2001, 2008, or 2022
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Anonymous
The US may not be handling this well, but we’re doing better than a lot of others. Many think Japan has pushed the limits of their ability to keep interest rates low and the yen is about to implode. The dollar is still the best alternative. One point that a lot of people are missing is that this isn’t the 70’s. The US is an oil *exporter* and oil is traded in dollars. https://www.wsj.com/articles/with-markets-in-disarray-international-investors-are-stockpiling-u-s-dollars-11655803800 “We think that we will see an oil spike at some point this summer,” said Stephen Gallo, European head of FX strategy for BMO Capital Markets. “With the United States’ near energy-independence status and the dollar still being the primary currency for oil purchases, an oil spike would induce U.S. dollar upside.” |
Anonymous
Morgan Stanley’s economist called it correctly. |
Anonymous
Called what? The fact there would be a sell off? So did other economists. But just a month ago he predicted a bottom of 3400: https://www.bloomberg.com/news/articles/2022-05-23/morgan-stanley-s-wilson-says-too-soon-to-turn-bullish-on-stocks |
Anonymous
| Look, the doomsayers believe that the Fed must immediately return inflation to 2%, which will require sufficiently high interest rates to create a recession. But, they’re missing a lot. First, the Fed doesn’t have to return inflation to 2% immediately. More likely, they will balance inflation and economic growth. So, the Fed is more likely to accept 4% inflation for 2023 and 4% unemployment instead of 2% inflation and 10% unemployment. Economics is a SOCIAL science implemented by people, not a physics phenomenon implemented by the vagaries of nature. We can choose our medicine. There are options. Second, the doomsayers don’t allow for any inflation help from China’s supply chain improvements or resolution to Russia’s war. Unlike Russia, China actually makes things and wants their economy to thrive. They don’t want the world to move its manufacturing base from their country. On the war front, the US Treasury is now floating the idea that Russia be allowed to sell oil at discounted rates. Russia already does this for India and China. The idea is to keep Russian oil on the market but deprive them of market rates. Both of these changes would improve inflation, essentially doing part of the Fed’s job for it. In those circumstances, the Fed wouldn’t have to raise rates sky-high, unemployment would stay low, and the stock market would bottom sooner and rise more quickly. Beware of the doomsayers. |
Anonymous
And “inflation is transitory.” The Fed had a chance for the “soft landing” and they missed it. History says that when inflation reaches these levels before the aged acts, the result is a recession. The idea that the supply chain issues and oil prices are going to miraculously resolve themselves and save us is a pipe dream. Europe isn’t going to go back to being dependent on Russia for energy. In any case, Oil isn’t even the problem now — it’s refinery capacity. |
Anonymous
| Oil prices are a scam. Biden starts jawboning the oil companies and refineries and oil suddenly drops to $105 from $117. Don’t tell me it’s on lower demand because now is peak season. Refiners and trading speculators are where it’s at, especially the latter. |
Anonymous
DP. IMO, inflation will solve itself with a recession. Oil and other commodity prices are starting to crack in the past week or so with the R word looking more likely from both NY and ATL Fed real time data. Additionally, a massive amount of liquidity has already been destroyed that will add to large disinflationary, if not deflationary, pressures- because that's what happens when asset bubbles pop. However since we can't tolerate the amount of deflation needed to fully cleanse the system these days, the Fed will eventually save the day and cut the QT/resume QE within the next 6-12m to order to reflate everything. In order words- short term bearish, long term bullish. |
Anonymous
No (except for refinery capacity). You don’t lose a million barrels of refinery capacity a day and have no impact. Oil prices are dropping because it’s a leading indicator. Oil traders are pricing in a recession. The former NY Fed President says a “soft landing” is impossible. https://twitter.com/annmarie/status/1539557752099438592?s=21&t=L3ejZEKoruCT40turtbi_g |
Anonymous
Oh, and Biden’s “jawboning” followed the drop — he’s just hoping people like you will miss that and give him credit. |
Anonymous
