Is the stock market going to tank?

[Brock Landers]

Defaults are around 1%. Very low. Is that concerning? Only if you’re chicken little.

More debt and leverage? Interest rates are...what you could say...low. And maturities are pushed out at least 3 years.

Sky is falling going on 10 years. Benny have you even learned Italian yet??

[shroom]

i still think that debt is accessed too easily. a lot of high paid jobs backed by fluff as bro called out (good summary). i definitely fall in this camp; it’s a difficult thing for a lender to measure.

brock posts in a suit and ski boots [and i support it]

[Benny Profane]

So China says they're growing at 6% but their trading partners are all in recession or headed towards one. Maybe we can divine something from econometrics to offset this disturbing reality.

It's not all trade. They're still buiding infrastructure.

[digitaldeath]

The money comes slowly

[rideit]

I really wish the USoA would learn a thing or two from China in this regard. You could fuel growth in the states for decades just rebuilding core infrastructure for the next century. Would be a tailwind to productivity for another 100years as well. It's good business, good statecraft, good politics, etc.

Devil’s advocate question, how would we pay for it?
Reduce the military in half?
(In general I agree with the sentiment, though)

[tripice351]

Call it the Bro New Deal.

Smart roads (built in wireless charging, autonomous driving logistics) are going to be insanely expensive to build out nationwide anytime soon. But with it brings increased productivity, reduced healthcare liabilities, etc that will benefit society and offset costs.

Oh, and in the mean time redo all the existing highways for us gas burners. That'd be nice.

Or, we could spend trillions more on wars. What could go wrong?

[Benny Profane]

https://thereformedbroker.com/2019/0...ve-management/

[gravitylover]

.......

In doing something like this you would actually produce the economic output gains that would justify deficit spending. Unlike prior misadventures of supply-oriented tax breaks & ill-fated foreign wars, there would actually be a payoff to moving in this direction. Pair it with right-sizing the military complex & you could find a sustainable budget for the longer term.

I've been saying this for nearly 30 years. Good thing I wasn't holding my breath waiting to see it start to happen.

[4matic]

https://thereformedbroker.com/2019/0...ve-management/

/\ charges 1% of assets to index your money.

[rideit]

Posted this in polyass, curious what you guys think.

https://www.cnbc.com/2019/09/02/here...shing-red.html

[4matic]

A recession is not necessarily bad for equity. A lot of growth has been pulled forward recently through fiscal and geopolitical pressure.

Historical signals are less reliable when price discovery has been mitigated by central banks

The yield curve has been flat for so long I'm not sure it means much

The whole complex of negative and low sovereign rates is dangerous for too many reasons to list but structural risk to currency and debt relationships is the biggest risk out there in my view.

[Benny Profane]

/\ charges 1% of assets to index your money.

Well, that's for stupid people.

[Harry]

The sad part is it has next to zero traction because incentives in the legislature are inverted against the populace. Hope is dead.

Quoted for truth.


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[liv2ski]

September, a good time to sell and go on vacation for a bit.

Our massively inflated debt-fueled standard of living is completely and utterly dependent on the continual creation of more debt.

In essence, this study found that without debt we wouldn’t have much of an economy at all. In fact, Bloomberg says that U.S. per capita income would collapse from $66,900 a year to “negative $4,857”…

To get this somewhat dystopian measure, Bloomberg took each economy’s 2020 GDP as projected by the International Monetary Fund as a starting point. We then adjusted the number by removing the ability to borrow, while adding reserves to create an alternative wealth measure.

U.S. per capita income of $66,900 would be slashed to a negative $4,857 using this measure. That’s a total loss of almost $72,000 for every man, woman and child.

So the only thing keeping us from complete and total economic collapse is the fact that debt is flowing like wine.

But what would happen if some sort of major national crisis erupted someday and all of a sudden everyone was afraid to lend money?

That is something to think about, because such a scenario may be a whole lot closer than many people might think.

As it stands, we appear to be on the precipice of the worst economic downturn since the last financial crisis, and our trade war with China just went to an entirely new level as the month of September began…

The biggest reason for last week’s torrid stock market rally was rekindled “optimism” that the escalating trade war between the US and China may be on the verge of another ceasefire following phone conversations, fake as they may have been, between the US and Chinese side. This translated into speculation that a new round of tariffs increases slated for this weekend may not take place or be delayed.

However, that did not happen, and with no trade deal in sight, at 12:00am on Sunday, the Trump administration slapped tariffs on $112 billion in Chinese imports, the latest escalation in a trade war that’s ground the global economy to a halt, sent Germany into a recession, and given the market an alibi to keep rising because, wait for it, “a trade deal is imminent.”

Only, it isn’t, and 1 minute later, at 12:01am EDT, China retaliated with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. goods. The target list strikes at the heart of Trump’s political support – factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down.

The Chinese knew that these tariffs were about to go into effect, and so they were ready and waiting to retaliate just one minute later.

Of course many U.S. companies will be hit extremely hard by these tariffs that the Trump administration just implemented. The following comes from CNBC…

That means that when an electronics company imports a TV, or a smart speaker, or a drone from China starting September 1, it will have to pay a 15% tax to the U.S. government.

