*Investors Blog*

[BrainThicknessVariation]

He was referring to political discussion.

You are free to talk about the economy.

Thanks. I don't recall making any political commentary. I will do my best to avoid it!

 

[PWMDMD]

Correct, 818k jobs we thought existed, disappeared. You can spin it any way you want. If the number was 10 million, would it be no big deal too because they "simply never existed"? Ya, sounds pretty ridiculous doesn't it.

Re: "freaking out" - this is good news for the market, hence what you perceived as not a big deal. We are in the "bad news is good news" stage. We are now moving to there likely being 25bp cuts in the next successive 4 meetings, for a grand total of 100 bps. That's bullish for the market...

I agree if it was 10M that would’ve been terrible because that would’ve meant we actually lost 7.1M real jobs. But it wasn’t 10M jobs, and the jobs that were real were still a good number of jobs. As usual, your comment is nonsense.

 

[BrainThicknessVariation]

I agree if it was 10M that would’ve been terrible because that would’ve meant we actually lost 7.1M real jobs. But it wasn’t 10M jobs, and the jobs that were real were still a good number of jobs. As usual, your comment is nonsense.

What is nonsense about 818k jobs disappearing overnight, sir? Explain for the plebes.

 

[PWMDMD]

What is nonsense about 818k jobs disappearing overnight, sir? Explain for the plebes.

Equating 800K jobs that still left healthy job growth to 10M jobs which would’ve been devastating. You seem like a bright person but you’re more interested in trying to prove you’re the smartest person in the room than actually having a meaningful discussion and it’s tedious and exhausting and it goes nowhere. So…I wish you well.

 

[BrainThicknessVariation]

Equating 800K jobs that still left healthy job growth to 10M jobs which would’ve been devastating. You seem like a bright person but you’re more interested in trying to prove you’re the smartest person in the room than actually having a meaningful discussion and it’s tedious and exhausting and it goes nowhere. So…I wish you well.

Say what you want, but it is the **Second Worst Revision In US History**.

We can have a meaningful discussion, I just can't do anything with "the jobs were great". I'm not offended if you disagree, however it does seem that my stance is drawing your ire.

 

[JeffKeryk]

Say what you want, but it is the **Second Worst Revision In US History**.

We can have a meaningful discussion, I just can't do anything with "the jobs were great". I'm not offended if you disagree, however it does seem that my stance is drawing your ire.

You are still missing the point. The correct(?) revised lower number is showing a slowly cooling economy, aka soft landing, so the Fed believes it is time to lower the Prime.

I agree the miss was a big one; there no doubt. The lower jobs number, while still growth, is a good sign for the economy. It is cooling which slows the rate of inflation while avoiding a recession. No heavy hand from the Feds.
This economy is bulletproof. If you don't think so, ask the rest of the world.

From Investopedia:
A soft landing is a painless ending to a moderate economic slowdown. The term implies that the economy has returned to growth without a period of severe recession.

 

[SC Maintenance]

Millions of jobs did not disappear over night. These aren’t real people losing jobs - they simply never existed. Even with the 800K jobs not existing, job growth was still robust, just not as robust as thought, and so little has changed based on the revised jobs report.This is part of the reason why the market did not freakout. It was already factored in and it doesn’t change the outlook all that much.

The thing we know as the GDP number is really just an initial estimate. One of the larger inputs iinto that estimate is jobs. Of course its not the only input into that number, but still I wouldn't be surprised to see the GDP estimates revised down next go around.

When CEO's see the economy slowing they tend to shed jobs, or at minimum stop hiring. So its a self feeding cycle.

So the only reason it matters is if CEO's read the tea leaves and decide they need to get ahead of it. If they do not, then no it does not matter. However one of the reasons the Sahm rule triggered a sell off was that every other time it triggered the unemployment rate went much higher.

In the end the stock market is not the economy either.

 

[JeffKeryk]

You miss the point as well. But ok

Also you really can’t undo 12 months of bragging

Pablo, perhaps check out a few economic periodicals; perhaps they are bragging as well? All good.
The Economist

 

[Pablo]

The only fact we have is there was an old feeble geezer on TV bragging about how many jobs he created every month and that will never be retracted.

