|
|
Post by flearider on Jun 17, 2022 19:07:22 GMT
From today's The Age newspaper: [[The crisis in the energy market has strengthened the case for Australia to reduce its reliance on gas and coal in favour of renewables, the nation’s peak energy regulator has declared in a warning about the exposure to soaring global prices for fossil fuels. Energy Security Board chair Anna Collyer said the pressure on the electricity grid highlighted the need for reform to move “beyond the crisis” by continuing the long-term shift to solar, wind, hydro and other renewable power.]] I think the Chair is living on another planet, not in one of the most fossil fuel rich places on earth. even if you covered the outback in solar you would still not have enough .. simples .. |
|
|
|
Post by Sigurdur on Jun 17, 2022 21:40:08 GMT
|
|
|
|
Post by code on Jun 18, 2022 19:08:15 GMT
|
|
|
|
Post by missouriboy on Jun 18, 2022 19:11:24 GMT
Bullshit always rides a whitewashed horse. |
|
|
|
Post by walnut on Jun 18, 2022 20:22:43 GMT
Bullshit always rides a whitewashed horse. Yeah I'm absolutely not taking that bait. It would be bad enough if they simply ended QE. But they are now selling bonds and sucking money out of the system. Time to watch and wait a while.
By the way, QE built the crypto market. It is deflating rapidly. Today looks bad. Bitcoin < $18,000, Doge in the .04's.
|
|
|
|
Post by glennkoks on Jun 18, 2022 22:08:59 GMT
Key word in that article is "could".
Lots of things could happen. I'm going with the economy "could" struggle for months and months if not years due to our fiscal irresponsibility, endless QE and helicopter money. I have no idea what will happen but i'm sticking with old school financial wisdom that: National debt is a bad thing. Inflation is a bad thing. Endless wars are a bad thing and most importantly hard work, fiscal responsibility, saving and peace are good things...
|
|
|
|
Post by duwayne on Jun 21, 2022 17:04:20 GMT
Glennkoks, you asked me whether I thought we were headed for a repeat of 2008. I explained why I didn’t think so. You repeated my arguments so I’ll presume we are in agreement. You indicate we are headed towards a repeat of the 1970’s. Can you be specific about why the market fell by 50% in the 1970’s? I believe there is a reasonably simple explanation, but I prefer that you go first this time since you’ve already reached a conclusion. duwayne, I think this downturn will have similarities to the downturn in the 1970’s. I don’t think it will necessarily be a repeat. We had inflation in the 1970’s but it was not caused by years of QE, out of control deficit spending, helicopter money and an intentional shutdown of the economy in a response to a pandemic. Prior to 2007 QE had never been tried before. The term in vogue then was “non-traditional monetary policy”. Which is a really nice way of saying we have no idea WTF will happen but we are in a real pickle and we got to try something or were in The Great Depression II. Well many economists warned that QE had consequences. Flash forward 14 years and we are seeing those consequences. I have no idea what the market will do, my best guess is a 40-50% fall from the highs, a moderate to deep recession possibly some really bad stuff. That is why I moved to safety last September and I’m not riding this one down. If I miss some gains, I’m good with it. There’s one “Event” which I believe played the major role in the 50% market drop in the 70’s or more specifically in 1973-1974.
This is from memory, so it may be off slightly, but I believe the market hit an all-time high at the beginning of 1973. In October of 1973 the Arab Oil Embargo began. OPEC cut off oil to countries which were viewed as friendly to Israel and complicit in Israel’s aggressive tactics (reprisals) against their neighbors.
At that time the US imported nearly 40% of its crude oil needs.
After the oil supply cutoff, oil prices sky-rocketed. Oil and oil products were in short supply.
Stocks drifted downward.
On about April of 1974, I believe, OPEC resumed shipments but at prices more than double those prior to the embargo. US oil consumption which had been growing by 6% annually prior to 1973, stopped growing over time because of OPEC’s new, dramatically higher prices.
The resulting economic slowdown caused stocks to fall in 1974 by 50% from their 1973 high.
So there have been three 50% market falls since 1950. One was related to sub-prime loans, and one was related to the Arab Oil Embargo and the oil price increase.
The third 50% market fall also has a fairly simple explanation and definite cause. The dot.com bubble burst.
There were no other times since 1950 when the market has fallen by as much as 40%.
To me, these market-killer “Events” were clearly distinguishable from the normal run-of-the mill causes of recessions such as inflation, Fed interest rate increases, inventory blips or unemployment blips which typically result in market drops of 20-30%.
There were 3 market drops in the 30 to 37% range which had unusual causes including the 37% COVID drop.
