Is the stock market going to tank?

[The SnowShow]

The good-ish news is demand destruction from tariffs is lowering inflation. The bad news is this tariff nonsense is hurting American exports and increasing *not decreasing* the American trade deficit. Exports are falling more than imports. A weaker dollar should be helping, but it's not. America's trade deficit increased 11-percent

So Diaper Donnie will just brag that inflation is down and his stupid minions will lap it up:
“see, I did that. I did what no president has ever been able to do, I brought you lower inflation, I brought you 1.98 gas, something Biden, Hillary and Obama could not do. I brought you a whiter America that is Great Again!! And I brought peace to the Middle East, which was a disaster under Biden and Obama. Thank you for your attention to this matter!”

[Danno]

Wow, have you been writing his tweets?

[J. Barron DeJong]

The Fed Chair does not think tariffs are lowering inflation on net:

POWELL: FED PROJECTIONS ARE FOR INFLATION TO MOVE UP BECAUSE OF TARIFFS

https://bsky.app/profile/fintwitter..../3lsecchf7k62j

Powell says the Fed was prepared to keep cutting interest rates until Trump implementing tariffs that will increase inflation

Video: https://bsky.app/profile/atrupar.com/post/3lsehxysoxr2g

[XXX-er]

Goggle it yoursel Trump is breaking off all trade discussions with Canada

[MultiVerse]

Inflation came in mild in May. PCE inflation ticked up only 0.1-percent. There's delicate stagflationary wind blowing through the economy. Otherwise, tariffs would increase prices in a healthy economy. The reason why they haven't much so far is because personal incomes and consumption fell i.e., demand destruction. The comments in Jong's thread draw the wrong conclusion. A recession will lower, not increase, inflation. It should go without saying that a recession would be worse than the 2-to-3-percent we've been experiencing over the past couple of years

[Cono Este]

This Canadien digital tax was passed in 2024?

And you guys are giving trump shit? While you tax yourselves to death?

[jono]

There's delicate stagflationary wind blowing through the economy.... A recession should lower, not increase, inflation.

FIFY

IANOD, but if there's an OCD coping tool that would help keep you more objective in the presence of deJong's posts it would benefit us all.

[fastfred]

Empirical evidence: The number of construction project starts in the Big Sky area has collapsed. LML has stopped building vertical and is doing civil only for the most part. They did the same thing prior to 2008. Reasons given: Too much supply, labor rates are insane, material costs are equally insane. Laborers that were being begged to work and at $ 30.00 + p/hr are now finding that $22-25.00 p/hr is a good wage again, if you can find it.

shit is off the hook in scummit county colorado

not enough workers too many jobs going on the boom keeps booming here

but hey every tom dick harry and rachel the realtor are saying all the same dumb shit that they said right before the 2008 collapase many people were'nt part of that or were too young to remember or they forgot since the average attention span of someone is a few days

building starts are down all over the country

my only argument about wages is that a huge percentage of skilled workers are going to bail on the building industry when a down turn hits

guys are aging out anyways kids think they can learn everything in a month or two and they are highly skilled

so wages might dip but they will only go back up even higher guys like me and the guys I employee will sit at home at this point instead of taking shit wages


lucky for me I planned on quiting this summer anyways so I timed the market perfectly bailed on 3 jobs I was suppose to start and I'm going to enjoy myself and travel for the next year or so and yeah buy low this winter

[Bunion 2020]

^^^ The core members of the construction teams I work with are all 50+ and know their shit inside and out or are < 30 with not much experience. The old guys are all saying (this is the last one). Good thing we have a lot of Hispanics to do the hard work.

[MultiVerse]

FIFY

IANOD, but if there's an OCD coping tool that would help keep you more objective in the presence of deJong's posts it would benefit us all.

You did not "fix it". A recession is defined as a period of declining economic activity starting with two consecutive quarters of negative GDP growth, rising unemployment, and falling asset prices. Stagflation, on the other hand, combines stagnant economic growth with high inflation and high unemployment. In other words, the difference between the two is falling vs rising prices.

Perhaps in the future you should try to be more objective in your own kneejerk defense of poorly informed posts

[jono]

The point is you can have both. Just as stagflation implies very minimal growth but high inflation, it's possible to go into slight shrinking with still high inflation, which is why a recession *should* lower prices, but may not do so when stagflation is "blowing through the economy."

[MultiVerse]

The point is you can have one or the other, but not both. The reason why it matters is because they require different policy responses

[fastfred]

whats the chances J Powell finds a new job

a yes man is appointed interest rates are cut 2% immediatly

A feeding frenzy starts again on real estate

corporate debts jumps up high on all that cheap money and the stock market is at 50K

[MultiVerse]

I think we are close to being in a fiscally dominate regime. That means government policy matters as much as what the Fed does. So Trump might get his new Chair. But policy is still made by committee. And even if the Fed cuts, markets not the Fed, set borrowing rates. So instead expect shenanigans with the Fed’s balance sheet to finance backdoor spending blurring the separation between monetary from fiscal policy. So probably yes to cheap-er money but if so also financial repression too. What that means is Bessent might be able to lower rates somewhat but rates are probably going to stay high. We can be pretty sure rates are not going back down to the levels of the 2010s.

