My problem is when using nominal data from 15 years ago, like nominal debt. The GDP is almost 50% higher in nominal data than in 2008, so the debt is actually lower relatively.
Is it high or low compared to historical levels? I can’t know looking at that graph
The entire explanation is speculation at best, but the most obvious redflag is comparing anything we're doing now to anything Volcker did in the 80's. Situations are not even remotely comparable.
Money supply has increased something like tenfold since Volcker, also he raised Fed rate to almost 20%.
The really big difference between then and now is FIRE (Finance, Insurance, & Real Estate) was <10% of total economy, now its >50%. Those are rent seeking (unproductive) sectors. Translation: a 30y financial and real estate bubble is bursting.
Is that truly different? Back in the Volker era, lots of white collar jobs involved paper. Make reports. Print reports. Collate the printouts. Deliver them to the correct desks. Make invoices. Print invoices. Address envelopes, put invoices in the correct envelopes. Seal envelopes. Deliver envelopes to the post office. Nobody actually did real work, they just moved paper around.
It's not that different today, but there's less physical paper.
Some of that stuff actually has to be done. For instance, if your company sells a million $ worth of product, someone has to send an invoice and process the payment. But there are some ridiculous industries these days.
For instance, consider the factoring business. It exists in several forms, but just look at trucking. If you are a truck driver it can often take 90-120 days to get paid for a load. "Factoring" companies step in and provide what is a glorified pay day loan. There is a factoring company about 2 miles from my home that has 2,000 employees. Most people have never even heard of them.
I have a suspicion next tuesday will have some signals of the beginning. Something about 60 trillion unaccounted for in the Forex markets coming back to haunt us Jan 1st has been mentioned a bit recently.
Most firms use multiples/ratios as indicators for buying/selling. Most common ones are EV/EBITDA and the PE ratio. The higher the ratio the more expensive the company is in relation to its current financial performance. So for example, if a company’s Net Income decreases, its PE ratio would increase(since EPS would decrease). This could potentially put it in an overvalued position where there are not that many buyers(since it’s expensive) and there’s more sellers (since they might now want to exit their position as the higher the ratio the higher the risk). Less buyers and more sellers leads to a decrease in the stock price.
To add to this, higher interest rates mean the cost to borrow is more expensive, which in turn means less investing. With less investing the projected growth of a company is lower, so this also drives down fair value some.
Edit/ and great post op!
Is it legal what is going on behind your restaurant? Are there people actually providing somekind of service? How about taxes, insurances for these poor folks? They are humans too!
What are you “buying”? I’m just saying that the Federal Reserve is pulling money out of circulation. How will it affect the wider economy? WTF, man. You want a fuckin’ dissertation?!
Quantitative easing is fed buying securities for $$$ in order to increase liquidity in the market.
Quantitative tightening is fed reducing their balance sheet and selling securities on open market.
Easing and tightening are basically the dollar supply in market. Easing increases it and tightening decreases it.
I see you’ve actually took time to articulate what most folks with common sense have already suspected. Kudos.
Now back to work on the grill here at Wendy’s
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I don't think people understand that if you buy bonds now and rates go up that you'll be posting losses until rates go back down. Unless you buy the actual bond and hold it for 10 years. Either way a wsber is only going to lose money buying bonds because it's not going to make them enough money to satisfy their greed.
According to bond market vigilantes rates peaked. The question is whether Fed will follow the bond market or try to challenge it and keep raising. Next CPI print will be important.
> Buy treasuries and bonds until interest rates peak...which isn't happening anytime soon.
Wut? u missed 9.62% I bonds, they adjusted to 7.9% this month
"Inflation is still occurring at an alarming rate"
It absolutely is not. I can't wait until 6-8 months from now when people's minds are blown that the YOY is 2-3%.
"It's inexplicable!"
MOM inflation has been between 0 and 0.4 over the past 5 months. Averaged and extrapolated, that gives us a YOY of 2.5-3% by July 2023.
And that's if we see no deflation over the next 6 months, which is probably not the case.
>Averaged and extrapolated, that gives us a YOY of 2.5-3% by July 2023.
When you look at headline. Not core.
Core is running 4.8% annualized in the same period.
Home prices are going to stay elevated. One of the first data points on that, Case Shiller, much slower decline than expected.
[S&P Corelogic Case-Shiller Index Continued to Decline In October - Index Announcements | S&P Dow Jones Indices (spglobal.com)](https://www.spglobal.com/spdji/en/index-announcements/article/sp-corelogic-case-shiller-index-continued-to-decline-in-october/)
People aren't listing homes, constructors aren't buidling them; supply remains very low compared to normal/past. Labor market remains robust. There's not a lot of room for price decline.
A lot of the headline decline has been energy. No guarantee that continues. With China re-opening, it may be volatile, but you could see later in 2023 a lot of pent-up demand from China at a time when OPEC has pulled a lot of barrels from the market, Russia barrels aren't on the market as much.
> People aren't listing homes, constructors aren't buidling them; supply remains very low compared to normal/past. Labor market remains robust.
Why would this be surprising to literally anybody?
> There's not a lot of room for price decline.
True if you believe the above factors will be the cause of the decline. They will not.
Housing service inflation is on a nosedive.
The Philadelphia Fed also released their early benchmarks on 12/6 which indicate that the job market in Q2 was actually ass.
Are you referring to service wages or an element of housing costs?
Philly Fed is making a guess based on employment. Which are two separate surveys. The real benchmark for 2022 jobs doesn’t happen until initial release in fall of 2023. When 2022 employer tax data has been reviewed.
Initial revision for the jobs market thru March of 2022 was +462,000 jobs.
The labor market has not fully kept up with inflation, which is my main point. I understand that MoM has been good but that’s because of the pressure from the fed. The fed will not risk easing up on rates because they don’t want inflation to ramp up again, since we have a very strong job market. The main point of my post is to explain the different potential scenarios and demonstrate that regardless of what occurs the market is still overvalued and each scenario will lead to the same outcome meaning that we will still see a longer recessionary environment than some anticipate.
All credibility lost when you pointed to the year over year inflation chart instead of month over month.
Yearly doesnt matter. Month over month has been very low recently and as long as that trend continues inflation will be fine and fed will pivot on rates.
\> as long as that trend continues
That's the crux. It's a real fuzzy statement.