I continually watch for “Events” which could ultimately cause a 30-50% market drop, and I haven’t pinpointed one currently. But that, of course, doesn’t guarantee that it won’t happen.
Last week the S&P 500 was down 25.5% at one point from its all-time high. This is consistent with the typical recession decline of 20-30%. |
|
|
|
Post by nonentropic on Jun 21, 2022 19:37:55 GMT
The world is different now there is no fear of QE or its actually legal thus a tool.
The problem is that the fed or the other central banks have mistaken this for the right to micro manage the market.
It is not their responsibility to maintain the solid performance of the retirement industry. The signals are just that and demand a change in behavior. We did not change and the consequences are here.
The tools are consequently blunt and with inflation now added in and lets be clear anybody under about 50 has weak recollection of the last period of inflation.
This will be a 30% event the yields of both the bonds and shares will re-stabilize/align and people go on grizzling about how hard it is to live on what they get. Business as usual.
|
|
|
|
Post by glennkoks on Jun 21, 2022 23:25:24 GMT
duwayne, I think this downturn will have similarities to the downturn in the 1970’s. I don’t think it will necessarily be a repeat. We had inflation in the 1970’s but it was not caused by years of QE, out of control deficit spending, helicopter money and an intentional shutdown of the economy in a response to a pandemic. Prior to 2007 QE had never been tried before. The term in vogue then was “non-traditional monetary policy”. Which is a really nice way of saying we have no idea WTF will happen but we are in a real pickle and we got to try something or were in The Great Depression II. Well many economists warned that QE had consequences. Flash forward 14 years and we are seeing those consequences. I have no idea what the market will do, my best guess is a 40-50% fall from the highs, a moderate to deep recession possibly some really bad stuff. That is why I moved to safety last September and I’m not riding this one down. If I miss some gains, I’m good with it. There’s one “Event” which I believe played the major role in the 50% market drop in the 70’s or more specifically in 1973-1974.
This is from memory, so it may be off slightly, but I believe the market hit an all-time high at the beginning of 1973. In October of 1973 the Arab Oil Embargo began. OPEC cut off oil to countries which were viewed as friendly to Israel and complicit in Israel’s aggressive tactics (reprisals) against their neighbors.
At that time the US imported nearly 40% of its crude oil needs.
After the oil supply cutoff, oil prices sky-rocketed. Oil and oil products were in short supply.
Stocks drifted downward.
On about April of 1974, I believe, OPEC resumed shipments but at prices more than double those prior to the embargo. US oil consumption which had been growing by 6% annually prior to 1973, stopped growing over time because of OPEC’s new, dramatically higher prices.
The resulting economic slowdown caused stocks to fall in 1974 by 50% from their 1973 high.
So there have been three 50% market falls since 1950. One was related to sub-prime loans, and one was related to the Arab Oil Embargo and the oil price increase.
The third 50% market fall also has a fairly simple explanation and definite cause. The dot.com bubble burst.
There were no other times since 1950 when the market has fallen by as much as 40%.
To me, these market-killer “Events” were clearly distinguishable from the normal run-of-the mill causes of recessions such as inflation, Fed interest rate increases, inventory blips or unemployment blips which typically result in market drops of 20-30%.
There were 3 market drops in the 30 to 37% range which had unusual causes including the 37% COVID drop.
I continually watch for “Events” which could ultimately cause a 30-50% market drop, and I haven’t pinpointed one currently. But that, of course, doesn’t guarantee that it won’t happen.
Last week the S&P 500 was down 25.5% at one point from its all-time high. This is consistent with the typical recession decline of 20-30%. I appreciate your comments and I don't want to sound like a smart ass. But historically you are not comparing apples to apples. None of the previous Bull Markets were fueled by QE, helicopter money and super easy monetary policy. I think you are missing the mark comparing what happened with the other 50% falls. We really are in uncharted territory. If you are looking for comparisons, look to what Japan did in the late 1980's, their response and the resulting lost decades. I'm clearly not Warren Buffett. Your forecast is as good as mine. I only hope that when it comes to your personal financial decisions I am at least giving you something to think about. Most of America has done quite well over the last 13 years. To use a gambling cliche it's been an incredible streak. There is nothing wrong with taking something of the tables and "protecting your wins". |
|
|
|
Post by code on Jun 22, 2022 2:20:09 GMT
Recession. Millions of layoffs. Mass unemployment. Hornet’s nest stirred up by Larry Summers’s latest forecast.Last Updated: June 21, 2022 at 1:48 p.m. ET
|
|
|
|
Post by Sigurdur on Jun 22, 2022 12:50:27 GMT
Biden administration policies are productive for accelerated inflation. They are NOT productive for production.
