Stock market tips and experiences

[Chick Webb]

Originally Posted by bagekko

Govt assistance programs, SNAP, unemployment, etc are still under disaster rules or actually no rules, so the hurt for the lower end hasn't hit bottom. States are allowed to waive all rules, restrictions, and expiration of peoples benefits for up to 2yrs after the end of a govt declared disaster, so I don't think that has occurred yet.

Other than the slow trickle of 6 Trillion in federal stimulus that has been authorized but not spent, pretty much all of the benefits have reverted to pre-COVID levels. SNAP expansion ended in early 2023 (see infographic below), the increased child tax credit was not extended beyond 2022 and reverted to $1600/per child for 2023 taxes. Even California generally requires you to actually be looking for work to qualify for unemployment benefits again. Shocking, I know...

Most of the world is already in recession, or will be very soon. The Swiss national bank just lowered their benchmark interest rate by 0.25%, in large part because their economy has been shrinking for 4(!) quarters; I remember when we called that a depression, not a recession. The rest of Europe/UK is right behind them and the only real question now is will the ECB of the BoE be the first to cut? China's problems are obvious. Assuming the West doesn't allow them to export their way out of them, it'll take the better part of a generation to get fully back on track. And the Rest of World (RoW) is suffering under the weight of their (too strong) dollar-denominated debt. Growth for them will be very difficult if not impossible.

All of that federal money printing here is dragging things out, but business cycles are business cycles and we'll get there, eventually. The stagnation train is pulling into the station. Jobs in some industries are already hard to get, and people w/o jobs do not spend money unless they have to. If companies panic and start pulling the plug on all of those extra COVID hires, like the tech guys have been doing since last year, the jobs picture will deteriorate quite rapidly. That would tip us into recession - which, compared to an extended period of stagflation would actually, long run, be preferable - and then we'd get some interest rate relief from Powell.

I've been saying this for quite some time and still believe it. Several million people need to lose their jobs before this cycle can end, we get a chance to clean out the deadwood, and a new cycle of properly-grounded growth can begin. Likely that'll be bad for everyone for a while, but it's necessary for a healthy economy.

[Donatello.]

Originally Posted by ASAP

I think people have a real hard time remembering median US household income is 77K... this is no longer a home owner but rather a life long renter at the mercy of landlords... all of their expenses going up up and up is crushing these folks... car payments are at an all time high and as was mentioned insurance and hyperinflation just continue to further the blow...

the govt continues to gaslight nonsense about things being well...

let me tell you - if you are sitting heavy on assets at low rates, make over 6 figures and have consistent cash flow, this doesn't affect you much...

so either there is a TON of these so called well doers... or there is lying all around because the statistics don't align with reality

the absolute best thing that can happen right now is a reset to pre covid... which would necessitate a 30% blow to real estate, the stock market and unemployment would go up...it would also necessitate a reset to old margins... but at least we'd back to a normal environment and rates would slowly fall into a more manageable 5 or so %... think that will happen? it wont... because the govt wont let it happen... in other words, median income earners are screwed and stagflation will continue

[ASAP]

Originally Posted by Chick Webb

Other than the slow trickle of 6 Trillion in federal stimulus that has been authorized but not spent, pretty much all of the benefits have reverted to pre-COVID levels. SNAP expansion ended in early 2023 (see infographic below), the increased child tax credit was not extended beyond 2022 and reverted to $1600/per child for 2023 taxes. Even California generally requires you to actually be looking for work to qualify for unemployment benefits again. Shocking, I know...

Most of the world is already in recession, or will be very soon. The Swiss national bank just lowered their benchmark interest rate by 0.25%, in large part because their economy has been shrinking for 4(!) quarters; I remember when we called that a depression, not a recession. The rest of Europe/UK is right behind them and the only real question now is will the ECB of the BoE be the first to cut? China's problems are obvious. Assuming the West doesn't allow them to export their way out of them, it'll take the better part of a generation to get fully back on track. And the Rest of World (RoW) is suffering under the weight of their (too strong) dollar-denominated debt. Growth for them will be very difficult if not impossible.

All of that federal money printing here is dragging things out, but business cycles are business cycles and we'll get there, eventually. The stagnation train is pulling into the station. Jobs in some industries are already hard to get, and people w/o jobs do not spend money unless they have to. If companies panic and start pulling the plug on all of those extra COVID hires, like the tech guys have been doing since last year, the jobs picture will deteriorate quite rapidly. That would tip us into recession - which, compared to an extended period of stagflation would actually, long run, be preferable - and then we'd get some interest rate relief from Powell.

I've been saying this for quite some time and still believe it. Several million people need to lose their jobs before this cycle can end, we get a chance to clean out the deadwood, and a new cycle of properly-grounded growth can begin. Likely that'll be bad for everyone for a while, but it's necessary for a healthy economy.

your last statement is sad but unfortunately very very true... there is still too much $ floating around and senseless spending ... a reset would only be possible with high unemployment... right now like you said its only tech... but if it hit all industries, the picture would change quick

[bagekko]

Even though the govt ended the covid disaster classification in 2023, states have the ability to modify/enforce the rules for 2yrs after it ended. Its at their discretion to allow exemptions and extensions to people as they please.