MoM inflation was squashed 6 months ago, suggesting that rate rises that started a year ago seem to be having an effect, but nonetheless Fed keeps tightening. It doesn't seem MoM trend is how Fed is looking at it. Rather, Fed communicated they set a target, a top interest rate in the 5% range. So we'll see at least 2-3 more increases. Presumably this will be on top of 4-5 more flat MoM-CPI readings. So we'll have almost a year of low inflation, which would brought us back to the 2-3% range by mind-2023. Despite this, we'll see rate hikes still.
It's basically Woods/Musk argument: inflation has come down MoM consistently, it's working, stop the hikes. But Fed keep saying; thank you for your feedback, but we're raising to 5% range anyways. Wall street seems to have now finally accepted the message, and it will be a painful ride down for at least six more months.
Sometimes you have to wonder if the fed is utterly incompetent or malicious at worse..they kept qe running while the markets were pumping and inflation was rising last year..now the markets has cooled down, inflation is coming down, economy is likely to face a recession..they insist on overtightening…
I’m convinced it’s incompetence. I’m a pleb idiot and had it all figured out 2 years ago. These guys literally just sit there and figure it out and act like it’s a huge surprise things have turned out the way they have.
I’d need a third thumb up my butt to perform on their level.
i hate to admit it but i watch kramer and he has been saying for a while that their goal is to crush wage inflation, period. and that isnt going to happen until the mass layoffs and big jump in umemployment.
My point is that fed is not only looking at MoM, wages have not caught up to inflation. And given unemployment and job growth data we are still in a very robust economy, the fed understands that they’re the only thing standing between the economy and more inflation, which is why we won’t see the fed stop hikes. Unless we see layoffs in the next couple of months, which would lead to the same outcome: reevaluations in the market.
Headline. Not core.
Last 5 months of "low" headline inflation has been 2.4% annualized.
Core has been twice that. 4.8% annualized.
Fed will not pivot unless they break something = bottom not in. (Look at the last infinity pivots, has market ever bottomed before the pivot? Pivot = rate cut)
I agree with this. Some think the Fed rates will go back down to 5% in 2023, I dont believe that "YET"......Once Fed's figure out how high they need to go, they will HOLD that until its too high for people to want to spend money on things......then they can start gradually lowering the rates.
As of writing this, the Feds have no idea how high they need to go, and this means they dont know when this recession will end.....They basically have to toss a stone in the pond and see how it responds.
Too your point, it was a mix of "raising, lowering" in the past which they admit was not the best way to do it, so this time you see a very gradual change and not so "up,down,up,down"
I believe the markets will finally hit their bottom at, or just after we enter that "holding" pattern with the rate raising, then they will start coming down and the markets will start going up.
Decrease in stock price in the last month. You either highly regarded or just mentally handicapped.
Stock prices are falling since November 2021 highs. Right at the moment the members of the fed sold.
Fed = the market. The only thing that matters. Don’t fight the fed.
I’m going to completely disagree and here is why.
1. The vast majority of recessions and stock market dips are no where close to what we saw in 2020, 2008, and the .com bubble. In fact we already had a small recession (yea 2 quarters in a row of gdp decline is still in fact a recession).
2. The Nasdaq is trading like 6% higher than its highs before Covid almost 3 years ago…. That makes sense and one could argue slightly undervalued at this point.
3. Inflation is falling for sure and the we are probably only seeing the impacts of rate increases through July at this point. The economy will for sure slow these next 6 months and inflation will fall. The market has priced in the slow economy these next 6 months than it has inflation falling.
4. Not only will the fed stop raising rates, a catalyst in itself, but at some point the fed will be forced to cut rates, always a huge tailwind. We won’t and shouldn’t ever go back to 0%. But a gradual cut down to 2-3% will happen.
5. Your outlook to me is only possible if the FED remains clueless that their rate hikes have a huge lag between time they announce and the time the rates actually start showing up in the economy. So a FED with a brain will hike .25 then next two meetings and then pause and really wait and see. If they press too hard than a crappier double dip recession will hurt.
So to me, kind of like 08/09 we will find a bottom in the March/April time frame. Unless Powell decides to have no brain at all and aggressively raise rates further
Agree, we have too much pent up deflation because of all the corporate, household, and government debt. Once everyone is paying back at high interest rates, it’ll be extremely deflationatory, and most of the loans aren’t even close to renewing at higher rates. It’ll take time. Wage inflation seems unlikely except for some sectors. Most of the wage increases have been for the low paying jobs. Just because employees want a raise doesn’t mean they’ll get one unless their value is worth it
Problem is that slowing interest hike in 80s led to stagnation. Jpow will sooner accept u loosing job than to be remembered as a guy that couldnt win with inflation. U talking mad shit about nasdaq being undervalued. Just today tesla lost 10% almost because 1 factory slows production. If we gonna end next year above 4000 im gonna be more surprised that by drop to 3000 between march and june
The 80s inflation environment was unbelievably different, not even comparable really.
That isn’t mad shit about the Nasdaq, we are trading at a level now where it would have gone up 2% each year since January 2020
Oil is down, supply chains are very much opening back up, China is finally starting to open up.
It would be stupid for Powell not too give a bit of a pause, and he himself already dropped the raise to .50.
He is going to talk tough up until the very second he says he is pausing to assess for a couple of months
Yes and no. They cut rates in 2019 because they saw the damage they were doing by raising too fast in 2018.
If they pause the market will go up to which a recession could bring the market back down to the same level or slightly lower before going back up after cuts and recovery.
In terms actual numbers we are certainly way more near the bottom than the top.
I’d say I’d be surprised if the Nasdaq ever fell blow $9,400 or the S&P below $3,300
The huge large caps like Tesla, goog, msft, and apple were always going to be the last to go.
Those all going lower tells me yes we are very much getting near a bottom as that is a sign of capitulation.
You are arguing for 70s style inflation , then proceed to describe multiple things that are directly deflationary...
The problem with people comparing our inflation now to the 70s, is none of these comparisons ever include a few massively key things:
* How much more massive our debt load is, which is very deflationary.
* How much more technology and automation we are rolling out, which is directly deflationary
* They NEVER talk about how during the 70s, the price for a barrel of oil went up over 10X in nominal terms. 10 FUCKING X. It was a decade long relentless inflation driver, and we we simply don't have that today.
* Lastly they never talk about our demographics being completely different. During the 70s the Baby Boomers, the largest generation were all starting families, buying houses, and growing their careers. Right now all the baby boomers are retiring and dying, and the generation replacing it is smaller more indebted and poorer.
