I have a girlfriend but she's in Canada and you wouldn't know her. 

Oh good grief, OK.  I spent years posting on this that everybody involved here saw(or at least @slorch and @bernorange did anyway), that went into deep detail about not only the spending cuts we should do, but here's an abbreviated response.
There are only three spending categories that matter:
1) Military spending
2) Entitlement spending
3) Debt service, which is a function of spending
To bring the debt under control requires reduction in military and entitlements, but the the cuts have to be offset in order to avoid a GDP collapse, because that would in turn collapse tax revenues. The way you do that is with spending that either has higher velocity in the economy or has higher productive benefit to the GDP (e.g. "Bridges not Bombs")
For example, we need deep military headcount reductions but to to prevent massive negative impact we would have to offset them partially with civilian infrastructure programs (like the CCC) that deliver equivalent job training to the economy but don't carry the long term retirement and healthcare cost burden. Another example would be the necessity of ending the fiction that social security is a pension and converting it to a welfare program. Another would be truly universal health coverage (however you get there, ranging from medicare for all to the private schemes of Switzerland and Germany), because we would not only lower the cost drag healthcare exerts on the economy  but put money into people's hands that gets spent, which in turn stimulates GDP growth AND tax revenues.


But on the tax side the problem is not the amount of the revenue so much as the targeting- the nature of where the revenue comes from,  and the velocity of the money left in people's pockets, because of the effect that has on inflation or asset and goods pricing, i.e. GDP. All of our tax cuts of the last two decades has been a wealth transfer from future into current asset prices, with little long term productive benefit. The revenue is somewhat besides the point, because here's the thing - we're operating a fiat currency manufacturing and export business so when it comes to the domestic economy the analogy of a balance sheet doesn't apply. So you can't really separate your spending from your tax cuts because your tax cuts are also spending.

Now, can we get back to markets falling like whoa?

Fin

Edited October 9, 2023 by Bozo_Casanova

[Cheeseweasel 26,439]

Dude. We were just teasing you. 

[bernorange 8,385]

12 minutes ago, Bozo_Casanova said:

... To bring the debt under control requires reduction in military and entitlements, but the the cuts have to be offset in order to avoid a GDP collapse, because that would in turn collapse tax revenues. ...

Which kind of cuts are you talking about here - actual budget reductions or slower rates of increase ("cuts" as D.C. critters know them)?  It's too bad that Ron Paul's advocacy for merely freezing current spending levels didn't get more attention.  It's a "cut" by D.C.'s standard without being disorderly to markets (or GDP) though it would have been much easier to do when we had ZIRP and low inflation.

At some point we have to recognize the feedback loop / spiral and realize that we are in a hole and we need to stop digging.

Edited October 9, 2023 by bernorange

[Wally Fairway 5,674]

2 minutes ago, Cheeseweasel said:

Dude. We were just teasing you. 

Cheez - you must have missed the announcement. 
Message Boards be serious biz, like for reals dude (and I am serious - which is why I am not posting the related meme)

[Guest]

23 minutes ago, Bozo_Casanova said:

 

Oh good grief, OK.  I spent years posting on this that everybody involved here saw(or at least @slorch and @bernorange did anyway), that went into deep detail about not only the spending cuts we should do, but here's an abbreviated response.
There are only three spending categories that matter:
1) Military spending
2) Entitlement spending
3) Debt service, which is a function of spending
To bring the debt under control requires reduction in military and entitlements, but the the cuts have to be offset in order to avoid a GDP collapse, because that would in turn collapse tax revenues. The way you do that is with spending that either has higher velocity in the economy or has higher productive benefit to the GDP (e.g. "Bridges not Bombs")
For example, we need deep military headcount reductions but to to prevent massive negative impact we would have to offset them partially with civilian infrastructure programs (like the CCC) that deliver equivalent job training to the economy but don't carry the long term retirement and healthcare cost burden. Another example would be the necessity of ending the fiction that social security is a pension and converting it to a welfare program. Another would be truly universal health coverage (however you get there, ranging from medicare for all to the private schemes of Switzerland and Germany), because we would not only lower the cost drag healthcare exerts on the economy  but put money into people's hands that gets spent, which in turn stimulates GDP growth AND tax revenues.


