It seems people think the government, Fed, etc control the economy, both good and bad. No.
*Investors Blog*
- Thread starter Warstud
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Nope, the central banks have their blunt instruments to try and influence what they can but it’s the other 8 billion humans and how they choose to manage their scarce resources that determines the economy.
Central banks do make convenient villains though…
Sure, you’re measuring from the start of the rate hikes which initially, just like this last round, do nothing to curb spending. Those rate hikes might be over 12-18 months because the idea is to do enough to get the job done but not too much. Also, capital spending on projects doesn’t start, stop and/or change direction on a dime. A corporation has to plan a new factory and build the factory and that takes time. Not everyone is going to totally change directions with the first few rate hikes. During that time sales maybe fluctuating too until they finally come to the realization that building that factory doesn’t make sense and the jobs that would’ve been created building it and staffing it disappear because borrowing costs are now too high.
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In the last 3-plus decades, Fed rate cuts have not capped off a “soft landing,” but actually immediately preceded periods of large spikes in the unemployment rate. That's the point of that chart I posted.
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Looks like - according to the chart - 1 or less years.
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I know that's what they teach in school, but in practice it seems their mandate is to keep the government's massive interest payments to a minimum. And to keep the stock market afloat.
The show is almost over. $1 million for a starter home imminent.
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Well, they are responsible for the cost of money, aren't they? I'm sure you know what really caused the Great Depression...
Btw, you can actually deflate your currency and grow the economy long-term, rather than cause a crisis. See: China. Though, that is no longer an option to us since we are just a consumer economy at this point.
The shortest period is the green lines, which is almost 2 years (5/1999 to 1/2001). The longest is the red lines (5/2004 to 1/2007) , which is almost 3 years.
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I like the quasi-power move you just tried there…lol. Yup, all we do is talk about pie-in-sky theoretical stuff and we never look at real historical data and case-studies of what actually happened guided by real economists who all work for a living making real assessments and decisions about the economy. Maybe one day I’ll make it into the “real world” and learn the truth. Please, stop why you’re only a little behind.
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The Fed does not own or run the economy. I am not sure where you are going with all of this, but we are experiencing a soft landing.
Then there are those who continue to say there is no landing; the economy continues to boom.
There simply is no recession.
Overall businesses are showing strong balance sheets and the unemployment rate continues to be below average.
The Feds have leverage; interest rates are still high. They could stave off a recession by lowering rates. Again, this is their tool, even if it is a poor one.
The chances of recession have dwindled greatly; models and experts have been wrong for the last few years.
The great viral reset changed many things. We are still not on an even keel after that. Someone mentioned real income growth I believe. That graph is telling.
Im just loosely following the last page or two because my mind is closed (which is rare) to many posts about past events, past charting, past predications and past reality.
Anything that happened before 2008 is irrelevant as we are now in a completely new operating mode never before in the history of the nation, so how can we post results based on the past? The past is nothing compared to the current.
By this I mean =
The American public is clueless and it will fail one day when they realize that there is no more money to bail them out for their foolish ways of debt.
https://fred.stlouisfed.org/series/GFDEGDQ188S
There is no going back, the cat is out of the bag and the public will never vote for pain to get this mess cleared up, so one day it will be forced on us. In the meantime, foolish or not, Im fully in the market. Im not going to change my mind on that anytime in the next 24 hours .
One thing for sure, the Fed, the powers that be, will continue to pander and steal to keep the voters happy until they can not any longer, so I think we have a way to go in this market, it will only crash when options do not exist and that will be along time yet but they will come... just my thoughts, hope Im right *LOL* All I know, I lived the best of times in the USA!
Really though, we need to take these things into account when using past indicators because never in history has current debt and borrowing as a percentage of GDP been this high.
Further what will happen during the next downturn that the public expects to get "bought out" of when we are starting at an all time low already ?
https://fred.stlouisfed.org/series/FYFSD
Maybe Im NuTs but I find these numbers staggering
https://fred.stlouisfed.org/series/GFDEBTN/
BTW not taking a position but just explaining I dont know how past data can be put into today economic situation... Dont know if I am right... but my thoughts.
Anything that happened before 2008 is irrelevant as we are now in a completely new operating mode never before in the history of the nation, so how can we post results based on the past? The past is nothing compared to the current.
By this I mean =
The American public is clueless and it will fail one day when they realize that there is no more money to bail them out for their foolish ways of debt.
https://fred.stlouisfed.org/series/GFDEGDQ188S
There is no going back, the cat is out of the bag and the public will never vote for pain to get this mess cleared up, so one day it will be forced on us. In the meantime, foolish or not, Im fully in the market. Im not going to change my mind on that anytime in the next 24 hours .
One thing for sure, the Fed, the powers that be, will continue to pander and steal to keep the voters happy until they can not any longer, so I think we have a way to go in this market, it will only crash when options do not exist and that will be along time yet but they will come... just my thoughts, hope Im right *LOL* All I know, I lived the best of times in the USA!Really though, we need to take these things into account when using past indicators because never in history has current debt and borrowing as a percentage of GDP been this high.
Further what will happen during the next downturn that the public expects to get "bought out" of when we are starting at an all time low already ?
https://fred.stlouisfed.org/series/FYFSD
Maybe Im NuTs but I find these numbers staggering
https://fred.stlouisfed.org/series/GFDEBTN/
BTW not taking a position but just explaining I dont know how past data can be put into today economic situation... Dont know if I am right... but my thoughts.
