Is the stock market going to tank?

[B:llyB:lly]

Krugman, lol. Government shill extroirdinare.

I expect all computers to explode by yrs end. Put your orders in now.

Heh! If it's only the computers I'll count that as a win.

I was finally able to access my account and not much changed since this morning so I'll put my tin-foil hat back up on the shelf. For now.

[J. Barron DeJong]

Krugman, lol. Government shill extroirdinare.

FWIW, Zandi is more pessimistic



https://twitter.com/markzandi/status...XFQMwy4Rc0jLHA

[4matic]

30y bond yield is down on the day.

[J. Barron DeJong]

This is the rent issue:



https://twitter.com/mattyglesias/sta...XFQMwy4Rc0jLHA

Actual rents have started falling, but ‘owner equivalent rents’ - how much homeowners say they would rent their house for - continue to rise. OER makes up about a quarter of core CPI.

[Toadman]

So if the Fed hammers away at a short term anomaly related to pandemic recovery it will be shooting itself in the foot. No surprise. Fed has been behind the economics for decades.

Fed has always been reactionary. They are always looking at historical data to make their decisions. God help us if the Fed tries to be proactive.

[jono]

Fed has always been reactionary. They are always looking at historical data to make their decisions. God help us if the Fed tries to be proactive.

Coulda been a little proactive about long rates. They worked at those pretty hard during the GR, it's not that they lacked the historical data. Or maybe they wanted a RE bubble that locked half of homeowners into their mortgages?

[Cono Este]

Fed has always been reactionary. They are always looking at historical data to make their decisions. God help us if the Fed tries to be proactive.

I think Greenspan was different. But You sound like you know more than I do about that history though.

[dschane]

Just yesterday, the headlines and money heads were all exclaiming how it's likely the Fed will pull off the miraculous soft landing. 24 hours and one more data point later and the mood has swung in favor of a hard landing, official recession, and high unemployment. A deer in headlights remains my investing theme for 2022.

[Kevo]

In a month or two if the stock market is down it'll be "why the writing was on the wall all year for testing new lows in the stock market".

If the market is up despite rising rates it'll be "international investors are moving billions out of Europe and Asia because the US is the best positioned economy".

Nobody knows WTF is going to happen. There is a scenario where a soft landing happens after supply chains return back to normal. There is a scenario with a mild recession. There is a scenario where Europe doesn't solve their energy crisis and contagion spreads. There is a scenario where continued negative interest rates keep the economy on fire and we chose inflation over unemployment. There is a scenario where China tries to blockade Taiwan. IDFK?

I'm continuing to DCA 2x per month.

[Cono Este]

In a month or two if the stock market is down it'll be "why the writing was on the wall all year for testing new lows in the stock market".

If the market is up despite rising rates it'll be "international investors are moving billions out of Europe and Asia because the US is the best positioned economy".

Nobody knows WTF is going to happen. There is a scenario where a soft landing happens after supply chains return back to normal. There is a scenario with a mild recession. There is a scenario where Europe doesn't solve their energy crisis and contagion spreads. There is a scenario where continued negative interest rates keep the economy on fire and we chose inflation over unemployment. There is a scenario where China tries to blockade Taiwan. IDFK?

I'm continuing to DCA 2x per month.

I too buy x 2 a month, but it’s very small.

I never paid attention to any type of scenario likeabove, not even earnings for the markets I made options on. I pay attention to pricing. What’s the 90 day straddle worth? And that’s probably the range you’ll end up seeing. Billions of dollars are rarely wrong. But as stubborn as I am, and as I different as I try to be, The trend is your friend, and that trend is clearly down for now so why fight it.

[4matic]

Deflation becoming the risk:

Tesla Chief Executive Elon Musk shares her thoughts on inflation, Cathy Wood said. He tweeted Sept. 9: “A major Fed rate hike risks deflation.”

Renowned bond investor Jeff Gundlach, chief executive of money management firm DoubleLine, also agrees with her, Wood said. “Before, he was sure we were in a 1970s-style inflation, but now he has changed his tune.”

Gundlach:

He would buy long-term Treasuries because the deflation risk is much higher today than it has been for the past two years

[Brock Landers]

Deflation?

I like longer term treasuries because I think there’s recession risk/probability out there. The Fed (Powell himself and every governor with a mouthpiece lately) has indicated they aren’t scared to drive rates down and it will hit businesses. They’ve said this multiple times. Yields and income are prettt decent right now and equities (I think anyway) have another shoe to drop. To me, soft landing is a moderate recession.

But deflation? Reminds me of gundlach’s 2018 prediction of 6% 10y UST.

[4matic]

Not a serious deflation but disinflation with negative yoy prints for a while. I read that prices now are at the 2% inflation goal the Fed stated in 2012 had they got what they wanted annualized since then. If they slow the economy too much and wages and prices stall they will be in a worse position.

"In 1996, Fed policymakers privately agreed that their target for inflation was 2 percent, but, at Greenspan’s insistence, they didn’t tell anyone. In 2012, at the urging of then-Chair Ben Bernanke, the Fed formally and publicly announced that they were targeting a 2 percent inflation rate. The Fed’s strategy, approved annually by its policy-making Federal Open Market Committee and tweaked a bit since 2012"

[Brock Landers]

Disinflation will almost certainly happen. Base effects on current prices, it’ll be tough to keep things moving higher next year. But the longer the current “transitory” components to inflation remain, especially negative real wages (check that shit out), the bigger the risk of sustained inflation environment. Wages and rents and their spillover effects.

Also…that 2% inflation stat is kinda funny! Fed has em right where they want em.

[MCS5280]

The fed is completely and utterly incompetent

[m2711c]

Perhaps you should consider starting a rival federal reserve? Competition on the open market should solve the whole problem right?

[Brock Landers]

How are they completely and utterly incompetent?

[Ted Striker]

Perhaps you should consider starting a rival federal reserve? Competition on the open market should solve the whole problem right?

FedCoin

[Toadman]

FedCoin

TGRCoin FTW!

[dschane]

I definitely respect the Fed (given that I can only tentatively grasp their machinations) and while I can't say I'm a big Larry Summers fan, Summers has a fair point here:

"It is highly implausible that inflation will fall to 2 percent without unemployment exceeding 4.5 percent. Yet this is the most pessimistic view among 19 members of the FOMC. Dangerous group think."

[jono]

Because demand is the only factor in inflation. WTFF

[Cono Este]

This is it!

[Kevo]

My prediction - Guessing JPow goes 75 basis points tomorrow and gives guidance of "possible data driven decision for another 50 or 75 bps raise before the end of the year."

Real interest rates will still be at -5.25% after tomorrow.

Stock market will rally on the news.

[Cono Este]

My prediction - Guessing JPow goes 75 basis points tomorrow and gives guidance of "possible data driven decision for another 50 or 75 bps raise before the end of the year."

Real interest rates will still be at -5.25% after tomorrow.

Stock market will rally on the news.

Im sticking to Dow 25k within 6 months. But ultimately it will come down to earnings forecasts.

All I know, is having weathered hurricane after hurricane of sell offs in my day, taking out 2 yrs of gains is nothing. Far, far from the capitulation we usually see on a routine 5-7 yrs in mkt. depends on the amount leverage though. True capitulation may be a lot lower in a prolonged sell off. Dow 21-23k

[jackstraw]

How many of you guys have gone to cash? Is that a wise thing to do if you're a passive investor?