The Market 2022-2023-2024

[dscher]

RALLY INTO RECESSION

The entire bull case now hinges on recession and just-in-time bailout... We have now officially entered the age of Artificial Intelligence. ...

zensecondlife.blogspot.com

 

[GoldGloveschmidt]

People who still think a market bottom and recession are coming are silly. The market bottomed in October. People buying FUD nonsense from places like Zerohedge, convinced the world is about to crash and SP500 will be in the low 3,000's will miss out on all of the gains and cry about "manipulation". A tale as old as time.

 

[dscher]

People who still think a market bottom and recession are coming are silly. The market bottomed in October. People buying FUD nonsense from places like Zerohedge, convinced the world is about to crash and SP500 will be in the low 3,000's will miss out on all of the gains and cry about "manipulation". A tale as old as time.

Do you have any evidence/information to disprove the silliness??

 

[GoldGloveschmidt]

Do you have any evidence/information to disprove the silliness??

Yes, literally all of the evidence is on my side, including the most important data point, PRICE.

 

[dscher]

Yes, literally all of the evidence is on my side, including the most important data point, PRICE.

Well, then you literally would be wrong if that's what you like to go off of... Bull markets are a series of higher highs and higher lows. The SPX hasn't met that criteria. Take out the highs from January of 22 and you'll literally be back on track.

I was moreso curious to your silliness comment about thinking a recession is coming... It would literally be the first time in 25 years while having an (massively) inverted yield curve that we didn't. I guess we'll see if this times different.

 

[GoldGloveschmidt]

Well, then you literally would be wrong if that's what you like to go off of... Bull markets are a series of higher highs and higher lows. The SPX hasn't met that criteria. Take out the highs from January of 22 and you'll literally be back on track.

I was moreso curious to your silliness comment about thinking a recession is coming... It would literally be the first time in 25 years while having an (massively) inverted yield curve that we didn't. I guess we'll see if this times different.

Nothing in the last 25 years can be compared to a once-per-century global pandemic that shut the world down, disrupted the supply chain in every single facet, the fiscal/monetary response, the pulled forward demand in certain areas and delayed demand in others, any of it. A totally unique set of circumstances that needs to be evaluated independently.

The inverted yield curve will naturally slow things down as will higher interest rates.

But we're 1 year into re-opening. Just getting started. Things are finding a new balance and absorbing the ripple effects of all of the above shockwave events. There will continue to be weird data points along the way.

 

[dscher]

Nothing in the last 25 years can be compared to a once-per-century global pandemic that shut the world down, disrupted the supply chain in every single facet, the fiscal/monetary response, the pulled forward demand in certain areas and delayed demand in others, any of it. A totally unique set of circumstances that needs to be evaluated independently.

The inverted yield curve will naturally slow things down as will higher interest rates.

But we're 1 year into re-opening. Just getting started. Things are finding a new balance and absorbing the ripple effects of all of the above shockwave events. There will continue to be weird data points along the way.

These are all fair opinions. That's what I was originally curious about why you thought that..

I guess we'll see what happens. We're still in limbo and the markets have a lot of work to do to get back into a raging secular bull market IMHO.

 

[Devilmaycare]

Nothing in the last 25 years can be compared to a once-per-century global pandemic that shut the world down, disrupted the supply chain in every single facet, the fiscal/monetary response, the pulled forward demand in certain areas and delayed demand in others, any of it. A totally unique set of circumstances that needs to be evaluated independently.

The inverted yield curve will naturally slow things down as will higher interest rates.

But we're 1 year into re-opening. Just getting started. Things are finding a new balance and absorbing the ripple effects of all of the above shockwave events. There will continue to be weird data points along the way.

We're also starting to quantitative tightening instead of the quantitative easing that went on for way too long and was artificially propping up the markets. I think at a minimum that will keep us sideways for awhile if we don't get another leg down like a lot of us are expecting.

 

[Yuma]

The only problem with quantitative tightening, is they always seem to way overshoot how much and how long to tighten.

 

[dscher]

The only problem with quantitative tightening, is they always seem to way overshoot how much and how long to tighten.

While I agree. It's kinda a double edged sword. To break out of control inflation you need to kinda break things.. this is an efficient way to do so. But the consequences of both can be pretty dire. If and when they overdo it, it can also cause runaway deflation. This is now a concern, and rightfully so imo.

 

[elindholm]

People who still think a market bottom and recession are coming are silly.

I wouldn't be so confident one way or another. Despite its ups and downs, the market was flat in April overall. That tells me that the uncertainty is balanced on both sides.

 

[82CardsGrad]

The only problem with quantitative tightening, is they always seem to way overshoot how much and how long to tighten.