But on the tax side the problem is not the amount of the revenue so much as the targeting- the nature of where the revenue comes from,  and the velocity of the money left in people's pockets, because of the effect that has on inflation or asset and goods pricing, i.e. GDP. All of our tax cuts of the last two decades has been a wealth transfer from future into current asset prices, with little long term productive benefit. The revenue is somewhat besides the point, because here's the thing - we're operating a fiat currency manufacturing and export business so when it comes to the domestic economy the analogy of a balance sheet doesn't apply. So you can't really separate your spending from your tax cuts because your tax cuts are also spending.

Now, can we get back to markets falling like whoa?

Fin

The doom loop is perpetual.  Let's doom it more!!!

I understand the balance needed.  There is virtually no interest in correcting our budget as a country.  Lip service, yes!  Actionable legislation?  Tee-hee...who's got time for that nonsense?

I just get a kick of a certain segment of our population who play the class warfare card when it comes to federal taxes and complain about a tax break when there's a very significant portion of the country paying ze-fucking-ro.

[Bozo_Casanova 26,848]

1 hour ago, Cheeseweasel said:

Dude. We were just teasing you. 

No worries - I was looking for a reason to clear my throat.
 

 

44 minutes ago, slorch said:

I just get a kick of a certain segment of our population who play the class warfare card when it comes to federal taxes and complain about a tax break when there's a very significant portion of the country paying ze-fucking-ro.

Heard, but can you blame them? We're debt financing a national effort to take housing and other assets out of reach for the middle class while they get pressured on all sides. Our tax policy of the last 20 years did exactly what critics (like me) said it would do at the time: destroy the future to make the rich richer. If there's a class war happening in this country who's the aggressor? Because I can tell you who is winning and it isn't the people not paying income taxes, because the pay enormous taxes on consumption and passthroughs. And FTR hey aren't making, saving, owning or enjoying jack shit., either. 

Edited October 9, 2023 by Bozo_Casanova

[Bozo_Casanova 26,848]

1 hour ago, bernorange said:

Which kind of cuts are you talking about here - actual budget reductions or slower rates of increase ("cuts" as D.C. critters know them)?  It's too bad that Ron Paul's advocacy for merely freezing current spending levels didn't get more attention.  It's a "cut" by D.C.'s standard without being disorderly to markets (or GDP) though it would have been much easier to do when we had ZIRP and low inflation.

At some point we have to recognize the feedback loop / spiral and realize that we are in a hole and we need to stop digging.

I'm talking about cuts. Actual reductions. Like that cold war peace dividend we didn't get, for example. 

[bernorange 8,385]

2 minutes ago, Bozo_Casanova said:

I'm talking about cuts. Actual reductions. ...

Damn bro!  You're more extreme than Ron Paul!

[Bozo_Casanova 26,848]

6 minutes ago, bernorange said:

Damn bro!  You're more extreme than Ron Paul!

Other than RegentLaw/Escriva/YouthPreacher69 I'm likely the most fiscally conservative member of this board. 

[Wally Fairway 5,674]

53 minutes ago, Bozo_Casanova said:

I'm talking about cuts. Actual reductions. Like that cold war peace dividend we didn't get, for example. 

While I get what you are saying - actual meaningful cuts will be difficult to get when Military is the largest portion of discretionary spending; and the shit happening in Ukraine & Israel are not likely to lead to cuts in spending (and I don't think pursueing an isolationist theology is workable for the duration). Social Security/Medicare should be modified but few elected officials have the balls to eat their own career. 
I think that we should look at sale of certain assets - I think we could get decent offers for Hawaii, a few thousand oz of gold, California, should we claim the Moon (we did land there and plant a flag on the surface) or maybe lease sites there.