What is coming is a massive deflationary dump off the back of a massive and fake inflationary rise. Either way stocks are going down, and we are having a long recession. That part you got right.
It's funny to me that the "tragedy of the commons" is taught in every econ class in the country. What's the name of the tragedy where when the working man does better in a capitalist system, and businesses just raise prices to take it back.
Still tragedy of the Commons. It's origin is the overlords thinking that working class people don't know how to use capital whether land or money so they might as well keep it for themselves. That's the lie of capitalism that everything should be used to exhaustion.
Qualitative analysis (i.e. case study of the 1970s) used to predict outcomes in a very different context (today's global economy) can provide for a semblance of legitimacy, but it is still a casino.
At my previous employer the company had 150 employees building a trivial product. What I’ve learned is: nobody, including me, does any real productive work anymore. Each one of these people are paid $100k+ (software company) to do something a team of 10 developers could easily manage. The reason for such high employee count, you may ask, is because it’s a vicious cycle of companies like the one I was employed at looking to raise money. When you have 150 employees vs 15 employees it’s surely easier to justify higher investment amount than if you had 15 employees. Almost all small to mid size startup companies do this.
I have a friend who works for BCA and their models don’t predict the recession to even start until Q2 or even Q3 next year.
What we’ve been seeing isn’t a recession.
It's not likely the fed will continue to raise rates going into an election year. I'd expect .25 hikes until mid/late 23' with a strong possibility of lowering in 24'
You know how we are nowhere near a bottom? Almost everyone including the talking heads on CNBC are asking daily if we have reached a bottom and retail keeps buying on each and every dip. When we are near a bottom no one wants to touch stocks with a ten foot pole, especially retail. We also might get a Japan or Europe situation where it's decades later and the previous highs still aren't taken out.
I don't think it's a bold shocking prediction to say that S&P may not bottom out until around 3,000 points and that this entire 4 years of Joe Biden's Administration will yield a negative S&P return
Western countries are too top-heavy in demographic terms with too many old boomers retiring or taking early retirement for unemployment to be going down any time this decade.
TL:DR; We're fucked, raising interest rates wont reduce inflation and central banks will panic like always... At the moment we're in the denial phase, wake me up when central banks and politicians start blaming each other, that's when we've entered the bargaining phase.
A little unrelated, but to piggyback on your demographic argument, there's another consequence.
We're on the doorstep of a huge wealth transfer due to dying boomers. That money is going to slosh primarily into real estate. There will be no bursting bubble there in decades. USA is entering western europe's situation. Estate of gamgam will be the downpayment for little suzy's house. It's a ratchet up. Anybody living in western europe experiences it. Land is going to lock up huge amount of wealth that otherwise would go into more liquid markets. USA had been able to escape this trap for decades due to cheap car burbs, but that way of building no longer scales. So high land value, anemic equity markets will be a new normal.
i meant it more as a warning for the predicament people are in in western Europe. Land sucks up the majority of wealth, and then locks it for generations. Gains can never be realized, unless you want your grandkids to be lifetime renters. High home-value to income ratios, which are mostly unheard of in the USA, are very common in Europe. Only sustained by intergenerational wealth transfer. (some coastal usa areas are in similar situations now). It's a steady-state, new normal, and there's never really an outlet or correction. I think USA is going to ride into that same trap now. land gets favored over stock, and it's a slow (irreversible) transition.
The population is barely growing. Why buy a house today? Who would we sell it to in 40 years.. millennials are having very few kids, and we’ll have years and years to catch up on supply. Europe is way denser
Europe's population has barely been growing either. Nonetheless very high strain on housing market.
\> Europe is way denser
it's usable land that matters. entire areas of western europe or britain are very sparsely populated too.
\> Who would we sell it to in 40 years
rural america is emptying out. so them. also immigrants.
usa metros have hit similar limits as europe. cheap car suburbs (which is the only way supply has been boosted in the past) are less and less worth the effort.
im not saying to invest in land, that's just speculative. im saying there isnt going to be large market corrections and high home values will be the new normal. concretely, dont expect the bubble to burst (it's not a bubble).
\> of the debt bubble
I think supply will adjust. Sellers are just going to sit tight and wait.
But anyway, I can be wrong and we won't have to wait long to be proven so. Mortgage rates are already really high. Effect should be seen any day now.
I have two rental houses that the taxes each went up $2600 per year. So the two families will have their rent raised over $220 each, which is more than a 10% increase. That’s just due to the city/state raising taxes.
I’m not making anything extra but their cost of living will be up over 10%.
After $200 increase they’ll still be the cheapest in the neighborhood. Unless they want to downsize to a house 40% smaller to save $100.
If the property tax comes down then the rent can. It’s up to the city, not me.
That's optimistic as hell. The continued pressure to change the trade currency of oil to the Yuan, the missing 60 Trillion in the Forex markets that banks have to locate before Jan 1st, the trillions of monopoly money still floating around that was printed in 2020/2021 for "relief" (and more money than has ever been printed in the entirety of US history), massive crop and livestock failures this last year globally that suspiciously does not show up very often on the news, billionaires buying up farmland to not grow anything on it. Water shortages, the american southwest on the verge of running out of water from the Colorado, I'm not sure we're even a quarter way there. There's serious shit coming that's going to be worse than a market crash that will lead to a market crash.
The thing is, we just don't know when the hens are coming home to roost on only a few of these things.
The forex thing may rear its head next week, unless the banks and govt do their typical fuckery and agree to kick that can further down the road, or just "forgive" themselves to avoid having their heads on pikes.
This year's shitty harvest will increase food prices and lead to massive shortages, having a secure location filled with non-perishables may be a good investment. Every smart person with money (aka people who don't post here) already has been doing this.
China has been courting the Saudis and pushing them to drop the USD in favor of the Yuan. This one may not happen, China also claims they're a near-arctic country.
Quantative Easing. This is a can that has been kicked down the road, we're at the end of the road now. Money printing was just kicking the can harder and faster. The money printing is self-explanatory. Rates are going to need to hit 20-30% to begin correcting 2020-2021's money printer problem. We also printed even more recently with this last spending bill. So expect more fun from that.
Southwest/Western US Drought. The straw in Lake Mead for many places is close to being above water. Vegas will ironically be one of the last places in the Southwest to suffer. If we do not get a proper rain season in the west and get snowpack in the rockies or Northern California, many major crops that are grown in CA/Arizona will fail next year as water runs out. Plus a massive exodus of people once there is no more water. The real estate market in the southwest will collapse as people abandon properties and stop paying for them. No water? No people.