I am grateful we can have greater control on the money supply and peripteral control on business activity with government loan interest rates but until we properly harness government spending we remain at the mercy of the mood of the American consumers.

 

[JeffKeryk]

I respectfully disagree about the soft landing and the economy is bulletproof.
How would things be if trillions and trillions of cash NOT pumped into economy ?

I have to admit I’m doing very well….. the average American is not doing so well and barely making it with everything that’s going on. Look at all the debt and defaults. Three generations of families living under one roof.

There’s a few folks that I talk to by PM and know how I feel about this puppet show…..
They know who they are.

I just hit an all time high today in my Vanguard account and Fidelity 401K.
Thanks Joe, Janet and Jerome, keep up the great job.

How do you know the average American is not doing well?
That's a talking point not based on current studies.

 

[JeffKeryk]

Re: "agenda" - They say "every accusation is an admission"

When I see a million jobs disappear overnight, “soft landing” is the last thing that comes to mind. Sorry you don’t like the data, that’s not my problem.


I don't even know what this means.

What I think you mean is, the Fed needs to choke off inflation while being cognizant of the deteriorating employment situation. If that's the case, then we are in agreement. So-called "stagflation".

I suggest you look up stagflation; it is quite the opposite of today's economy.
Stagflation is a combination of three economic conditions that occur simultaneously:

• Slow economic growth: Also known as stagnation, this is when total output in an economy is either declining, flat, or growing slowly. Evidence of stagnation includes persistent unemployment, flat job growth, no wage increases, and a lack of stock market booms.
  
  
• Rising prices: Also known as inflation, this is when consumer prices increase rapidly.
  
  
• Rising unemployment: This is when unemployment rates rise.
  

 

[BrainThicknessVariation]

The thing we know as the GDP number is really just an initial estimate. One of the larger inputs iinto that estimate is jobs. Of course its not the only input into that number, but still I wouldn't be surprised to see the GDP estimates revised down next go around.

When CEO's see the economy slowing they tend to shed jobs, or at minimum stop hiring. So its a self feeding cycle.

So the only reason it matters is if CEO's read the tea leaves and decide they need to get ahead of it. If they do not, then no it does not matter. However one of the reasons the Sahm rule triggered a sell off was that every other time it triggered the unemployment rate went much higher.

In the end the stock market is not the economy either.

The thing about GDP is the so-called "Crowding Out" (and Multiplier) Effect. Basically, the government spends a lot of money, in turn the Private sector spends a lot of money, and since that is one of the inputs of GDP, GDP goes up, and due to the multiplier, sometimes more than just the sum of Government Spending.

I have been reading up on the Sahm Rule and depending on who you talk to, we are already in the midst of a recession. Even if you disagree with that position, discounting the anomaly of Covid, we are actually at a 7-year high in civilian unemployment...

 

[alarmguy]

I think we are experiencing the greatest of easy times in the history of the country, enjoy it while you can, all the gloom and doom is mass media. The gloom should be focused on why it is happening and that is solely because of the national debt. Someday, have no clue when, 10 years? sooner or later it has to stop I think, but we do not know because never in history have we been here.
http://usdebtclock.org

All I know is I am really upset I sold my NVDA ... at least until Wed, maybe I'll get a chance to buy it back or maybe I should just have bought it. Ive had nice run over the years but this was one timing miss step. Im in fully with WMT and META ... and have 1/3 cash sitting on the side and feeling like I missed a great chance with either NVDA or GM ... but that can change on Monday, who knows.
Stupid me, I am so annoyed *LOL*

 

[Pablo]

I bought so many bond funds I sold a couple of them into the monster rally. I sold WDI and WEA, because well the head guy is out and SEC probe coming in. Some odd trading practices, but no details.

HYB up 15%, SPLB up 12%, AWF up 19%, and so on, in short order while throwing out dividends.

