The Market 2022-2023-2024

[elindholm]

I'm increasingly convinced that a market crash and recession is on the horizon. We've talked about all the fed nonsense and the easy money fueling speculation and huge asset bubble. But the biggest problem is the labor shortage and resulting inefficiencies. Anecdotally, we can't find enough people to answer the phones much less wait months for them to attain their licenses so they can do something besides basic service related issues. I'm seeing this everywhere from fast food to manual labor to white collar jobs. Employers can't innovate fast enough to make up for the labor shortage and meet the higher demand and AI is not ready for widespread implementation. A reset has to take place, something that causes some pain to reign in demand and cool things off.

All of the amateur real estate agents, crypto bros, and other speculators who have been coasting on the easy money asset bubble are going to get washed out and have to return to the workforce. Unfortunately the working class will also feel the pain like they do with any recession.

To me the question is whether the market is driven more by rank-and-file investors or the big-money guys. I think that when push comes to shove, big money will continue to follow the TINA (There Is No Alternative) principle. They want to make money, and they want to have more money than the next guy, so that means staying aggressive.

The NASDAQ is down 16.3% from its peak. I don't have actual numbers in front of me, but eyeballing the graph, that looks like its fourth-biggest downturn ever, after 2000-2002 (when it lost most of its value), the W. Bush recession, and the start of the pandemic. The present conditions don't seem any worse than in those previous situations, so I'd be surprised if it fell a whole lot more -- maybe another 10% max.

The hard part for us rank-and-file guys is guessing where big money will move. There's all this talk about a retreat to value, but today, money is flowing back into growth, and some traditional value stocks (including, ahem, MMM) are getting hammered. (MMM reported earnings on Tuesday, but waited until today to crash, so I don't know what's going on.)

Because I'm older, I'm gradually moving more defensive anyway -- 75% equities, and one could argue that that's too high. I agree that a big rash repositioning isn't called for.

This was, as usual, a messaging blunder by the Democrats. I think that propping up the economy during the pandemic was the right decision, but it was dishonest to wave off the legitimate fears that such actions would be inflationary. The "follow the science" crowd was all too eager to drop their mantra when it was a potential impediment to the policy they wanted to push through. The right thing would have been to say, "We can suffer a bit for the next several years, or we can suffer a whole lot right now, and stretching it out is going to be the better long-term decision." Instead, we were asked to believe that creating trillions of dollars out of thin air would make unicorns poop ice cream and have no adverse consequences.

 

[Russ Smith]

I guess I don't see a recession unless the inflation and the supply chain stuff persists and I'm not sure if that's going to be the case or not.

After looking closer at my GF's company I decided not to buy largely because it seems like their issue is not just the chip shortage but their own issues with dealing with Covid and the impact on their manufacturing. I think that's probably a problem for a bunch of companies and that could be a problem but I don't think that's a cause a recession issue.

I think the labor shortage stuff again is largely companies are expecting people to come back and work at crappy jobs for crappy pay. they don't want to. yes if Crytpo and other stuff keeps crashing they may have to. It sucks if your favorite restaurant or store is short handed absolutely, but it's also a reality check for them if your business can't function without paying crappy wages, your business model is bad.

inflation report today was not good but stocks are actually up now because earnings reports are looking good and yesterdays economic growth numbers were terrific and deep dives into those numbers are suggesting they were even better than reported, it wasn't just pandemic shut down now open of course economy grows, it was MUCH better than that.

My friend who's investing her IRA now with my help is texting me in a panic, WTF happened I'm way down. her fund is down 5.53% for the year and she hasn't figured out the dividend part yet so I am probably going to have to log in for her and look to figure it out but I am telling her NASDAQ, DOW etc they're all down more than 5.5 % so in the long run you will be happy you did this.

 

[Folster]

Strong rally to end the week.

 

[elindholm]

Strong rally to end the week.

Yep, time to replace the upper-floor window screens. For now.