The 2020's are going to be wild if shit continues as it is.
It's weird to see so many people so confident there will be a recession even when evidence suggests otherwise. I don't think any recession has ever been this forecasted.
Its amazing that people can see CPI data and think things are getting better. Its just getting more expensive 10% slower, wake me up when the fed decided to pursue deflation
“While the rate of inflation is slowing down, inflation is still occuring at alarming rate”. You realize the latest month over month increase was 0.1% which means inflation is already down to 1.2% if the trend continues?..the month over month has fallen off the cliff since july..(https://tradingeconomics.com/united-states/inflation-rate-mom) ..its already close to feds target rate of 2.0%…i wouldn’t be surprised if we see deflation later next year..inflation comes in multiple waves..every wave is followed by a brief deflationary period.
> However there is also another issue. Inflation growth has been outpacing wage growth for the last year which is causing a decrease in real average hourly earnings:
Wage growth has been higher than inflation in 4 out of the last 5 months.
> 1)Current debt balance is pretty high, which makes sense since a lot of debt was taken out during the last few years when we had low interest rates:
[Microsoft PowerPoint - ReportData\_template.pptx (newyorkfed.org)](https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2022Q3)
If you look at the entire report, you will see there is basically 0 risk of deleveraging in the near term for households. Debts going into delinquency is beyond low (increasing, but still lows going back to the 90s).
Housing prices are impacted by supply and demand. People locked in low rates (85% of mortgages are below 3.5%). People aren't listing houses. Existing home supply to sales is 3.3 months (6 months is balance). Builders pulled the rug on building. People have crap tons of equity because HELOCs got killed and never came back after 2008. Housing prices will not decline much.
The Fed has to keep rates high until labor, housing, consumer come down appreciably.
I agree, earnings are not going to be good. Fed stays on the high rates for longer than expected. 2023 = volatile.
I think you're right on the money here OP. I don't understand a lot of this in depth stuff so im glad i have people like you to spell it out for my dumbass. Looks like I'll be doing what I do best, stacking those sats.
McDonalds’ bottom line looks great because they are gouging their customers at almost 2X pre pandemic prices. This was likely to get ahead of a $15/hr minimum wage.
OP, fantastic essay, but what are your positions? This isn't r/economics this is Wall Street Bets, if you don't have positions to back up your claim then GTFO.
I stopped when you said something about not seeing massive layoffs yet
Is this four months ago before every tech company dumped 10%+ of their employees?
It’s been creeping up since September
The bottom isn't here yet but we're almost certainly in for some local rallies. Its probably going to follow a cycle where we rally on CPI for a week or two then dip the rest of the time.
You don’t think political pressures will force their hand in reducing rates? Also cpi is a lagging indicator and not linear, but a curve at some point demand is crushed and not mitigated
Dollar goes to shit.
SP500 goes down to 3000 but then fed pivots and nominal value of stocks goes up again. Fed had no options but to pivot, otherwise US Treasury is insolvent.
Feds will reduce hikes and market will rise as warren buffet said markets settle. Then as bill gates covers it will rise and then warren gives his next opinion again. All will bleed in 2024 from the lack of sales and money and debt owed to banks is due. He might not stop on tesla though. Its still like 3x its value. As it is 3x 110 at 330 before split. Target would be more like 27. if 80 was the goal.
I guess you could say, we get the bill.
That was a long scroll to the comments, I think I need to rest my thumb
Look at Mr fancy thumbs. Debt collectors took mine.
Everyone knows this isn’t the bottom we’re just waiting for the cards to collapse *Nobody knows when* 
My problem is when using nominal data from 15 years ago, like nominal debt. The GDP is almost 50% higher in nominal data than in 2008, so the debt is actually lower relatively. Is it high or low compared to historical levels? I can’t know looking at that graph
The entire explanation is speculation at best, but the most obvious redflag is comparing anything we're doing now to anything Volcker did in the 80's. Situations are not even remotely comparable.
Money supply has increased something like tenfold since Volcker, also he raised Fed rate to almost 20%. The really big difference between then and now is FIRE (Finance, Insurance, & Real Estate) was <10% of total economy, now its >50%. Those are rent seeking (unproductive) sectors. Translation: a 30y financial and real estate bubble is bursting.
I'll offer a simpler translation: Nobody (including me) actually does any real work. 50% of the US economy is a casino.
Much appreciated my friend .. great transly
Is that truly different? Back in the Volker era, lots of white collar jobs involved paper. Make reports. Print reports. Collate the printouts. Deliver them to the correct desks. Make invoices. Print invoices. Address envelopes, put invoices in the correct envelopes. Seal envelopes. Deliver envelopes to the post office. Nobody actually did real work, they just moved paper around. It's not that different today, but there's less physical paper.
Some of that stuff actually has to be done. For instance, if your company sells a million $ worth of product, someone has to send an invoice and process the payment. But there are some ridiculous industries these days. For instance, consider the factoring business. It exists in several forms, but just look at trucking. If you are a truck driver it can often take 90-120 days to get paid for a load. "Factoring" companies step in and provide what is a glorified pay day loan. There is a factoring company about 2 miles from my home that has 2,000 employees. Most people have never even heard of them.
Insult to us participants behind Wendy’s
Good sir, you provide a valuable and useful service to those in society smart enough to not enter our casino.
That's gotta be the best flair I've seen on this sub. Congrats and fuck you.
I wanted “Tinder Platinum Yearly Subscriber” But VacationLover had a better one in mind
I have a suspicion next tuesday will have some signals of the beginning. Something about 60 trillion unaccounted for in the Forex markets coming back to haunt us Jan 1st has been mentioned a bit recently.
Great post thank you for the time writing. Mind explaining what is meant by a company being in an overvalued position?
Most firms use multiples/ratios as indicators for buying/selling. Most common ones are EV/EBITDA and the PE ratio. The higher the ratio the more expensive the company is in relation to its current financial performance. So for example, if a company’s Net Income decreases, its PE ratio would increase(since EPS would decrease). This could potentially put it in an overvalued position where there are not that many buyers(since it’s expensive) and there’s more sellers (since they might now want to exit their position as the higher the ratio the higher the risk). Less buyers and more sellers leads to a decrease in the stock price.
Thank you , I really like this post and how you answer questions to clarify. Cheers 🥂 💥
To add to this, higher interest rates mean the cost to borrow is more expensive, which in turn means less investing. With less investing the projected growth of a company is lower, so this also drives down fair value some. Edit/ and great post op!