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Yes it will not happen at the exact start of the very first rate cut. Don't be daft. But, just starting at the beginning of the chart, there were sharp rate cuts in 1990, for example, with the 1991 recession soon following. That pattern repeats itself during every single rate cut cycle. It's inarguable.
No reason to think this time will be different. We can ponder whether the tail wags the dog or vice versa. It matters not.
The Fed is set to cut rates, and that is the beginning of the end for this current cycle. "Soft-landing" is not an economic term, sorry to say. Never saw it in a single text book. It might be something folks read about over at Investopedia, but it's by no means a well-defined, quantifiable metric.
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I'm sorry you chose to view it that way. Sorry I had to spit my coffee out when I heard the "2% Fed mandate". It's just not what happens in practice. Nothing personal.
Am I really the as*hole here for pointing out that economic theory and reality are worlds apart? You don't need an MBA to see that. Everyone on BITOG understands it intuitively.
Btw, you never did mention what sector your business was in.
Decided to take a loss on NVDA today. (Im always upfront on my trades)
Typically I hate Tech stocks but I purchased (before the split) in June at split price $120.88 and sold minutes ago at $117.21 (or so I Thought until this post! *LOL*LOL*) DARN IT! Stupid Schwab, my fault, I hit the "Sell Tab" and clicked sell and confirmed. I sold one share!
I just went back and took another small hit and "Sold ALL" at $116.97
I hate that and have done it more than once.
Im not resting easy with NVDA, they are doing great, so much business they cant keep up but its in the price the way I see it so. My trades are typically short term and if something doesnt behave like I expect, here we are a couple months later, I cut it loose. I have preserved a lot of money with that attitude and missed not that much in gains.
I am still big on META and deciding if I buy more with the funds or possibly split it with more WMT ... My brain loves the prospects of META but its a tech stock ... WMT will continue to climb, even if they miss tomorrows earnings, its always a matter of time before it regains, not always true with tech.
Anyway, took a 3% loss on NVDA today and I am glad that is all it is, a big nothing to me, of course I rather not but I dont sweat small stuff.
Now I think I will go do the house wash thing and ponder my next move, all in at Meta? WMT? or mix of both? Sit on the side and hope to get META cheaper? I hope it goes down, I hate paying more for something I already own but I suspect I might.
Typically I hate Tech stocks but I purchased (before the split) in June at split price $120.88 and sold minutes ago at $117.21 (or so I Thought until this post! *LOL*LOL*) DARN IT! Stupid Schwab, my fault, I hit the "Sell Tab" and clicked sell and confirmed. I sold one share!
I just went back and took another small hit and "Sold ALL" at $116.97
I hate that and have done it more than once.
Im not resting easy with NVDA, they are doing great, so much business they cant keep up but its in the price the way I see it so. My trades are typically short term and if something doesnt behave like I expect, here we are a couple months later, I cut it loose. I have preserved a lot of money with that attitude and missed not that much in gains.
I am still big on META and deciding if I buy more with the funds or possibly split it with more WMT ... My brain loves the prospects of META but its a tech stock ... WMT will continue to climb, even if they miss tomorrows earnings, its always a matter of time before it regains, not always true with tech.
Anyway, took a 3% loss on NVDA today and I am glad that is all it is, a big nothing to me, of course I rather not but I dont sweat small stuff.
Now I think I will go do the house wash thing and ponder my next move, all in at Meta? WMT? or mix of both? Sit on the side and hope to get META cheaper? I hope it goes down, I hate paying more for something I already own but I suspect I might.
Before you call me "daft", go back and read post 4276 again so you can understand what's going on between interest rates and unemployment. If interest rates rise, that causes unemployment to rise. If interest rates are cut, that causes unemployment to go down. It typically takes nearly 2 years, sometimes nearly 3 years, to see the full reaction, And not every case is a carbon copy of the other cases.
https://bobistheoilguy.com/forums/threads/investors-blog.351194/post-6979890
Then look at the chart again and realize that the rate cut in 1990 you're talking about didn't have an effect until mid 1992, so again it took almost 2 years. "Daft" would be someone who can't seem to read the time scale right on that graph. There is never a reaction lag of a year or less in a typical case.
If the Feds cut the interest rate soon (probably small cuts to not whip lash the economy), I'd expect unemployment to slowly start decreasing as a result ... but it could take nearly 2 years for the economy to fully react as seen in many cases in that graph.
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I don't see any real down turn yet. Must be all the people making money in the stock market.
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So-called "soft landings" are non-quantifiable, nor has the Fed ever successfully achieved one in the last several decades (whatever that even looks like, because it remains undefined). I made a case for this, accompanied by actual data and charts.
If there is a soft landing in our presence, I'd sure like to see some evidence indicating such. Is it a "soft landing" straight into a recession? I'm confused.
Lastly, folks needn't get all bent out of shape because I disagree with whatever narrative is being pushed here on said "soft landing". That's a red flag indicating to me there is some sort of ulterior motive.
If someone disagrees, fine. State your case and back it up with data.
Based on that graph, it looks like the sweet spot for unemployment is in the 4 to 6% range. If they start slowly cutting rates now, it should slow down the unemployment and probably keep it in that range by the time it fully reacts. Keeping the unemployment lower than not should help the economy grow (not cause a recession), but that could also keep inflation from coming down much more ... economic growth might even cause another slight increase in inflation if unemployment becomes relatively low. Like said before, I'd like to see the inflation curve on that same graph. All you can do is wait and see, but I don't see any real signs of some full blown "recession" happening anytime soon.
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