He is a figurehead at best. Ron Klaine is running the show.
|
|
|
|
Post by walnut on Jun 22, 2022 12:56:26 GMT
Biden administration policies are productive for accelerated inflation. They are NOT productive for production. He is a figurehead at best. Ron Klaine is running the show. Murderer- conspirator
Ron Klain
From Wikipedia, the free encyclopedia
During the 2020 Biden campaign, Klain served as an advisor on the Covid-19 pandemic.[39] In April 2020 he told Wired: "If we’re going to make Covid-19 go away, we’re going to need a very high vaccination rate. The number one public health challenge of 2021 is going to be getting people to take the vaccine."[39] On November 11, 2020, it was announced that President-elect Joe Biden had selected Klain to be White House Chief of Staff.[40][41]
|
|
|
|
Post by duwayne on Jun 23, 2022 15:19:40 GMT
There’s one “Event” which I believe played the major role in the 50% market drop in the 70’s or more specifically in 1973-1974.
This is from memory, so it may be off slightly, but I believe the market hit an all-time high at the beginning of 1973. In October of 1973 the Arab Oil Embargo began. OPEC cut off oil to countries which were viewed as friendly to Israel and complicit in Israel’s aggressive tactics (reprisals) against their neighbors.
At that time the US imported nearly 40% of its crude oil needs.
After the oil supply cutoff, oil prices sky-rocketed. Oil and oil products were in short supply.
Stocks drifted downward.
On about April of 1974, I believe, OPEC resumed shipments but at prices more than double those prior to the embargo. US oil consumption which had been growing by 6% annually prior to 1973, stopped growing over time because of OPEC’s new, dramatically higher prices.
The resulting economic slowdown caused stocks to fall in 1974 by 50% from their 1973 high.
So there have been three 50% market falls since 1950. One was related to sub-prime loans, and one was related to the Arab Oil Embargo and the oil price increase.
The third 50% market fall also has a fairly simple explanation and definite cause. The dot.com bubble burst.
There were no other times since 1950 when the market has fallen by as much as 40%.
To me, these market-killer “Events” were clearly distinguishable from the normal run-of-the mill causes of recessions such as inflation, Fed interest rate increases, inventory blips or unemployment blips which typically result in market drops of 20-30%.
There were 3 market drops in the 30 to 37% range which had unusual causes including the 37% COVID drop.
I continually watch for “Events” which could ultimately cause a 30-50% market drop, and I haven’t pinpointed one currently. But that, of course, doesn’t guarantee that it won’t happen.
Last week the S&P 500 was down 25.5% at one point from its all-time high. This is consistent with the typical recession decline of 20-30%. I appreciate your comments and I don't want to sound like a smart ass. But historically you are not comparing apples to apples. None of the previous Bull Markets were fueled by QE, helicopter money and super easy monetary policy. I think you are missing the mark comparing what happened with the other 50% falls. We really are in uncharted territory. If you are looking for comparisons, look to what Japan did in the late 1980's, their response and the resulting lost decades. I'm clearly not Warren Buffett. Your forecast is as good as mine. I only hope that when it comes to your personal financial decisions I am at least giving you something to think about. Most of America has done quite well over the last 13 years. To use a gambling cliche it's been an incredible streak. There is nothing wrong with taking something of the tables and "protecting your wins". US Federal Deficit spending has been around for a long time, through several bull markets. If you have an analysis (not arm-waving) that shows the current situation will lead to something more than a typical recession, I’m interested. I’m really interested if you are willing to make a prediction with convincing rationale.
As to whether we are in a situation similar to Japan in the mid-1980’s when their stock market peaked, here’s what I remember.
Japan’s stock market price earnings ratio was around 60 versus a typical US number of 15. Japan’s economy was fueled by exports. Japan depreciated “manipulated” its currency to give themselves a trade advantage to sustain the export market which carried their economy.
The US got tired of the manipulation by Japan and others and they negotiated something called the “Plaza Accord”. This allowed the US to purposely depreciate the US dollar which cut significantly into Japan’s export market.
Japan’s economy suffered. Production was cut back. The Japanese practice of lifetime employment limited the ability of companies to cut costs. Banks were carrying large amounts bad debt on their books even before the recession due to their hesitancy to force companies into bankruptcy.
There was no way stop the decline. Price earnings ratio’s fell in addition to the earnings fall. Stocks fell to something more reasonable.
