You need to go back to page 1 and see what a few of us were saying at the beginning of 2022 . No guessing that the markets were gonna drop either .......... it was bound to happen . When the Fed is aggressively raising interest rates like it's no ones business the markets are gonna drop .
*Investors Blog*
- Thread starter Warstud
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Yup...you had a 50:50 chance of being correct. Equivalent to calling heads randomly, being correct, and then telling everyone you can predict the future. Then many of you predicted the recovery would be MUCH longer or that we'd already be well into a recession by now or the real estate market would crash or the market would be down for years all of which appear to be incorrect. The prognosticators are back at being correct half the time and wrong half the time at best or they have been wrong significantly more than they've been right.
This has been studied to death and the stats are all consistent...no one knows what is going to happen over a sufficiently long period of time. It is just a fact...
I like the current will to bring semiconductor manufacturing back. Building Intel Ohio and Arizona will create thousands of good paying union jobs. Upon completion, the new fabs will need thousands of workers and local support.
The big SEMI companies, like Applied Materials and Lam Research are investing hundreds of millions of dollars in scholarships to fuel these positions.
I attended SEMICON West on Tuesday to hear the keynotes. The most high tech of the high tech...
The big SEMI companies, like Applied Materials and Lam Research are investing hundreds of millions of dollars in scholarships to fuel these positions.
I attended SEMICON West on Tuesday to hear the keynotes. The most high tech of the high tech...
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I'm torn...my economics textbook written by a Republican says anything that causes wages to be above the equilibrium point, including union jobs, causes a surplus of labor and unemployment.
Not to mention a race to the bottom....I'm torn...my economics textbook written by a Republican says anything that causes wages to be above the equilibrium point, including union jobs, causes a surplus of labor and unemployment.
It wasn't a Crystal Ball prediction it was a prediction based on what has happened in the past when the Fed raises interest rates to slow the economy down . I've been involved in these markets for quite a while and know how it works . I t's best to ignore what the people on Wall Street say is going to happen or how bad the economy is and let the charts tell you when to buy and sell .
If someone constantly predicts a bear market for years they'll eventually be correct.
Yup and technical or fundamental analysis or any combination of the two, regardless if you’re a proud technician or chartist, has been shown time and time again, to be no better at “beating the market” in the long term than random guessing. It’s not that they’re never right, it’s that over the long term they’re still only right as much as random walk theory predicts, which is equivalent to flipping a coin every day to predict if the market will go up or down that day. Many days you’ll be right but many days you’ll be wrong and in the end it shows you will be randomly right and randomly wrong and there is no real predictive value there.
This IS what the data shows. This again falls into the I have no dog in this fight other than I just know what the research on the subject very clearly and consistently show.
As for predicting the market downturn based on interest rates hikes. Yeah, that is about as blunt of a course grain “prediction” as one can make. That requires no special knowledge and even non-financially savvy people could make that “prediction”. If you made money on the way down there good for you but technical and fundamental analysis are still both weak. As I said, it’s not that they’re never correct, they’re just not more correct than guessing over long periods of time and they fail to beat the market over long periods of time.
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BTW…technical analysis vs fundamental analysis vs random walk believers is sort of like Jews, Muslims, and Christians being asked to debate who’s right. All three groups believe their version of reality is correct and it’s unlikely just hearing the other’s perspective is going to change any minds but it’s still important to have these conversations. Not because I’m going to run out today and try my hand at being a technician but because others who aren’t committed to one side or the other may read these posts and be swayed one way or the other.
People looking for their investing philosophy should go read about all three of these concepts.
I have a very nice rental portfolio, so I follow the housing market projections quite carefully. I have no special future predicting skills either, but the experts pretty much all say that mortgage rates will follow the Fed rate down as inflation declines. A more attractive mortgage rate will entice people waiting on the sidelines to buy. This coming demand increase with increasing population will drive real estate prices even higher, especially in TX and FL. Of course this won't apply to the states experiencing an exodus like NY, California, and Illinois.
Half the experts expect the housing bubble to pop and half the experts expect it to surge even more. Who is right? I have no idea. Just going to have to wait and see.
Why? The problem is no one knows the timing of the federal funds rate coming down. Is it going to be 6 months, 12 months, 18 months? Is there still a recession coming where things look better now but not so much in 6 or 12 months? What about a new CV-19 variant that is 50% lethal and makes you bleed from your eyes? Perhaps Russia uses nuclear weapons in Ukraine and the entire world economy reacts? Perhaps, perhaps, perhaps.
The problem is there are 8 billion people and an unfathomable number of constantly moving and unknowable variables in the world. There are just too many unknowns.
TX, FL, let's not forget SC and NC. The land clearing here near the coast of NC is on a scale that is hard to comprehend for my wife and I every time we are driving in our car.
Our new home now near the coast? New phase of a 20 year old community, they cant seem to build the homes fast enough and ALL my neighbors are almost exclusively from the Northeast. NY, CT, NJ some from Ohio and CA
In fact the only reason here for a possible slow down is new homes being built are now about one year + out to completion which is a detriment for those who cant wait.