And the same can be said for Quantitative Easing... which the Fed completely screwed up by leaving it in place WAY TOO LONG and, IMNHO, became the largest contributor to the very inflation they are now trying to defeat!
#abolishthefed

 

[Bada0Bing]

What are your guys' thoughts on how failing to increase the debt ceiling will affect the stock market?

 

[elindholm]

What are your guys' thoughts on how failing to increase the debt ceiling will affect the stock market?

Good question. I wish I had a better understanding of how precipitously things will fall apart once we cross the magic line into default. We're apparently using "extraordinary measures" to avoid being there already, but I don't know what that means.

The market seems to be assuming that we'll get things worked out sooner or later, but if the game of chicken between Biden and the Republicans continues, it could get ugly.

 

[dscher]

What are your guys' thoughts on how failing to increase the debt ceiling will affect the stock market?

Likely in a negative way if I was to guess....

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[Bada0Bing]

Yeah, I'm not sure what to do here. I'm guessing they'll get it worked out, but I wonder how much carnage will happen before they do.

 

[Folster]

I don't think either party has the balls to default on the debt when it comes down to it. The political fallout would be enormous. A deal will get done just as it always does. The issue will be used as a political football until all hands have been played.

 

[dscher]

Yeah, I'm not sure what to do here. I'm guessing they'll get it worked out, but I wonder how much carnage will happen before they do.

We are at record levels in demand for our CDS (credit default swaps). This can make things a bit tricky if I was to imagine. We'll see, but it won't be pretty if it does happen. 2011 will be a nothing burger compared to this one..

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[dscher]

Risk off.

Beware.

I know I've been the bearish bear over the past couple years, but I also haven't been wrong either...

Just my warning.

Good luck.

 

[Russ Smith]

I don't think either party has the balls to default on the debt when it comes down to it. The political fallout would be enormous. A deal will get done just as it always does. The issue will be used as a political football until all hands have been played.

If I had more confidence I would totally put 10K in a 3x inverse ETF on the Dow waiting for a 10% or more fall as we get close to the cutoff. My assumption is we'll see a drop, and then the 2 sides will finally end it. If you could play it right you can get 30% profit on the way down, and probably more on the way up with a 3x ETF tracking the DOW. But if it goes opposite of what you think, you're going to lose most of your money.

Really tempting though. I'm just not sure I trust them.

 

[Yuma]

What are your guys' thoughts on how failing to increase the debt ceiling will affect the stock market?

I think short term the market would drop to this historic event. Long term, I think later on people will assume the US will pay its bills, albeit late. So the market will go back to normal.

 

[dscher]

If I had more confidence I would totally put 10K in a 3x inverse ETF on the Dow waiting for a 10% or more fall as we get close to the cutoff. My assumption is we'll see a drop, and then the 2 sides will finally end it. If you could play it right you can get 30% profit on the way down, and probably more on the way up with a 3x ETF tracking the DOW. But if it goes opposite of what you think, you're going to lose most of your money.

Really tempting though. I'm just not sure I trust them.

Be careful with leveraged ETFs, especially if you don't use any technical analysis. Just my two cents.

 

[dscher]

I think short term the market would drop to this historic event. Long term, I think later on people will assume the US will pay its bills, albeit late. So the market will go back to normal.

Yes. Fear tactics, until then, can move the markets though. Will we actually default? Absolutely not. Not even a chance. IMO.

The United States has a permanent 'get out of jail free card' in the Fed. The Fed controls this show now and have zero intentions to lose control of the power of our currency by letting it blow up...

 

[elindholm]

If I had more confidence I would totally put 10K in a 3x inverse ETF on the Dow waiting for a 10% or more fall as we get close to the cutoff. My assumption is we'll see a drop, and then the 2 sides will finally end it. If you could play it right you can get 30% profit on the way down, and probably more on the way up with a 3x ETF tracking the DOW. But if it goes opposite of what you think, you're going to lose most of your money.

Really tempting though. I'm just not sure I trust them.

I love the idea of Biden trying to circumvent the entire debt ceiling business by using the Fourteenth Amendment. The whole debt ceiling charade is silly anyway. The debt is a problem, but it doesn't become less of a problem by creating arbitrary "limits" on it that have to be revised every year or two and don't, by themselves, do anything to influence behavior.

 

[Russ Smith]

I love the idea of Biden trying to circumvent the entire debt ceiling business by using the Fourteenth Amendment. The whole debt ceiling charade is silly anyway. The debt is a problem, but it doesn't become less of a problem by creating arbitrary "limits" on it that have to be revised every year or two and don't, by themselves, do anything to influence behavior.

Agreed and it does fit perfectly the definition of public debt.

It's a huge threat if they actually default who knows how bad it will be, but even if people start to panic and pull their 401K's out of the market into cash that would crash the markets.