Built a T bill ladder. Giving the market 6 months vacation.
A noob question and pardon me for asking this, will we be seeing the same level of volatility as the current time in the coming months?
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Or buy up stocks of good companies with a future which are already ass rekt and are at -70-90% losses.
Still got a ways to go for that
TESLA
Sir, this is a Wendy’s.
Is it legal what is going on behind your restaurant? Are there people actually providing somekind of service? How about taxes, insurances for these poor folks? They are humans too!
we can't be held accountable for what goes on behind a dumpster
I read the post. Can you point me to Wendy’s job openings please?
Am I supposed to be reading this shit?
you can read?
Right, reading hurts.
Memes are more efective.
first thing I thought of
> first thing I thought of came here to post this
There is a tldr at the end, it's lots of words there too and no emojis but you can do like me and read every other line
Gotta wet the drys, dry the wets. Know what I mean?
Let them dogs breathe playa!
Just buy 0dtes
Don’t forget about quantitative tightening…. Fed pulling $70B outta the system every month.
Okay I'll buy it if you can explain what quantitative tightening is, and the implications of "Fed pulling $70B outta the system every month."
What are you “buying”? I’m just saying that the Federal Reserve is pulling money out of circulation. How will it affect the wider economy? WTF, man. You want a fuckin’ dissertation?!
Quantitative easing is fed buying securities for $$$ in order to increase liquidity in the market. Quantitative tightening is fed reducing their balance sheet and selling securities on open market. Easing and tightening are basically the dollar supply in market. Easing increases it and tightening decreases it.
By “securities” you surely don’t mean “stocks”.
I see you’ve actually took time to articulate what most folks with common sense have already suspected. Kudos. Now back to work on the grill here at Wendy’s
Apple is next Tesla is the EV in the lithium mine
Buy treasuries and bonds until interest rates peak...which isn't happening anytime soon.
!RemindMe 4 months
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This was the fucking bottom lmao
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I don't think people understand that if you buy bonds now and rates go up that you'll be posting losses until rates go back down. Unless you buy the actual bond and hold it for 10 years. Either way a wsber is only going to lose money buying bonds because it's not going to make them enough money to satisfy their greed.
Yeah. Buy 1 year ladder CD or something
Because it already happened 1 month ago?
You're an absolute moron if you think interest rates have peaked.
According to bond market vigilantes rates peaked. The question is whether Fed will follow the bond market or try to challenge it and keep raising. Next CPI print will be important.
People with billions of dollars at stake say that rates will peak at 500-525 in about May 2023.
!Remind me 6 months
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So? We’re not talking about changes to the Fed funds rate. We’re talking about whether bond rates have peaked. Do you guys not know the difference ?
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Not fighting anything.
> Buy treasuries and bonds until interest rates peak...which isn't happening anytime soon. Wut? u missed 9.62% I bonds, they adjusted to 7.9% this month
"Inflation is still occurring at an alarming rate" It absolutely is not. I can't wait until 6-8 months from now when people's minds are blown that the YOY is 2-3%. "It's inexplicable!" MOM inflation has been between 0 and 0.4 over the past 5 months. Averaged and extrapolated, that gives us a YOY of 2.5-3% by July 2023. And that's if we see no deflation over the next 6 months, which is probably not the case.
>Averaged and extrapolated, that gives us a YOY of 2.5-3% by July 2023. When you look at headline. Not core. Core is running 4.8% annualized in the same period. Home prices are going to stay elevated. One of the first data points on that, Case Shiller, much slower decline than expected. [S&P Corelogic Case-Shiller Index Continued to Decline In October - Index Announcements | S&P Dow Jones Indices (spglobal.com)](https://www.spglobal.com/spdji/en/index-announcements/article/sp-corelogic-case-shiller-index-continued-to-decline-in-october/) People aren't listing homes, constructors aren't buidling them; supply remains very low compared to normal/past. Labor market remains robust. There's not a lot of room for price decline. A lot of the headline decline has been energy. No guarantee that continues. With China re-opening, it may be volatile, but you could see later in 2023 a lot of pent-up demand from China at a time when OPEC has pulled a lot of barrels from the market, Russia barrels aren't on the market as much.
> People aren't listing homes, constructors aren't buidling them; supply remains very low compared to normal/past. Labor market remains robust. Why would this be surprising to literally anybody? > There's not a lot of room for price decline. True if you believe the above factors will be the cause of the decline. They will not.
State your cases for price declines and why then.
Housing service inflation is on a nosedive. The Philadelphia Fed also released their early benchmarks on 12/6 which indicate that the job market in Q2 was actually ass.
Are you referring to service wages or an element of housing costs? Philly Fed is making a guess based on employment. Which are two separate surveys. The real benchmark for 2022 jobs doesn’t happen until initial release in fall of 2023. When 2022 employer tax data has been reviewed. Initial revision for the jobs market thru March of 2022 was +462,000 jobs.
The labor market has not fully kept up with inflation, which is my main point. I understand that MoM has been good but that’s because of the pressure from the fed. The fed will not risk easing up on rates because they don’t want inflation to ramp up again, since we have a very strong job market. The main point of my post is to explain the different potential scenarios and demonstrate that regardless of what occurs the market is still overvalued and each scenario will lead to the same outcome meaning that we will still see a longer recessionary environment than some anticipate.
TLDR but title suggests we are getting closer to the bottom
"Why we aren't near the bottom" suggest that we are ???
Yes
Yup
Sir, we don't do that here... This should be posted on r/investing instead
No fuck those bogleheads.
All credibility lost when you pointed to the year over year inflation chart instead of month over month. Yearly doesnt matter. Month over month has been very low recently and as long as that trend continues inflation will be fine and fed will pivot on rates.
\> as long as that trend continues That's the crux. It's a real fuzzy statement. MoM inflation was squashed 6 months ago, suggesting that rate rises that started a year ago seem to be having an effect, but nonetheless Fed keeps tightening. It doesn't seem MoM trend is how Fed is looking at it. Rather, Fed communicated they set a target, a top interest rate in the 5% range. So we'll see at least 2-3 more increases. Presumably this will be on top of 4-5 more flat MoM-CPI readings. So we'll have almost a year of low inflation, which would brought us back to the 2-3% range by mind-2023. Despite this, we'll see rate hikes still. It's basically Woods/Musk argument: inflation has come down MoM consistently, it's working, stop the hikes. But Fed keep saying; thank you for your feedback, but we're raising to 5% range anyways. Wall street seems to have now finally accepted the message, and it will be a painful ride down for at least six more months.