Photos below, 12 foot high piles of underbrush burning and smoking for weeks. One pile can take 7 days to completely burn out.
This is after the trees are hauled away to the mills and only the left over under brush. Every time you think they are done they clean up more.
First photo shows what an unburned pile looks like, they are about 10 to 12 feet high and there are dozens and dozens of them burned over the last couple months not just the location where the photos are taken but to the right, left and another part of the community.
Good news is for 95% of the time the southerly winds blow it away from our area. Just one morning it was horrible and needed to go inside.
All the above variables (though different) existed since the early days. Its life.
Fact remains there is an exodus from high tax states, it will take years to catchup to the lost production years of covid and currently an insatiable demand for housing.
Rates are not going down anytime soon, inflation will be hard to control when in record time, the most simple task of all, making a cup of coffee those workers pull in up to 45k a year.
It doesnt matter the rates (just my opinion) Homes will adjust to the rate, meaning less included options and size. Let's not forget that rates are still just below the norm before the last 15 years or so. IN places like Long Island NY there is no new construction, resale prices are still insane after all the rate increases. There is way too much money in the system and as a country we pulled out every stop and borrowed every cent (the Fed) to me, will take forever to dry up.
AS far as the market I could care less, even in down markets, good stocks go up and turn into safe havens. Kind if what I experienced with a large holding of WMT during the height of Covid. The next big move I really missed was Meta ... even though I knew it, even though I know it still will keep climbing Im not in it because Im so invested in companies I like that I will have to sell one to buy it. Which I may... who knows.
Since were talking macro - there are several moving pieces I can't put together. History doesn't repeat, it sometimes rhymes, but some of these are never happened before. Maybe others have already figured this out.
M2 money supply went from $15T to $22T. Its still above $21T. Nothing like this has ever happened even on a percentage basis except maybe WW2, but that was spent on stuff that went off to be destroyed, this is staying and sloshing around. If you don't like M2, pick your metric - its the same story. I don't know how inflation can end until we either have creative destruction of this money, or we reach a total inflation corresponding to the money growth - ie around 50% total?
The worlds worker population has flat-lined and starting to decrease. The most efficient workers in the USA - the baby boomers - are retiring in mass. Powel thinks wages are rising too quickly.
A 40 year bond bull market has ended. Its now a bond bear market. Even if the fed drops rates I don't see the corporate bond cat getting back in the bag. There is an interesting note on the fed website about distressed companies. Warning - very dry : https://www.federalreserve.gov/econ...-of-monetary-policy-tightenings-20230623.html
So where this all goes I have no idea. The closest I can think of is 1970-1982 - when stocks and bonds did poorly and housing and commodities did well?
M2 money supply went from $15T to $22T. Its still above $21T. Nothing like this has ever happened even on a percentage basis except maybe WW2, but that was spent on stuff that went off to be destroyed, this is staying and sloshing around. If you don't like M2, pick your metric - its the same story. I don't know how inflation can end until we either have creative destruction of this money, or we reach a total inflation corresponding to the money growth - ie around 50% total?
The worlds worker population has flat-lined and starting to decrease. The most efficient workers in the USA - the baby boomers - are retiring in mass. Powel thinks wages are rising too quickly.
A 40 year bond bull market has ended. Its now a bond bear market. Even if the fed drops rates I don't see the corporate bond cat getting back in the bag. There is an interesting note on the fed website about distressed companies. Warning - very dry : https://www.federalreserve.gov/econ...-of-monetary-policy-tightenings-20230623.html
So where this all goes I have no idea. The closest I can think of is 1970-1982 - when stocks and bonds did poorly and housing and commodities did well?
Doesn't the Fed selling off its huge balance sheet not effectively remove all this M2 money from the economy? Sorry, that's the next chapter in the textbook and I haven't gotten there yet.
In theory yes. But at the current rate it will take a long time, and as soon as there is a blip they raise it again - just liked they dumped $100B back onto their balance sheet during the banking scare in March - highlight blip below?Doesn't the Fed selling off its huge balance sheet not effectively remove all this M2 money from the economy? Sorry, that's the next chapter in the textbook and I haven't gotten there yet.
I think the Fed note I mentioned above is code for this to a degree. The fed doesn't publish notes for funzies. I think there saying to the banking community that they might have to ease to allow these "distressed" companies to borrow.
As an aside - I would guess the issue with your textbook is going to be that is that it was written before anyone could comprehend a global shrinkage of the workforce - because that truly has never happened before, in the last hundreds of years at least. In fact the last 100 years we added both cheap global labor and women to the workforce, which was the opposite.
Again, this is not my day job so I am prepared to be wrong.
JHZR2
Staff member
ATT service is so poor im considering leaving. I suspect many others are doing the same.
They are legitimately a terrible company.
Yes but they like make it up by telling you that you can't use a woodstove. So just go to the store and buy a package of Ball Park Franks and take the family over and enjoy!