[fastfred]

^^ thanks


so like socialism

[MultiVerse]

Yeah, in the sense not only is there no plan to reduce long-term debt we're going to add trillions of dollars of new debt resulting in a depreciated dollar, lower growth, and higher interests rates compared with the past

[jono]

The point is you can have one or the other, but not both. The reason why it matters is because they require different policy responses

This is excellent news. I think you can trade on that if we do wind up in a low growth, high inflation scenario. Let's say about 9% inflation and 0.2% growth? You can just wait until growth ticks down by 0.3% or more for 2 quarters in a row and go all in betting that inflation will fall 10%. Short TIPS? Maybe something with leverage?

All it takes to make a trillion dollars is confidence and unfailing accuracy. You have at least one of these, please don't let it go to waste! And please remember us maggots with a million or two when you get there. TIA

[MultiVerse]

Not sure if it's smart taking investment advice from a guy who argued just a few months ago not to "fight the Fed" on interest rates falling dramatically. How'd that bet work out? But okay, I'm game, let's say the economy is transitioning from stagnant economic growth and increasing inflation to negative economic growth and decreasing inflation or recession with disinflation. Not much to go on in your toy scenario but since that's all it is, shorting TIPs might work, betting on Long-Term Treasuries (Towards the Peak of Rates), Value Stocks & Dividends (Late Recession, Early Recovery), etc.

Just a bit of economic history, the 1970s decade of stagflation real GDP growth averaged 3.2-percent

[jono]

I don't think you know what I said about fighting the fed, but at any rate the fed hasn't unsuccessfully tried to cut rates yet so nothing has worked out either way. When they decide to lower them and you decide to raise them then please let me know how it goes.

[rod9301]

Not sure if it's smart taking investment advice from a guy who argued just a few months ago not to "fight the Fed" on interest rates falling dramatically. How'd that bet work out? But okay, I'm game, let's say the economy is transitioning from stagnant economic growth and increasing inflation to negative economic growth and decreasing inflation or recession with disinflation. Not much to go on in your toy scenario but since that's all it is, shorting TIPs might work, betting on Long-Term Treasuries (Towards the Peak of Rates), Value Stocks & Dividends (Late Recession, Early Recovery), etc.

Just a bit of economic history, the 1970s decade of stagflation real GDP growth averaged 3.2-percent

Yeah, and very few people made money in the 70s

Sent from my motorola edge 2024 using Tapatalk

[MultiVerse]

And the 1970s required a different policy response, too

I don't think you know what I said about fighting the fed, but at any rate the fed hasn't unsuccessfully tried to cut rates yet so nothing has worked out either way. When they decide to lower them and you decide to raise them then please let me know how it goes.

I already did let you know how it went. And I do know what you said. You said in a discussion about bringing down longer-term borrowing costs via 10-year Treasury yields, "What is it they say about fighting the Fed again? Do it? Don't do it?" I wrote in response, "Treasury and the Fed might be able to make some short-term impact [via yield curve management] but it is mostly contingent on a host of other policy consequences." ... "we're close to the neutral rate given current macro/fiscal conditions so I'm not sure what fighting the Fed means in this environment. They cut 100 basis points last year and long term yields rose."

[jono]

The discussion was forward-looking, as is appropriate for this thread. I figured that went without saying, which was apparently my mistake, since now you're saying you think past events provide proof of what might happen under a different, dramatically less far-sighted regime in the future, right?

"Treasury and the Fed might be able to make some short-term impact [via yield curve management] but it is mostly contingent on a host of other policy consequences."

Apologies, I had forgotten that you agreed about what might happen in the future in the event they decide to act in an ill-advised manner under direction from a guy who makes that his signature move. No idea how you could support any kind of accusation based on this, but I guess now that's your signature move.

[Bunion 2020]

I am getting more and more convinced MV is an AI Bot designed to argue about damn near anything.

[m2711c]

^^^ Fact.

[MultiVerse]

^^^ fiction. And. lol, bunion has what 24,000 posts arguing in Polyass?

The discussion was forward-looking, as is appropriate for this thread.

Apologies, I had forgotten that you agreed about what might happen in the future in the event they decide to act in an ill-advised manner

The discussion was forward looking and your response shows that you still can't comprehend what's happening in debt markets. And it's not so much agreeing as pointing out that yield curve management just isn't a very powerful tool in this environment.