I dunno ... '08 and '20 were pretty dire... and if I was a youngin' just getting started, now is lot better than it was back in '83 too imo. Silver is way to heavy, and if ya can't hit the side of a barn, all that ammo won't help much either ;)...

amen!

You have to be omniscient to be able to calculate all the variables that are in play to pick a specific hour and day.

I did say in 2017 that I thought 2022 would be the year..that all the problems would take time to line up and come to fruition.

To that end Robert Kiosaki author of "Rich Dad Poor Dad" says we are already in collapse..

Black Rock has recently said, "The reset is here." Which means the system as we know it is done and a new normal is about to emerge. I think that Black Rock reflects the gossip around the water cooler at the FED.

Then there is the long list of other Masters of the Universe who are proclaiming the brown stuff is hitting the fan..where bad things are about to happen..

So take a look around, check what the Masters have to say about the circumstances and draw you own conclusions.

Today:

10 yr T Bill = 3.42 %

3 month T Bil = 4.33%

SP 500 day after 0.5% rate hike to 4.25% to 4.5%....<99.57> to 3895.75

The inversion indicates that investors do not believe that the economy can be turned around by the FED..After not being able to turn things around for over a decade people are finially giving up on the FED and are criticizing it's every move. The requisite that I outlined in Sept 2012 was that so long as the FED maintained credibility Equities and the economy would hold together..now the length of time where things have not gotten better has created a fatigue..reflected by dissatisfaction of the FEDs job performance. Trending is the hopelessness of despair that the malaise will ever be rectified or alleviated.

Retail sales were down 0.6% in November
Mfg order are continuing to decline in December even though inflation is abating.

In spite of declining prices (one would think because of Demand Destruction) retail sales have not picked up.


Hey ifn you want a pair of Allen Edmonds and can not afford the $400 price tag...I can fix you up with a nice pair of used Edmonds that will serve you well for a price you can afford .

My two cents, again.

Probability of a synchronized global downturn in 1H23 is rising.

- US: Fed is focused on inflation, and will do what it thinks is needed to bring inflation back down to 2%, at the cost of a recession if that’s what it takes. Pundits are saying “Powell is going to be surprised when jobs go negative in 1Q”. Fed SEP (basically survey of FOMC members’ economic expectations) has unemployment 4.4-4.7% by end 2023, from 3.7% now, each 1% is 1.6MM jobs if no change in labor force, and Fed isn’t seeing growth of labor force, so that means Fed expects up to 1.6MM net job loss over 2023. So, no, Powell won’t be surprised. Pundits are saying “employment is a lagging indicator, Fed is driving looking in the rear view mirror, when it sees the downturn and job losses it will pivot and start lowering rates”. The Fed has more economic analytical horsepower than anyone, I think it is driving looking through the windshield, it sees the downturn and job losses ahead, and intends to keep driving to 2% inflation. So, unless inflation rapidly and convincingly recedes, the odds of a recession starting in 1H23 are rising. Oh, Powell knows goods inflation is declining and housing inflation will decline in 2023, but services are 55% of the inflation index and Fed believes that won’t be brought under control until it has forced the labor market “into balance”, and means job losses.

TL.DR - The Fed is not trying to “turn things around” if by that you mean avoid a downturn. The Fed is trying to kill inflation fast and avoid a repeat of the 1970s. Jobs, stock prices, house prices - all will be sacrificed if need be.

- Europe: ECB raised 50 bp, said it will not let high inflation expectations get entrenched, and will continue raising. Europe is being pummeled by energy costs and the Russian war. Their recession has probably already started.

- UK: Similar to Europe, with Brexit another self-inflicted wound. Similar to Europe, and BOE is explicitly forecasting a recession and raising rates into that.

- China: Their economy was bad already, Xi has gutted the housing sector and hobbled the tech sector, now they’ve hastily dropped almost all Covid measures and are starting what’s going to be a huge Covid wave, with mediocre vaccines, low vax rates, many vaccinations over a year old, and a very poor medical system. Xi has driven local governments to the financial brink with years of staggeringly expensive hard Covid lockdowns (what does it cost to PCR test the entire propulation of a city every three days?) and his economic reforms. Now he’s trying to revive the economy by reopening but economies don’t revive during a huge Covid wave with people hiding at home.

I think all this comes together in 1H23.

Bond market gets it. Bond guys are smarter than stock guys, when it comes to economics.

Stock market doesn’t. Equity investors see falling 10Y yields and think “yaay, raise valuations”. But it matters *why* 10Y yields are falling. Yields falling and inverting because the economy is slowing is not bullish.

Before CPI report, I took portfolios more defensive. That felt bad on Tuesday, by end of Wed SP500 had given up its CPI pop, and today I wish I’d gone more defensive yet.

For the sake of all the people who are going to get hurt, I should hope my outlook is wrong. But their sakes are their problem, and so I hope I’m right. I’m set up to survive the slide to low 3 handle with tolerable losses and emerge with mountains of cash to scoop up cheap stocks, and I want those bargains.