I don’t see that as being similar to the current US situation. |
|
|
|
Post by glennkoks on Jun 23, 2022 17:20:13 GMT
I appreciate your comments and I don't want to sound like a smart ass. But historically you are not comparing apples to apples. None of the previous Bull Markets were fueled by QE, helicopter money and super easy monetary policy. I think you are missing the mark comparing what happened with the other 50% falls. We really are in uncharted territory. If you are looking for comparisons, look to what Japan did in the late 1980's, their response and the resulting lost decades. I'm clearly not Warren Buffett. Your forecast is as good as mine. I only hope that when it comes to your personal financial decisions I am at least giving you something to think about. Most of America has done quite well over the last 13 years. To use a gambling cliche it's been an incredible streak. There is nothing wrong with taking something of the tables and "protecting your wins". US Federal Deficit spending has been around for a long time, through several bull markets. If you have an analysis (not arm-waving) that shows the current situation will lead to something more than a typical recession, I’m interested. I’m really interested if you are willing to make a prediction with convincing rationale.
As to whether we are in a situation similar to Japan in the mid-1980’s when their stock market peaked, here’s what I remember.
Japan’s stock market price earnings ratio was around 60 versus a typical US number of 15. Japan’s economy was fueled by exports. Japan depreciated “manipulated” its currency to give themselves a trade advantage to sustain the export market which carried their economy.
The US got tired of the manipulation by Japan and others and they negotiated something called the “Plaza Accord”. This allowed the US to purposely depreciate the US dollar which cut significantly into Japan’s export market.
Japan’s economy suffered. Production was cut back. The Japanese practice of lifetime employment limited the ability of companies to cut costs. Banks were carrying large amounts bad debt on their books even before the recession due to their hesitancy to force companies into bankruptcy.
There was no way stop the decline. Price earnings ratio’s fell in addition to the earnings fall. Stocks fell to something more reasonable.
I don’t see that as being similar to the current US situation. duwayne, I think you are confusing federal deficit spending with quantitative easing. Deficit spending is Uncle Sam putting things on the credit card to be paid back at a later date with interest. QE is a monetary policy where a central bank simply "prints" money increasing the supply in the system. While neither is desirable I would argue that QE is far more dangerous. It can cause inflation (imagine that) and create asset bubbles. Being as QE has never been tried before in the United States prior to 2007 I have no data to offer with "convincing rationale" as it applies to what the Fed did. We are in uncharted waters when it comes to the long term effects of QE. The only example we have is Japan and the results have been well documented in their lost decades. Since QE did not fuel the other bull markets nor cause the recessions following those runs I think it's dangerous to assume this recession will be just like the others. www.investopedia.com/articles/markets/052516/japans-case-study-diminished-effects-qe.asp |
|
|
|
Post by duwayne on Jun 24, 2022 16:45:14 GMT
US Federal Deficit spending has been around for a long time, through several bull markets. If you have an analysis (not arm-waving) that shows the current situation will lead to something more than a typical recession, I’m interested. I’m really interested if you are willing to make a prediction with convincing rationale.
As to whether we are in a situation similar to Japan in the mid-1980’s when their stock market peaked, here’s what I remember.
Japan’s stock market price earnings ratio was around 60 versus a typical US number of 15. Japan’s economy was fueled by exports. Japan depreciated “manipulated” its currency to give themselves a trade advantage to sustain the export market which carried their economy.
The US got tired of the manipulation by Japan and others and they negotiated something called the “Plaza Accord”. This allowed the US to purposely depreciate the US dollar which cut significantly into Japan’s export market.
Japan’s economy suffered. Production was cut back. The Japanese practice of lifetime employment limited the ability of companies to cut costs. Banks were carrying large amounts bad debt on their books even before the recession due to their hesitancy to force companies into bankruptcy.
There was no way stop the decline. Price earnings ratio’s fell in addition to the earnings fall. Stocks fell to something more reasonable.
I don’t see that as being similar to the current US situation. duwayne, I think you are confusing federal deficit spending with quantitative easing. Deficit spending is Uncle Sam putting things on the credit card to be paid back at a later date with interest. QE is a monetary policy where a central bank simply "prints" money increasing the supply in the system. While neither is desirable I would argue that QE is far more dangerous. It can cause inflation (imagine that) and create asset bubbles. Being as QE has never been tried before in the United States prior to 2007 I have no data to offer with "convincing rationale" as it applies to what the Fed did. We are in uncharted waters when it comes to the long term effects of QE. The only example we have is Japan and the results have been well documented in their lost decades. Since QE did not fuel the other bull markets nor cause the recessions following those runs I think it's dangerous to assume this recession will be just like the others. www.investopedia.com/articles/markets/052516/japans-case-study-diminished-effects-qe.aspGlennkoks, I can see how you conclude that I got QE mixed up with deficit spending. I deleted a paragraph from my post which had gotten too long before posting but somehow left in the sentence starting with “US Federal Deficit spending..” which shouldn’t be there. Just ignore it. |
|