Eventually, this will end up raising prices on gadgets and other products for people in the United States, said Bronwyn Flores, a spokeswoman for the Consumer Tech Association (CTA), a trade group that represents 2,000 different companies in the electronics industry, including brands like Apple and LG and retailers like Walmart and Best Buy.

Basically, people are not going to be able to buy as much stuff during the holiday shopping season, and overall economic activity will be slower than it otherwise would have been.

Meanwhile, President Trump continues to sound hopeful that trade talks with China will bear fruit…

President Donald Trump said trade talks with Beijing are still planned for September after a new round of tariffs went into effect on Sunday.

“We are talking to China, the meetings in September, that hasn’t changed,” Trump told reporters Sunday on the White House South Lawn after returning from Camp David.

These sorts of comments helped stabilize the financial markets last week, but if there was any hope that a trade agreement was imminent we would not have seen both sides impose new tariffs on Sunday.

And now we are moving into the month that is traditionally the worst for Wall Street. The following comes from Fox Business…

Investors may breathe a sigh of relief that August, typically a volatile month for stocks, is over, but history shows that September could be even worse for Wall Street.

Since 1950, September has been the worst month for the S&P 500 Index, which has dropped, on average, 0.5% during the month, a phenomenon referred to as the September effect. According to Dow Jones market data, the average decline of the Dow Jones Industrial Average in September is 1%, while the Nasdaq Composite generally sees an average fall of 0.5%.

We shall see what this September brings. Certainly things are really shaky on Wall Street right now, and any piece of really bad news is likely to set off another wave of panic.

Without a doubt, the market is more primed for a crash than it has been at any point since 2008, and it definitely will not take much to make this a “September to remember”...

https://www.zerohedge.com/news/2019-...depression-new

[4matic]

Says Zerohedge every day for the last 10 years. Nonsense:

Even before the United States was founded in 1776, debt existed. Paying for the American Revolutionary War (1775 - 1783) was the start of the country's debt. Some of the founding fathers formed a group and borrowed money from France and the Netherlands to pay for the war.

To manage the new country's money, the Department of Finance was created in 1781. The next year, Government debt was reported to the public for the first time. The U.S. debt in 1783 totaled $43 million. That year, Congress was given the power to raise taxes to cover the Government's costs. However, the taxes did not bring in enough money. The debt continued to grow as the Government grew and provided more services to the people.

The Continental Congress, forerunner to the U.S. Congress, did not have the power to tax citizens, and the debt continued to grow. By 1790, it had topped $75 million, with a 30 percent debt-to-GDP ratio, according to an accounting presented that year by Alexander Hamilton, the first secretary of the U.S. Treasury.

[Benny Profane]

Yes, there is an enormous amount of debt, absurd amount, relative to history (most either forget or don't even know of historical restrictions and bans on usury, which, certainly, 28% interest rate on cards, is). Furgetabout China right now. But, Zerhedge? Really? They predicted the end of the world ten years ago. C'mon. As long as rates stay close to zero, and the developed world's population becomes and stays very old, there won't be any "crashes" or "disasters". Just, the rich getting richer and the poor getting poorer, which leads to revolution and war, not financial crashes. But, if you hear of the market being fueled by easy, cheap margin loans, run.

[retirwntm]

Is Benny saying zerohedge was always cuckoo for coco puffs? There is some serious revisionist history right there. There were times when Benny quoted ZH multiple times in a thread in minutes - and usually about the impending end of the world. 🤦♂️


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[Benny Profane]

Is Benny saying zerohedge was always cuckoo for coco puffs? There is some serious revisionist history right there. There were times when Benny quoted ZH multiple times in a thread in minutes - and usually about the impending end of the world.


Sent from my iPhone using TGR Forums

Really. Do tell. Are you drunk?

[neufox47]

September, a good time to sell and go on vacation for a bit.

Our massively inflated debt-fueled standard of living is completely and utterly dependent on the continual creation of more debt.

In essence, this study found that without debt we wouldn’t have much of an economy at all. In fact, Bloomberg says that U.S. per capita income would collapse from $66,900 a year to “negative $4,857”…

To get this somewhat dystopian measure, Bloomberg took each economy’s 2020 GDP as projected by the International Monetary Fund as a starting point. We then adjusted the number by removing the ability to borrow, while adding reserves to create an alternative wealth measure.

U.S. per capita income of $66,900 would be slashed to a negative $4,857 using this measure. That’s a total loss of almost $72,000 for every man, woman and child.

So the only thing keeping us from complete and total economic collapse is the fact that debt is flowing like wine.

But what would happen if some sort of major national crisis erupted someday and all of a sudden everyone was afraid to lend money?

That is something to think about, because such a scenario may be a whole lot closer than many people might think.