Not predicting the exact place the Dow would settle doesn’t make him wrong. It makes him a LOT more right than the “experts” that are allegedly running the country. https://www.zerohedge.com/markets/does-terrible-monetary-policy-ever-become-criminal-negligence The most recent smattering of these downright demonstrably false claims has included: “There’s nothing to suggest a recession is in the works” - Janet Yellen, last week “I wouldn’t do it differently. I was very supportive of the American Rescue Plan.” - Janet Yellen, last week U.S. inflation risk is “small” and “manageable” - Janet Yellen, March 2021 “I don't anticipate that inflation is going to be a problem” - Janet Yellen, May 2021 "I don't think there's going to be an inflationary problem.” - Janet Yellen, May 2021 "In the 1970s, a series of supply shocks became a longer run problem ... that partly occurred because policy makers weren't trusted by the public to deal effectively with inflation. But I certainly see no evidence that that's the case now." - Janet Yellen, November 2021 The Fed “shouldn’t overreact to ‘temporary’ inflation” - Neel Kashkari, November 2021 “There’s nothing that I’m seeing in these fundamental factors that leads me to think that this is a long-term change in inflation or inflation expectations.” - Neel Kashkari, November 2021 “If we overreact by saying ‘let’s change the path of monetary policy’…that could lead to a worse long-term outcome for the economy.”- Neel Kashkari, November 2021 “What’s the economic theory that a one time boost of fiscal spending, a one time boost of demand - it leads to higher prices, yes - does it lead to higher inflation, which means ongoing year after year after year of continuing price increases. I don’t really understand the mechanism by which Larry Summers thinks this one time fiscal stimulus leads a change in the path of inflation.” - Neel Kashkari, November 2021 “The key here is from my perspective as a Central Banker is not to overreact. We want to pay attention to the data, we want to look at the evidence and we want to make our adjustments prudently, not just overreact because Twitter is hyperventilating.” - Neel Kashkari, November 2021 “I can’t predict the future any better than Bill Dudley can.” - Neel Kashkari, November 2021 “Inflation is higher than I expected, and it's the high inflation has lasted longer than I expected. We know the US economy is recovering from the COVID shutdown and the downturn. But the recovery is uneven, and demand has recovered more quickly than supply has. So given those facts, it's not that surprising that inflation is coming up higher than we expected. But it should start to normalize over the course of this year, if a couple things happen: if workers come back into the job market. We're still missing 3 or 4 million workers. And if supply chains start to sort themselves out, which I hope that they will. But obviously the Federal Reserve has an important role to play and we're going to do our part.” - Neel Kashkari, January 2022 “So that's why the fact that the yield curve has flattened a lot over the past six months, that's giving me some indication that we're probably not that far away from neutral, not as far away as maybe we thought.” - Neel Kashkari, January 2022 “So you know, neutral is a concept and so it's not as if there's an equation exactly where it is. For me, it's somewhere between 2 and 2.5 percent.” - Raphael Bostic, May 2022, when CPI rose 8.6% |
Anonymous
First, you linked to Zero Hedge. Seriously? Second you are proving my point. No one can predict the future perfectly. You were the one who quoted an economist stating we were going to see a further 33% drop to S&P 500. I countered that those people tried to make prior predictions about the bottom and are moving the needle as new information comes out. You countered by showing old quotes from people who made prior predictions that are also proving to be wrong as new information comes out. This is why you should not try to time the market. Because even the best folks are sometimes wrong and adjust their views in light of new information. FWIW, that economist also predicted the S&P 500 will hit 5000 by 2024. |
Anonymous
| Increasingly, the doomsayers are looking stupid. Commodities are turning. Inflation will moderate by year-end. The Fed will not raise rates to 6%. Get ready to miss the 2H equity rally if you believe the nuts. |
Anonymous
You’re attacking the source, but those are direct quotes. They’re not incorrect. And they’re not “old.” Some are from last week. You’re saying someone who predicted the trend, but got the exact magnitude wrong is as wrong as someone (who happens to making policy) who not only got the trend 180 degrees wrong, but can’t even see reality as it is happening. If you mean “don’t time the market” as in, don’t sell all of your holdings and put the cash under your mattress, I agree. However, there were and are reasonable adjustments that can be made in preparation for what was (as in last fall) and is (as in now) clearly coming. You are either a broker that didn’t properly position your clients and is trying to talk them into continuing to buy, irrespective of what the market is doing, ir someone who bought all spring and is now trying to explain why they did the right thing. |
Anonymous
LOL. I knew there would be someone here saying this. Two days of a flat market and the crises is over! FWIW, commodities are turning because the traders are pricing in a recession. |
Anonymous
Oh, so you thought commodity prices were going higher because the economy is doing well and demand is shooting higher? Can’t have it both ways. |