Seriously though the biggest issue to balancing the budget and paying down debt is that interest payments are going to skyrocket due to debt balance outstanding continuing to grow and interest rates rising. At what point will people realize the problem and say (with votes) that they are willing to accept some financial pain to help ensure a more prosperous future. Though the US has done it for years it is not possible to forever borrow your way to financial stability and a stable monetary economy. So maybe the question is how far can you kick the can down the road; or are we already at a point where the pain to correct the problem is just so great that no one will be able to support that change?

[Cheeseweasel 26,439]

19 minutes ago, Wally Fairway said:

or are we already at a point where the pain to correct the problem is just so great that no one will be able to support that change?

My fear is that this is the answer. We have crossed the Rubicon in elections (probably when Bush Sr. said "no new taxes" and lost an election when he raised taxes). No one will get reelected for making sound fiscal policy and no one wants to lose a job that makes you millions per year. 

[Bozo_Casanova 26,848]

1 hour ago, Wally Fairway said:

Seriously though the biggest issue to balancing the budget and paying down debt is that interest payments are going to skyrocket due to debt balance outstanding continuing to grow and interest rates rising.

For this reason, at some point either actually or effectively "minting the coin"  becomes a real option, and things get real chaotic from there. 

[washparkhorn 9,973]

The Pete Peterson debt cult scaremongering has poisoned any serious conversation regarding public investment in this nation and her people. 

Household debt ≠ US Govt. debt

As rightfully pointed out by bozo cass for decades, there is massive mal-investment by the US Govt. Those who own the legislative process ensure the Spice continues to flow to these poor investments—much of it to bad actors pushing the Pete Peterson narrative. 

tldr-the call is coming from inside the house. 

[Bozo_Casanova 26,848]

3 minutes ago, washparkhorn said:

The Pete Peterson debt cult scaremongering has poisoned any serious conversation regarding public investment in this nation and her people. 

Household debt ≠ US Govt. debt

As rightfully pointed out by bozo cass for decades, there is massive mal-investment by the US Govt. Those who own the legislative process ensure the Spice continues to flow to these poor investments—much of it to bad actors pushing the Pete Peterson narrative.

tldr-the call is coming from inside the house. 

Based

Edited October 9, 2023 by Bozo_Casanova

[Cheeseweasel 26,439]

6 minutes ago, washparkhorn said:

As rightfully pointed out by bozo cass for decades, there is massive mal-investment by the US Govt.

100%. But I doubt anyone would agree where that investment needs to be because to invest in one place would be to divest in another. 

[Wally Fairway 5,674]

Wall Street this afternoon says the war(s) will not ruin the equity markets, and that everything is fine

[Guest]

Stock market's current playlist:

https://www.youtube.com/watch?v=GpBFOJ3R0M4

[Bozo_Casanova 26,848]

Traders heading toward EOY like

 

Edited October 16, 2023 by Bozo_Casanova

[Wally Fairway 5,674]

On 10/9/2023 at 3:21 PM, Wally Fairway said:

Wall Street this afternoon says the war(s) will not ruin the equity markets, and that everything is fine

Looks like this was true - so I'll quote it and not just repost it (I will also quote it when it is not true. Which could be tomorrow)

[Storm the Field 5,366]

September retail sales came in much stronger than expected. 0.7% vs 0.3%.

Decent chance that Q3 GDP will come in above 4%. Current market consensus is 3.8%. Fed's GDPNow tracker is currently at 5.1%, but will update later today.

[bernorange 8,385]

More justification for the Fed to raise rates again...

[Storm the Field 5,366]

5 hours ago, Storm the Field said:

September retail sales came in much stronger than expected. 0.7% vs 0.3%.

Decent chance that Q3 GDP will come in above 4%. Current market consensus is 3.8%. Fed's GDPNow tracker is currently at 5.1%, but will update later today.