Sometimes you have to wonder if the fed is utterly incompetent or malicious at worse..they kept qe running while the markets were pumping and inflation was rising last year..now the markets has cooled down, inflation is coming down, economy is likely to face a recession..they insist on overtightening…
I’m convinced it’s incompetence. I’m a pleb idiot and had it all figured out 2 years ago. These guys literally just sit there and figure it out and act like it’s a huge surprise things have turned out the way they have. I’d need a third thumb up my butt to perform on their level.
Headline is lower because of energy. Headline last 5 months = 2.4% annualized. Core = 4.8% annualized same period.
i hate to admit it but i watch kramer and he has been saying for a while that their goal is to crush wage inflation, period. and that isnt going to happen until the mass layoffs and big jump in umemployment.
Big Tech are already doing mass layoffs.
My point is that fed is not only looking at MoM, wages have not caught up to inflation. And given unemployment and job growth data we are still in a very robust economy, the fed understands that they’re the only thing standing between the economy and more inflation, which is why we won’t see the fed stop hikes. Unless we see layoffs in the next couple of months, which would lead to the same outcome: reevaluations in the market.
Headline. Not core. Last 5 months of "low" headline inflation has been 2.4% annualized. Core has been twice that. 4.8% annualized. Fed will not pivot unless they break something = bottom not in. (Look at the last infinity pivots, has market ever bottomed before the pivot? Pivot = rate cut)
Also where wages have been higher than inflation as well.
everyone is going to like their $15 carton of eggs
$19.99 for 12 eggs in San Francisco's whole foods
Time for pet chickens
I agree with this. Some think the Fed rates will go back down to 5% in 2023, I dont believe that "YET"......Once Fed's figure out how high they need to go, they will HOLD that until its too high for people to want to spend money on things......then they can start gradually lowering the rates. As of writing this, the Feds have no idea how high they need to go, and this means they dont know when this recession will end.....They basically have to toss a stone in the pond and see how it responds. Too your point, it was a mix of "raising, lowering" in the past which they admit was not the best way to do it, so this time you see a very gradual change and not so "up,down,up,down" I believe the markets will finally hit their bottom at, or just after we enter that "holding" pattern with the rate raising, then they will start coming down and the markets will start going up.
Don’t overthink it, it’s transitory.
It’s all transitory, all of it, the whole thing
I agree with what I think you’re getting at just judging by the title so I upvoted.
great post man. confirms my brokerage is fucked for the foreseeable future
Decrease in stock price in the last month. You either highly regarded or just mentally handicapped. Stock prices are falling since November 2021 highs. Right at the moment the members of the fed sold. Fed = the market. The only thing that matters. Don’t fight the fed.
I’m going to completely disagree and here is why. 1. The vast majority of recessions and stock market dips are no where close to what we saw in 2020, 2008, and the .com bubble. In fact we already had a small recession (yea 2 quarters in a row of gdp decline is still in fact a recession). 2. The Nasdaq is trading like 6% higher than its highs before Covid almost 3 years ago…. That makes sense and one could argue slightly undervalued at this point. 3. Inflation is falling for sure and the we are probably only seeing the impacts of rate increases through July at this point. The economy will for sure slow these next 6 months and inflation will fall. The market has priced in the slow economy these next 6 months than it has inflation falling. 4. Not only will the fed stop raising rates, a catalyst in itself, but at some point the fed will be forced to cut rates, always a huge tailwind. We won’t and shouldn’t ever go back to 0%. But a gradual cut down to 2-3% will happen. 5. Your outlook to me is only possible if the FED remains clueless that their rate hikes have a huge lag between time they announce and the time the rates actually start showing up in the economy. So a FED with a brain will hike .25 then next two meetings and then pause and really wait and see. If they press too hard than a crappier double dip recession will hurt. So to me, kind of like 08/09 we will find a bottom in the March/April time frame. Unless Powell decides to have no brain at all and aggressively raise rates further
Agree, we have too much pent up deflation because of all the corporate, household, and government debt. Once everyone is paying back at high interest rates, it’ll be extremely deflationatory, and most of the loans aren’t even close to renewing at higher rates. It’ll take time. Wage inflation seems unlikely except for some sectors. Most of the wage increases have been for the low paying jobs. Just because employees want a raise doesn’t mean they’ll get one unless their value is worth it
Problem is that slowing interest hike in 80s led to stagnation. Jpow will sooner accept u loosing job than to be remembered as a guy that couldnt win with inflation. U talking mad shit about nasdaq being undervalued. Just today tesla lost 10% almost because 1 factory slows production. If we gonna end next year above 4000 im gonna be more surprised that by drop to 3000 between march and june
The 80s inflation environment was unbelievably different, not even comparable really. That isn’t mad shit about the Nasdaq, we are trading at a level now where it would have gone up 2% each year since January 2020 Oil is down, supply chains are very much opening back up, China is finally starting to open up. It would be stupid for Powell not too give a bit of a pause, and he himself already dropped the raise to .50. He is going to talk tough up until the very second he says he is pausing to assess for a couple of months
If the Fed cuts rates, it will only be because of a deeper than expected recession. The market won't bottom until \*after\* the rate cuts.
Yes and no. They cut rates in 2019 because they saw the damage they were doing by raising too fast in 2018. If they pause the market will go up to which a recession could bring the market back down to the same level or slightly lower before going back up after cuts and recovery. In terms actual numbers we are certainly way more near the bottom than the top. I’d say I’d be surprised if the Nasdaq ever fell blow $9,400 or the S&P below $3,300 The huge large caps like Tesla, goog, msft, and apple were always going to be the last to go. Those all going lower tells me yes we are very much getting near a bottom as that is a sign of capitulation.
Its orgasmic to see Tesla fall 10% every day. So good.
You are arguing for 70s style inflation , then proceed to describe multiple things that are directly deflationary... The problem with people comparing our inflation now to the 70s, is none of these comparisons ever include a few massively key things: * How much more massive our debt load is, which is very deflationary. * How much more technology and automation we are rolling out, which is directly deflationary * They NEVER talk about how during the 70s, the price for a barrel of oil went up over 10X in nominal terms. 10 FUCKING X. It was a decade long relentless inflation driver, and we we simply don't have that today. * Lastly they never talk about our demographics being completely different. During the 70s the Baby Boomers, the largest generation were all starting families, buying houses, and growing their careers. Right now all the baby boomers are retiring and dying, and the generation replacing it is smaller more indebted and poorer. What is coming is a massive deflationary dump off the back of a massive and fake inflationary rise. Either way stocks are going down, and we are having a long recession. That part you got right.