I own nothing in the red (unusual!! hahahhaa) except some covered calls which just means they are in the money and thusly limit my upside (mostly on VICI)

 

[JeffKeryk]

I think we are experiencing the greatest of easy times in the history of the country, enjoy it while you can, all the gloom and doom is mass media. The gloom should be focused on why it is happening and that is solely because of the national debt. Someday, have no clue when, 10 years? sooner or later it has to stop I think, but we do not know because never in history have we been here.
http://usdebtclock.org

All I know is I am really upset I sold my NVDA ... at least until Wed, maybe I'll get a chance to buy it back or maybe I should just have bought it. Ive had nice run over the years but this was one timing miss step. Im in fully with WMT and META ... and have 1/3 cash sitting on the side and feeling like I missed a great chance with either NVDA or GM ... but that can change on Monday, who knows.
Stupid me, I am so annoyed *LOL*

These are the best of times and these are the worst of times...

I hope you did well on your NVDA transactions. I hate selling because of the taxes incurred, among other things. Why incur the tax cost unless you need the money now, unless your crystal ball tells you to sell? The tech I own is loooong term.

 

[Dave Hess]

How do you know the average American is not doing well?
That's a talking point not based on current studies.

Stagnant wages, small raises at work, crazy inflation, cost of living increasing exponentially, costs to raise a family (kids very very expensive), housing very expensive, credit card debt, low savings rate, low retirement contributions, healthcare / dental care costs, etc…

I don’t want to argue the fact that older affluent folks are in a much different situation than “the average American” with 3 kids and trying to live the American Dream in 2024.

I told the story of my dad being an A&P mechanic for PanAm and supported a family of 6 on one paycheck.
That was easy to do in 1970…… impossible to do the same in 2024.

 

[BrainThicknessVariation]

Evidence of stagnation includes persistent unemployment, flat job growth, no wage increases, and a lack of stock market booms.

Unemployment is on an uptrend. In fact, civilian unemployment is at a 7-year high when accounting for the Covid anomaly. If you want to add Covid back in just for the heck of it, we're still at a 3-year high, Not good, either way.

I'm not aware of any material **real** wage growth lately in the United States. Real Average Hourly Earnings have been quite stagnant for the last 7 years as well.

There is nothing in the definition of stagflation that references the stock market...

That pretty much 's all your stagflation boxes.

 

[BrainThicknessVariation]

You are still missing the point. The correct(?) revised lower number is showing a slowly cooling economy,

This number was known months in advance if you went over to any of what you called "conspiracy websites". The Philly Federal Reserve actually said as much in a report they released I believe in March.

I'm not sure how you can call the second biggest downward revision in history a "slowly cooling economy", especially in the face of unemployment on a 7-year uptrend.

 

[PWMDMD]

Stagnant wages, small raises at work, crazy inflation, cost of living increasing exponentially, costs to raise a family (kids very very expensive), housing very expensive, credit card debt, low savings rate, low retirement contributions, healthcare / dental care costs, etc…

I don’t want to argue the fact that older affluent folks are in a much different situation than “the average American” with 3 kids and trying to live the American Dream in 2024.

I told the story of my dad being an A&P mechanic for PanAm and supported a family of 6 on one paycheck.
That was easy to do in 1970…… impossible to do the same in 2024.

Stagnant wages - Not here. My payroll is up 25% in 4 years and national data says wage growth is outpacing inflation.

Cost of living increasing exponentially - Up? Yes! Exponentially? No.

Costs to raise a family (kids very very expensive) - sure, has always been expensive but this is not a separate item from inflation.

Housing very expensive - sure, definitely hitting those who don’t own and are overextended with rates up right now.

Credit card debt - Yup, definitely spiked after going down during CV-19

My problem with the above is I still don’t have a crystal ball to be able to predict where this is going or to what extent it’s going there and so I still rely on the 30,000 foot measures like GDP, jobs, etc. As rates come down and with wages up will there be a turning point where some of these start getting better before we hit some irreversible point of no return and recession. I just don’t know.

 

[BrainThicknessVariation]

Credit card debt - Yup, definitely spiked after going down during CV-19

"Nearly one-fifth of Americans have ‘maxed out’ their credit cards as inflation and high interest rates push delinquencies to 3-year high"

Even the credit agencies are noticing:

"It’s no surprise that in this economic climate, one in which the cost of living is significantly higher relative to a decade ago, younger consumers are increasingly turning to credit products to bridge their financial needs,” Jason Laky, executive vice president and head of financial services at TransUnion, said in a press release for the report. “As long as inflation remains elevated and the cost of goods remains so as well, balances…are likely to continue to grow.”