It is getting worse and worse for people on the edge. Maybe they will wake up when they start getting hungry.

That said, I just bought a 6mth T Bills today at 4.807% noncompetitive bid. Not too shabby considering the tax advantages...and as easy as a click on my computer (on the Treasury Direct web site). Still not great with regard to inflation...but low risk compared to other "opportunities".

Good analysis, but things are so hard to predict, because most analysis is done assuming at least a semi-rational and responsible government.
Which we no longer have.
For example, who could have predicted that the massive over-reaction, lockdowns, shutdown of almost the entire economy in the face of a virus that had almost no health effect on 75-90% of the population would cause a giant economic “boom.” (In quotes because it was of course a fake boom, the “gains” are rapidly evaporating, leaving us holding non empty bag of inflation and instability).
Where you’d expect everyone to responsibly share in some collective economic pain in the face of a negative event, the Govt (on a bipartisan consensus) instead threw the biggest party/orgy in the history of the world.
We now have a govt that acts as a guarantor of everything (esp if the negative consequence can be shown to affect certain groups in any way).
So, unemployment goes up? That’s a crisis! Need another Inflation “Reduction” Act to print and distribute a few hundred billion more.
People can’t pay mortgages? Crisis! Make others pay for it.
People don’t want to work or pay rent? Crisis! Let and encourage them to steal it.
So living in a world where any crisis” can be manufactured or exploited, it’s very difficult to predict what the Govt is going to do, and it has a huge effect on the economic system. Living in a world that no longer seems to recognize or value objective reality (e.g. having the cojones to call a clearly pro-inflationary law an “Inflation Reduction Act,” or calling clearly dangerous and persistent inflation “transitory”) also leads to much instability and unpredictability.
The bottom line is it seems that “normal” economic analysis isn’t good enough anymore, it feels like it needs to also at least try to reflect some of the insanities of the world we now live in.

The percentage of Americans living paycheck to paycheck has risen to 63% yet we are borrowing massive amounts of money to send all over the world as "aid" (even to our enemies). One has to wonder just how much worse this will be as we have to service the exploding debt during a deep recession.

I’d add that making bets on the medium-term (few months to a year or two) is, I think, very different (and easier) than making long-term bets. At least if you’re talking about macro economic stuff.

Like right now, you can say with some confidence what Congress will do in the coming several months. Answer: probably nothing much, other than play chicken with the debt ceiling, assuming no big external event that it has to react to. That inaction, in the face of pressing issues, is part of the insanity. What might Congress do over the next five years? No clue, other than play chicken with the debt ceiling.

Maybe we could just stop spending millions on things like the "gain of function research" in China that has restarted (brought us COVID last time) and importing illegal immigrants. At least until the bleeding stops.

It’s now hard to imagine that 5 years could possibly pass without some “big” event(s) the Govt “has” to react to in a huge way (i.e., trillion(s) of reactionary spending).

The only thing that can be counted on is massive spending, entitlement expansion and debt increase is now never going to stop, or even be slowed in any meaningful way. That ship has sailed.

To me, given what’s happened in the past 3 years, it feels like inflation is going to be much harder to tame than people think. It feels like whatever the opposite of “transitory” is. (I don’t have any hard analysis to support that feeling though).

What actions should they take?

For another thread. Probably end up in PARF :-)

Investment-wise, I think what we think Congress should do is not important, what matters is what it will do, and “what will” is easier to figure out.

I’m just grasping for some hope that long term solutions even exist :)

not with a ridged no tax no hope of any tax
the dogma forbids the tax option

as that would effect those who gain from inflation

small weak governments can not stop inflation
one of the main flaws in the Gop gospel

markets can't control price spirals
if they effect the whole market not just a small bit

On China, it needs to get its consumers spending and develop its consumer economy, but the Chinese system directs so little money to households to spend with. Something like 1.1BN Chinese make less than USD 300 per month per person in the household.

“in 2019, there were about 100 million people in China with a per capita household monthly income of less than 500 yuan ($72), about 310 million people with less than 1,000 yuan, and about 710 million people with less than 2,000 yuan.” Caixinglobal article.

Since you are so rich you should and will be contributing much of your ill gotten gains to help the poor..and now the IRS has 87,000 more agents to make sure you pay up..your fair share.

Smile and be happy:)

This will never happen as China has no social safety net...if you get sick you need money to pay the MD, when you get old you need money to buy groceries...

You don't make any sense...

The real solution has always been a fundamental change in your life style... and in your perceptions about what constitutes success..For the Secular Rationalist who is grounded in the objective it is materialism... how much you are worth...

That notion is about to be wiped clean..

I started contributing every cent I made to the poorest person I knew back in the early 70s. He worked hard, lived frugally and raised a family. His delayed gratification has provided for him/his family pretty well.

It is not that difficult to work hard and smart. Almost anyone can do it.

I have no ill-gotten gains.

I am pretty happy. I am blessed.