 

[Guest]

23 minutes ago, Storm the Field said:

 

Real GDP is going to come in at 5.4% Holy shit.

 

[bernorange 8,385]

Quote

Federal Reserve Chair Jerome Powell is set to deliver what could be a key policy address, with markets bracing that the central bank leader may still talk tough on inflation.
...
Powell will speak at noon ET to the Economic Club of New York at a critical time for the U.S. economy.
...

https://www.cnbc.com/2023/10/18/fed-chair-powell-to-deliver-key-speech-thursday-heres-what-to-expect.html

Contrarian view:

Quote

...  Chairman Jerome Powell gathers the Economic Club of New York for a fireside chat on Thursday.
...
Our call of the day from Macro Tourist newsletter editor, Kevin Muir would tend to agree, as he says Powell’s comments have important bearing on markets for the next two months.

Muir believes some investors way too caught up in recent data that shows a strong economy. “I will not disagree with the analysis that the U.S. economy appears to be running at full steam with no signs of slowing,” Muir writes in his latest blog.

“However, I think they are mistakenly looking solely at the economic data and not considering financial conditions,” and given post-FOMC meeting moves in asset prices, it’s easy to see that the Fed sees the market doing its tightening work for it, he says.

What investors tend to forget, crucially, is that the Fed is a “supertanker that takes a long time to start and stop,” says Muir. And it doesn’t shift direction due to a couple of data points, but rather looks at the whole enchilada and figures out “gradual starts and stops.”

The big debate right now? As economic data has been a little too hot, the bond market thinks the Fed will leave chances of a December hike on the table. Muir says nope, the Fed has paused and it will take some seriously strong economic data to get that hiking campaign restarted.

On Thursday, Muir expects Powell will be more dovish than many investors expect, and confirm what other members have been saying over the past week, suggesting he will echo what Fed Vice Chair Philip Jefferson said recently.

Jefferson: “I will remain cognizant of the tightening in financial conditions through higher bond yields and will keep that in mind as I assess the future path of policy. I will be taking financial market developments into account along with the totality of incoming data in assessing the economic outlook and the risks surrounding the outlook and in judging the appropriate future course of policy.”

A more dovish Fed may not be a green light to buy stocks, said Muir, though he’s considering buying some inflation protected bonds and gold and selling the dollar, and he’s also not sure how bond yields will react due to so many variables. “However, I don’t think betting on a hawkish Powell is the correct play.”
...

https://www.marketwatch.com/story/stanley-druckenmiller-said-central-banks-not-earnings-move-markets-today-is-the-day-to-pay-attention-b6f85147

 

[bernorange 8,385]

JPow live stream:

 

[bernorange 8,385]

"off of the planet, J, off of the planet!" - lulz

[Trey3216 15,452]

"Inflation is still too high, and lower economic growth is needed to bring it down"  came out of his mouth.   Great 

 

 

but hey, it's transitory!!!  

Edited October 19, 2023 by Trey3216

[bernorange 8,385]

JPow indicated they likely stay the course (no hikes) in November and wait for more info before deciding what to do in Dec. Their data has shown signs that long term inflation is reacting to the rate hikes they have done so far, but other data shows there is more work to do. Also, jPow says commercial real estate doesn't affect the TBTF banks, so that industry can be a sacrificial lamb to the inflation targeting altar. Oh - he also said that Tbill yields are beyond the Fed's control - the market is reacting to fiscal policy (federal spending/deficits).

[Claire Voyant 14]

3 minutes ago, bernorange said:

JPow indicated they likely stay the course (no hikes) in November and wait for more info before deciding what to do in Dec. Their data has shown signs that long term inflation is reacting to the rate hikes they have done so far, but other data shows there is more work to do. Also, jPow says commercial real estate doesn't affect the TBTF banks, so that industry can be a sacrificial lamb to the inflation targeting altar. Oh - he also said that Tbill yields are beyond the Fed's control - the market is reacting to fiscal policy (federal spending/deficits).

Yield Curve Control is inevitable