As it stands, we appear to be on the precipice of the worst economic downturn since the last financial crisis, and our trade war with China just went to an entirely new level as the month of September began…

The biggest reason for last week’s torrid stock market rally was rekindled “optimism” that the escalating trade war between the US and China may be on the verge of another ceasefire following phone conversations, fake as they may have been, between the US and Chinese side. This translated into speculation that a new round of tariffs increases slated for this weekend may not take place or be delayed.

However, that did not happen, and with no trade deal in sight, at 12:00am on Sunday, the Trump administration slapped tariffs on $112 billion in Chinese imports, the latest escalation in a trade war that’s ground the global economy to a halt, sent Germany into a recession, and given the market an alibi to keep rising because, wait for it, “a trade deal is imminent.”

Only, it isn’t, and 1 minute later, at 12:01am EDT, China retaliated with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. goods. The target list strikes at the heart of Trump’s political support – factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down.

The Chinese knew that these tariffs were about to go into effect, and so they were ready and waiting to retaliate just one minute later.

Of course many U.S. companies will be hit extremely hard by these tariffs that the Trump administration just implemented. The following comes from CNBC…

That means that when an electronics company imports a TV, or a smart speaker, or a drone from China starting September 1, it will have to pay a 15% tax to the U.S. government.

Eventually, this will end up raising prices on gadgets and other products for people in the United States, said Bronwyn Flores, a spokeswoman for the Consumer Tech Association (CTA), a trade group that represents 2,000 different companies in the electronics industry, including brands like Apple and LG and retailers like Walmart and Best Buy.

Basically, people are not going to be able to buy as much stuff during the holiday shopping season, and overall economic activity will be slower than it otherwise would have been.

Meanwhile, President Trump continues to sound hopeful that trade talks with China will bear fruit…

President Donald Trump said trade talks with Beijing are still planned for September after a new round of tariffs went into effect on Sunday.

“We are talking to China, the meetings in September, that hasn’t changed,” Trump told reporters Sunday on the White House South Lawn after returning from Camp David.

These sorts of comments helped stabilize the financial markets last week, but if there was any hope that a trade agreement was imminent we would not have seen both sides impose new tariffs on Sunday.

And now we are moving into the month that is traditionally the worst for Wall Street. The following comes from Fox Business…

Investors may breathe a sigh of relief that August, typically a volatile month for stocks, is over, but history shows that September could be even worse for Wall Street.

Since 1950, September has been the worst month for the S&P 500 Index, which has dropped, on average, 0.5% during the month, a phenomenon referred to as the September effect. According to Dow Jones market data, the average decline of the Dow Jones Industrial Average in September is 1%, while the Nasdaq Composite generally sees an average fall of 0.5%.

We shall see what this September brings. Certainly things are really shaky on Wall Street right now, and any piece of really bad news is likely to set off another wave of panic.

Without a doubt, the market is more primed for a crash than it has been at any point since 2008, and it definitely will not take much to make this a “September to remember”...

https://www.zerohedge.com/news/2019-...depression-new

If your model produces an answer that makes no sense, the model likely contains a significant flaw or the premise(s) it is built on is wrong. This analysis is interesting from an academic standpoint but should not be taken at face value by the general public.

[liv2ski]

Hey, no worries guys. I have been out of the markets for a long time. I will revisit them once there has been a sizable correction. And I am in no hurry.

[retirwntm]

Really. Do tell. Are you drunk?

I wish. I’m on vacation with kids and in bed by 9 or 10. I am having a bloody now before the beach.

That said I’m not going through all the posts on here for years to start finding all your ZH cut and pastes. And for the record you were the Eeyore that whole time during the crash - and then the next few years you oscillated between real estate crashes, debt bubbles, getting on the recovery bandwagon etc etc.

No one knows what’s going on at this point. We’re in uncharted waters. Everyone is manipulating their rates or fx or both. Who knows what Trump will try to stimulate the economy before the next election.

The US is definitely giving up its economic leadership to China, slowly. Some things seem pretty open to using the past to interpretation but aren’t that straight forward - see curve inversions.

I do think the income inequality and erosion of the middle class is slowly creating a future class war. This time it’s more coasts vs. flyover instead of north vs. south.

It’s fucking creepy going back to where I grew up and there’s no jobs and everyone has a gun and loves trump.

I’m not looking to start shit with you though Benny. It’s never worth the fight and it’s like playing tennis against a wall.


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[4matic]

How is hotter? Smarter?

[Danno]

How is hotter? Smarter?

she talks like her face is filled with Botox.

[dunfree]

The US is definitely giving up its economic leadership to China, slowly. Some things seem pretty open to using the past to interpretation but aren’t that straight forward - see curve inversions.

There's lots of interesting data coming out in the press about showing just how financially important Hong Kong is to China as an interface to the west and what failures some of china's other leadership initiatives have been. Look at the outpouring of creativity in the protests which shows the exact creative culture China needs to surplant the US and the CCP views that as it's enemy. Look at the outflow of manufacturing from China to other nations in Asia. Which is to argue the relative decline of the US is not the same as the rise of China. I admit to believing the two were the same for a long time, I think times have changed.

[4matic]

she talks like her face is filled with Botox.

TR brain is filled with Botox. Such empty thought.