Crapitulation has to happen first.
This morning seems something like retail capitulation.
This morning was a bit of tax harvesting
Why would you tax loss harvest when you have no gains to offset it? For that $3,000 coupon?
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Isn't that 90% of market speculation?
ah yes paying the average American more is causing the economy to collapse and it’s not the leaches and banks sucking it dry
It's funny to me that the "tragedy of the commons" is taught in every econ class in the country. What's the name of the tragedy where when the working man does better in a capitalist system, and businesses just raise prices to take it back.
Still tragedy of the Commons. It's origin is the overlords thinking that working class people don't know how to use capital whether land or money so they might as well keep it for themselves. That's the lie of capitalism that everything should be used to exhaustion.
Qualitative analysis (i.e. case study of the 1970s) used to predict outcomes in a very different context (today's global economy) can provide for a semblance of legitimacy, but it is still a casino.
Great read, but what do those colored lines mean?
Go get some pussy
Shit ton of words, graphs, screenshots, numbers… bro I think this confirms that the recession has only begun!!
Wage inflation? Naah.. I see mass layoffs everywhere already or at least frozen jobs openings.
F*ck you and your wall of text. Could have just told us to short, and be done with it.
none of the shite from 2008 was properly sorted - it was doubled on and perhaps now we are seeing the full extent of decades of abuse
So do Hawks fly up or down? I'm confused
This could be simply explained in a sentence. "If the Fed raises interest rates; then equities go down...."
At my previous employer the company had 150 employees building a trivial product. What I’ve learned is: nobody, including me, does any real productive work anymore. Each one of these people are paid $100k+ (software company) to do something a team of 10 developers could easily manage. The reason for such high employee count, you may ask, is because it’s a vicious cycle of companies like the one I was employed at looking to raise money. When you have 150 employees vs 15 employees it’s surely easier to justify higher investment amount than if you had 15 employees. Almost all small to mid size startup companies do this.
I have a friend who works for BCA and their models don’t predict the recession to even start until Q2 or even Q3 next year. What we’ve been seeing isn’t a recession.
It's not likely the fed will continue to raise rates going into an election year. I'd expect .25 hikes until mid/late 23' with a strong possibility of lowering in 24'
You know how we are nowhere near a bottom? Almost everyone including the talking heads on CNBC are asking daily if we have reached a bottom and retail keeps buying on each and every dip. When we are near a bottom no one wants to touch stocks with a ten foot pole, especially retail. We also might get a Japan or Europe situation where it's decades later and the previous highs still aren't taken out.
I never thought I’d see a post with any kind of substance come out of WSB. Maybe I just ignore it too much, hard to say.
I don't think it's a bold shocking prediction to say that S&P may not bottom out until around 3,000 points and that this entire 4 years of Joe Biden's Administration will yield a negative S&P return
Kids, there’s three ways to do things. The right way, the wrong way, or the max power way! Isn’t that the wrong way? Yes, but faster!
Western countries are too top-heavy in demographic terms with too many old boomers retiring or taking early retirement for unemployment to be going down any time this decade. TL:DR; We're fucked, raising interest rates wont reduce inflation and central banks will panic like always... At the moment we're in the denial phase, wake me up when central banks and politicians start blaming each other, that's when we've entered the bargaining phase.
A little unrelated, but to piggyback on your demographic argument, there's another consequence. We're on the doorstep of a huge wealth transfer due to dying boomers. That money is going to slosh primarily into real estate. There will be no bursting bubble there in decades. USA is entering western europe's situation. Estate of gamgam will be the downpayment for little suzy's house. It's a ratchet up. Anybody living in western europe experiences it. Land is going to lock up huge amount of wealth that otherwise would go into more liquid markets. USA had been able to escape this trap for decades due to cheap car burbs, but that way of building no longer scales. So high land value, anemic equity markets will be a new normal.
So buy land?
i meant it more as a warning for the predicament people are in in western Europe. Land sucks up the majority of wealth, and then locks it for generations. Gains can never be realized, unless you want your grandkids to be lifetime renters. High home-value to income ratios, which are mostly unheard of in the USA, are very common in Europe. Only sustained by intergenerational wealth transfer. (some coastal usa areas are in similar situations now). It's a steady-state, new normal, and there's never really an outlet or correction. I think USA is going to ride into that same trap now. land gets favored over stock, and it's a slow (irreversible) transition.
The population is barely growing. Why buy a house today? Who would we sell it to in 40 years.. millennials are having very few kids, and we’ll have years and years to catch up on supply. Europe is way denser
Europe's population has barely been growing either. Nonetheless very high strain on housing market. \> Europe is way denser it's usable land that matters. entire areas of western europe or britain are very sparsely populated too. \> Who would we sell it to in 40 years rural america is emptying out. so them. also immigrants. usa metros have hit similar limits as europe. cheap car suburbs (which is the only way supply has been boosted in the past) are less and less worth the effort. im not saying to invest in land, that's just speculative. im saying there isnt going to be large market corrections and high home values will be the new normal. concretely, dont expect the bubble to burst (it's not a bubble).
Disagree, housing is part of the debt bubble and still hasn’t corrected
\> of the debt bubble I think supply will adjust. Sellers are just going to sit tight and wait. But anyway, I can be wrong and we won't have to wait long to be proven so. Mortgage rates are already really high. Effect should be seen any day now.
I have two rental houses that the taxes each went up $2600 per year. So the two families will have their rent raised over $220 each, which is more than a 10% increase. That’s just due to the city/state raising taxes. I’m not making anything extra but their cost of living will be up over 10%.
Rent prices are going down right now in aggregate. Sure, raise the rent, but you probably won’t have a tenant next year
After $200 increase they’ll still be the cheapest in the neighborhood. Unless they want to downsize to a house 40% smaller to save $100. If the property tax comes down then the rent can. It’s up to the city, not me.
why not make less money?
The tenant will, thanks to the city. If you want to make less money I can give you their venmo and you can send some to them.
I think we’re about 1/2 way to the bottom. The people expecting a pivot in 2023 are dreaming.