 

[dscher]

Investors are Mispositioned, Again | Steven Van Metre, CFP®

Despite mountains of evidence and ample warning, investors are mispositioned ahead of the Federal Reserve’s accelerated tapering plans. On January 13, the New York Fed announced its new purchase schedule to start on Friday, January 14th that will reduce its total purchases of U.S. Treasury and...

stevenvanmetre.com

 

[Folster]

Do you guys think we'll see and increase of .25 or .50 in March?

 

[dscher]

Do you guys think we'll see and increase of .25 or .50 in March?

Kashkari is already piping into the media a potential "pause" on rate hikes. I honestly don't know how they can at this point. If you raise, you effectively tell the markets that things are tightening even further from the fed liquidity machine and while the economy isn't strong enough on its own....It makes for a bad combo.

 

[Folster]

Kashkari is already piping into the media a potential "pause" on rate hikes. I honestly don't know how they can at this point. If you raise, you effectively tell the markets that things are tightening even further from the fed liquidity machine and while the economy isn't strong enough on its own....It makes for a bad combo.

What does it say when you can't even raise rates from 0 to 0.25%?

 

[dscher]

What does it say when you can't even raise rate from 0 to 0.25%?

Well, you know my take on that already.

 

[dscher]

What does it say when you can't even raise rates from 0 to 0.25%?

Also, it's not so much the amount of increase itself that matters....but the message it sends to the markets. The market, plain and simple, wants the least amount of tightening as possible. But, if they do follow through in March then it will potentially have the same effect that the Bank of Japan rate raise did back in 90/91 to try and stem the speculation. All this debt cannot be serviced and it's just a matter of time...not if, just when. I'd personally rather pop the bubble and get it over for the sake of investors/people everywhere. If we explode higher, again, in nominal asset prices across the board.... I'll be absolutely floored.

 

[Finito]

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When pressed on insider trading going on in Congress this eye patch wearing Beta says “they don’t pay us enough to live”

He makes like 175k a year by the way

God this is so disgusting

 

[dscher]

Talk about a bifurcated market...small caps and arkk getting crushed while the broad market having a solid day. Crazy.

 

[Folster]

Paypal (PYPL) is getting spanked. It might actually make it to value territory.

I might have to hitch a ride on SARK.

 

[BigRedRage]

20-1 incoming for google? Holy Moly!

 

[dscher]

Meta getting smoked in after hours.....everything really. Spotify as well.

I blame Joe Rogan.

 

[Folster]

20-1 incoming for google? Holy Moly!

Rumors of inclusion in the Dow in the future.

 

[Folster]

Meta getting smoked in after hours.....everything really. Spotify as well.

I blame Joe Rogan.

FANG is dead. It's MAGA/GAMA now.

 

[Folster]

I sold TWTR too early at $50 after the election as it got all the way up to $80. Now it's down to $32 in after hours trading. You can be right, but too early. It's typically better than too late. I'm glad I'm not holding it. I'll have to look at these social media stocks. Could be an opportunity or two.

 

[dscher]

FANG is dead. It's MAGA/GAMA now.

Yep...and true. But it's still a trillion dollar mega cap that can move the markets. Regardless, the other big four have so much cash and competitive advantages that they're just gonna gobble up everything in time..

 

[dscher]

I sold TWTR too early at $50 after the election as it got all the way up to $80. Now it's down to $32 in after hours trading. You can be right, but too early. It's typically better than too late. I'm glad I'm not holding it. I'll have to look at these social media stocks. Could be an opportunity or two.

Beware the potential falling knife...

 

[Folster]

Beware the potential falling knife...

Already got impaled by BABA, but I averaged down so not too bad.

 

[Dback Jon]

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When pressed on insider trading going on in Congress this eye patch wearing Beta says “they don’t pay us enough to live”

He makes like 175k a year by the way

God this is so disgusting

Crenshaw is total scum.

 

[Dback Jon]

Meta Tank!

 

[Folster]

Meta Tank!

You just hate to see it.

 

[Folster]

Crenshaw is total scum.

He's just the only one stupid enough to say it, but I think most share the same opinion.