Originally Posted by Chick Webb

Other than the slow trickle of 6 Trillion in federal stimulus that has been authorized but not spent, pretty much all of the benefits have reverted to pre-COVID levels. SNAP expansion ended in early 2023 (see infographic below), the increased child tax credit was not extended beyond 2022 and reverted to $1600/per child for 2023 taxes. Even California generally requires you to actually be looking for work to qualify for unemployment benefits again. Shocking, I know...

[ASAP]

is Chassis still around to argue? wholesale inflation still up over expectations

https://www.foxbusiness.com/economy/...ion-april-2024

[chassis]

PPI up 0.1% yoy after 13 months deflating (prices going down). For the record keepers, that is a 1.001x increase in producer prices on a YOY basis. In other words zero inflation.

Manufacturing data muy bueno. Automotive manufacturing is at ATH. Reshoring is real. France is catching on to reshoring. Mexico is a hot market for new factory investment. It’s a de-globalization megatrend.

All good in the neighborhood.

[BMW F22]

Originally Posted by ASAP

is Chassis still around to argue? wholesale inflation still up over expectations

https://www.foxbusiness.com/economy/...ion-april-2024

Why do you even bother? He’s obviously trolling. Best thing to do is ignore.

[Chick Webb]

Originally Posted by chassis

PPI up 0.1% yoy after 13 months deflating (prices going down). For the record keepers, that is a 1.001x increase in producer prices on a YOY basis. In other words zero inflation.

Manufacturing data muy bueno. Automotive manufacturing is at ATH. Reshoring is real. France is catching on to reshoring. Mexico is a hot market for new factory investment. It’s a de-globalization megatrend.

All good in the neighborhood.

I generally refrain from engaging like this, but what in heaven's name is this guy smoking? And in what neighborhood? Seriously.

WRT PPI (Source - BLS PPI Home Page):

The Producer Price Index for final demand rose 0.5 percent in April. Prices for final demand services increased 0.6 percent, and the index for final demand goods moved up 0.4 percent. The index for final demand advanced 2.2 percent for the 12 months ended in April.

WRT Manufacturing (Source - Trading Economics Manufacturing PMI Page):

The S&P Global US Manufacturing PMI fell to 50 in April of 2024 from 51.9 in the previous month, firmly below the market expectations of 52, but revised slightly higher from the flash estimate of 49.9. The reading pointed to the first stall in factory activity this year following three firm expansions. Manufacturers scaled back their purchasing activity to react to a fresh decline in new orders, with surveyees noting a greater extent of caution among clients and reluctance to commit to new business. Still, a drawdown in backlogs of work sustained production enough to record an increase in output levels, but demand for capacity was broadly unchanged as staffing levels edged slightly lower and purchasing activity edged higher. On the price front, input costs accelerated sharply amid higher costs for oil and metals. Looking forward, factories still remained broadly optimistic over output levels for the coming year.

[ASAP]

CPI increase of 0.3 vs 0.4 expected... so below crazy expectations BUT still 3.4% annualized or in other words way above any 2% target... on top of that retail sales were significantly down-

https://www.cnbc.com/2024/05/15/cpi-...-in-april.html

This sounds an awful lot like stagflation to me.

[chassis]

Let’s align on the definition of stagflation.

Will the luminaries in this thread please describe stagflation in 25 words or less, using your own words, no interweb (Google etc) support.

[2000cs]

Originally Posted by chassis

Let’s align on the definition of stagflation.

Will the luminaries in this thread please describe stagflation in 25 words or less, using your own words, no interweb (Google etc) support.

Not a luminary but I’ll bite:

Generally, persistent high inflation at the same time economic growth is low or zero.

More specifically, inflation well above target (I’d say over 6%) for a period of at least several quarters while GDP growth rate is well below target (I’d say 0%-1.2% real), with moderate unemployment (slightly above target or higher).

By those definitions, we don’t have stagflation. We have inflation pretty close to target, slightly above but close, and growth slightly below target. Perhaps I’m mired in the stagflation of the late 1970s but that’s how I see it.

[ASAP]

Originally Posted by 2000cs

Not a luminary but I’ll bite:

Generally, persistent high inflation at the same time economic growth is low or zero.

More specifically, inflation well above target (I’d say over 6%) for a period of at least several quarters while GDP growth rate is well below target (I’d say 0%-1.2% real), with moderate unemployment (slightly above target or higher).

By those definitions, we don’t have stagflation. We have inflation pretty close to target, slightly above but close, and growth slightly below target. Perhaps I’m mired in the stagflation of the late 1970s but that’s how I see it.

Well the govt revised the definition of recession so there is that...