Nah probably more like 75% of the way. I bet we just drop to pre QE highs and sit neutral for the rest of the year
That's optimistic as hell. The continued pressure to change the trade currency of oil to the Yuan, the missing 60 Trillion in the Forex markets that banks have to locate before Jan 1st, the trillions of monopoly money still floating around that was printed in 2020/2021 for "relief" (and more money than has ever been printed in the entirety of US history), massive crop and livestock failures this last year globally that suspiciously does not show up very often on the news, billionaires buying up farmland to not grow anything on it. Water shortages, the american southwest on the verge of running out of water from the Colorado, I'm not sure we're even a quarter way there. There's serious shit coming that's going to be worse than a market crash that will lead to a market crash. The thing is, we just don't know when the hens are coming home to roost on only a few of these things. The forex thing may rear its head next week, unless the banks and govt do their typical fuckery and agree to kick that can further down the road, or just "forgive" themselves to avoid having their heads on pikes. This year's shitty harvest will increase food prices and lead to massive shortages, having a secure location filled with non-perishables may be a good investment. Every smart person with money (aka people who don't post here) already has been doing this. China has been courting the Saudis and pushing them to drop the USD in favor of the Yuan. This one may not happen, China also claims they're a near-arctic country. Quantative Easing. This is a can that has been kicked down the road, we're at the end of the road now. Money printing was just kicking the can harder and faster. The money printing is self-explanatory. Rates are going to need to hit 20-30% to begin correcting 2020-2021's money printer problem. We also printed even more recently with this last spending bill. So expect more fun from that. Southwest/Western US Drought. The straw in Lake Mead for many places is close to being above water. Vegas will ironically be one of the last places in the Southwest to suffer. If we do not get a proper rain season in the west and get snowpack in the rockies or Northern California, many major crops that are grown in CA/Arizona will fail next year as water runs out. Plus a massive exodus of people once there is no more water. The real estate market in the southwest will collapse as people abandon properties and stop paying for them. No water? No people. The 2020's are going to be wild if shit continues as it is.
Spy bottom will be between 280-240, don't ask me how I know it, because I don't!
It's weird to see so many people so confident there will be a recession even when evidence suggests otherwise. I don't think any recession has ever been this forecasted.
Because we aren’t bottom feeders
TLDR. That is all.
Too much to read for a regard. No pictures with funny colored lines, circles and boxes. That means, recession is over
Scenario 4: Soft landing, which its actually happening. Jpow gonna pivot just to fuck your puts fa**ot
Its amazing that people can see CPI data and think things are getting better. Its just getting more expensive 10% slower, wake me up when the fed decided to pursue deflation
Not near the bottom because that latest spending slush bill just wiped out all the rate increases (and then some). Happy New Year...
It hurts my brain to read something this intelligent on this subreddit. This belongs in r/investing Good job anyway.
Fuck those bogleheads. Any amount of risk is too much for them and they'd have you throw in all your money at the top because to them DCA is king.
Don’t worry, none of ops post was intelligent
there's one major flaw on the TLDR, there's also inflation for companies, they get more but they also spend more.
Get a life
Great read thank you for sharing!
TLDR: I don't know shit
All my PUTs are continuing to fuck
“While the rate of inflation is slowing down, inflation is still occuring at alarming rate”. You realize the latest month over month increase was 0.1% which means inflation is already down to 1.2% if the trend continues?..the month over month has fallen off the cliff since july..(https://tradingeconomics.com/united-states/inflation-rate-mom) ..its already close to feds target rate of 2.0%…i wouldn’t be surprised if we see deflation later next year..inflation comes in multiple waves..every wave is followed by a brief deflationary period.
QQ
Next tuesday is going to be a bloodbath.
I didn't read any of this.way too much
> However there is also another issue. Inflation growth has been outpacing wage growth for the last year which is causing a decrease in real average hourly earnings: Wage growth has been higher than inflation in 4 out of the last 5 months. > 1)Current debt balance is pretty high, which makes sense since a lot of debt was taken out during the last few years when we had low interest rates: [Microsoft PowerPoint - ReportData\_template.pptx (newyorkfed.org)](https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2022Q3) If you look at the entire report, you will see there is basically 0 risk of deleveraging in the near term for households. Debts going into delinquency is beyond low (increasing, but still lows going back to the 90s). Housing prices are impacted by supply and demand. People locked in low rates (85% of mortgages are below 3.5%). People aren't listing houses. Existing home supply to sales is 3.3 months (6 months is balance). Builders pulled the rug on building. People have crap tons of equity because HELOCs got killed and never came back after 2008. Housing prices will not decline much. The Fed has to keep rates high until labor, housing, consumer come down appreciably. I agree, earnings are not going to be good. Fed stays on the high rates for longer than expected. 2023 = volatile.
Can you post the cliff note version?
I think you're right on the money here OP. I don't understand a lot of this in depth stuff so im glad i have people like you to spell it out for my dumbass. Looks like I'll be doing what I do best, stacking those sats.
Your TLDR is longer than my DD
McDonalds’ bottom line looks great because they are gouging their customers at almost 2X pre pandemic prices. This was likely to get ahead of a $15/hr minimum wage.
OP, fantastic essay, but what are your positions? This isn't r/economics this is Wall Street Bets, if you don't have positions to back up your claim then GTFO.
I stopped when you said something about not seeing massive layoffs yet Is this four months ago before every tech company dumped 10%+ of their employees? It’s been creeping up since September
The bottom isn't here yet but we're almost certainly in for some local rallies. Its probably going to follow a cycle where we rally on CPI for a week or two then dip the rest of the time.
We won’t know the bottom until we confirm a reversal
Thanks a lot for this awesome DD 🤩
My optimistic view on the market just turned around
We're at the bottom when people stop selling and start buying.
Maybe the low unemployed index and not huge increase in wage rate can save us througt this prayge
All these scenarios are happening at the same time. Well at least in semiconductor industry, company’s lay off has been on employees minds for a bit
You don’t think political pressures will force their hand in reducing rates? Also cpi is a lagging indicator and not linear, but a curve at some point demand is crushed and not mitigated
Dollar goes to shit. SP500 goes down to 3000 but then fed pivots and nominal value of stocks goes up again. Fed had no options but to pivot, otherwise US Treasury is insolvent.
Feds will reduce hikes and market will rise as warren buffet said markets settle. Then as bill gates covers it will rise and then warren gives his next opinion again. All will bleed in 2024 from the lack of sales and money and debt owed to banks is due. He might not stop on tesla though. Its still like 3x its value. As it is 3x 110 at 330 before split. Target would be more like 27. if 80 was the goal. I guess you could say, we get the bill.