Your definition of stagflation would break the country in like 3 months so that's a bit extreme to say the least. Reality is that inflation is still high, unemployment is consistently rising, retail sales are significantly down, housing market is in a standstill and most gdp growth is coming strictly from govt spending... hate to say it, thats what stagflation looks like in reality.

[Tyga11]

Originally Posted by ASAP

CPI increase of 0.3 vs 0.4 expected... so below crazy expectations BUT still 3.4% annualized or in other words way above any 2% target... on top of that retail sales were significantly down-

https://www.cnbc.com/2024/05/15/cpi-...-in-april.html

This sounds an awful lot like stagflation to me.

You’re just mad you missed the rally. Be real with yourself.

Food is flat / down and shelter is falling also. This is not stagflation but keep spouting those buzz words

[ASAP]

Originally Posted by Tyga11

You’re just mad you missed the rally. Be real with yourself.

Food is flat / down and shelter is falling also. This is not stagflation but keep spouting those buzz words

absolutely wild to correlate the stock market which is pretty much a casino at this point to the health of the economy... yet some still do it... i am very interested in seeing where everyone's darling Tesla goes in the next 6 months...

[other_evolved]

Originally Posted by ASAP

Well the govt revised the definition of recession so there is that...

Your definition of stagflation would break the country in like 3 months so that's a bit extreme to say the least. Reality is that inflation is still high, unemployment is consistently rising, retail sales are significantly down, housing market is in a standstill and most gdp growth is coming strictly from govt spending... hate to say it, thats what stagflation looks like in reality.

No, they did not. People just fail to understand how a recession is defined.

[ASAP]

Originally Posted by other_evolved

No, they did not. People just fail to understand how a recession is defined.

it was always 2 quarters of negative GDP... then they said, it's more complex... like employment lol... well guess what, now we don't have that employment and employment from those days has been revised 5x now...

[Tyga11]

Originally Posted by ASAP

absolutely wild to correlate the stock market which is pretty much a casino at this point to the health of the economy... yet some still do it... i am very interested in seeing where everyone's darling Tesla goes in the next 6 months...

Here is what we know:

- food is flat
- insurance is up
- services are up
- gas is up
- shelter is going down (rent)

If you’re a homeowner you’re being hit hard by insurance but that’s about it. I don’t disagree the poor people are getting hit the hardest especially with rent prices up 30% over the past 2 years but that is easing.

So you’re talking about stagflation with 4% unemployment. If we had stagflation services wouldn’t be up the way they are…

[other_evolved]

Originally Posted by ASAP

it was always 2 quarters of negative GDP... then they said, it's more complex... like employment lol... well guess what, now we don't have that employment and employment from those days has been revised 5x now...

That has always been the casual definition, but not what the NBER actually measures. I've said it before, but the single largest factor to the GDP drops in Q1/Q2 was the YoY decrease in government spending caused by the Covid budget.

[ASAP]

Originally Posted by Tyga11

Here is what we know:

- food is flat
- insurance is up
- services are up
- gas is up
- shelter is going down (rent)

If you’re a homeowner you’re being hit hard by insurance but that’s about it. I don’t disagree the poor people are getting hit the hardest especially with rent prices up 30% over the past 2 years but that is easing.

So you’re talking about stagflation with 4% unemployment. If we had stagflation services wouldn’t be up the way they are…

if you can share the official stagflation definition with officially defined metrics, i'd appreciate that... but it sounds like there is a lot of "leeway" and opinion on this definition... just as it seems there is now with recession...

we do know the following-

inflation is above a 2% target
job losses are mounting
gdp growth is coming from excess govt spending
almost no companies are reporting strong profits and retail sales are down

so i suppose we could argue this for days but we will need "defined" metrics of this

[ASAP]

Originally Posted by other_evolved

That has always been the casual definition, but not what the NBER actually measures. I've said it before, but the single largest factor to the GDP drops in Q1/Q2 was the YoY decrease in government spending caused by the Covid budget.

is the irony that most growth NOW is coming from massive govt spending lol?

[2000cs]

Originally Posted by ASAP

if you can share the official stagflation definition with officially defined metrics, i'd appreciate that... but it sounds like there is a lot of "leeway" and opinion on this definition... just as it seems there is now with recession...

we do know the following-

inflation is above a 2% target
job losses are mounting
gdp growth is coming from excess govt spending
almost no companies are reporting strong profits and retail sales are down

so i suppose we could argue this for days but we will need "defined" metrics of this

Sorry, I was gone a few minutes tearing up my economics degree.

There is no official definition of stagflation. It is a political and media term, not one economists use rigorously. Loosely it means a combination of stagnant economic growth and high inflation, and nothing more than that. Neither “stagnant” nor “high” are specified. I offered my view of those above. But that is just my view.

[other_evolved]

Originally Posted by ASAP

is the irony that most growth NOW is coming from massive govt spending lol?

I mean, the data is out there if you are actually interested. The consumer (us buying things) equates to about 60% of the GDP calculation. Government spending was about flat quarter over quarter as in it didn't add that much to the Q1 GDP figure.