I agree that it is right to question all the assumptions. I just get a kick out of those who poo poo the people who have to make decisions about what causes will lead to which effects, when it's all guesswork.
I fully agree that some of what is going on is fairly unprecedented. But then we've been through unprecedented changes several times in my lifetime. The stock valuation approach I was taught at UConn hasn't been valid for 30 years. It's all vastly different. The macro differences are huge. China wasn't an economic power not that long ago either, those changes and the internet were bigger than whatever adjustment is happening now. In some ways, the supply chain correction was long overdue. Covid exposed a vulnerability that needed to be addressed anyway.
That's because they're constrained by policy makers.
I would argue Economic Theory almost always works long term. Supply and demand, expected inflationary result from money supply expansion (too many dollars chasing too few goods), two negative quarters being recessionary, etc). Often when government intervenes it may change the timing of achieving equilibrium but not the ultimate results the theory expected. When I told people to be careful investing in the recent pages in this thread, the caution was all based on economic theory that has existed for many decades and recent corporate activity that one would expect to respond to these trends driven by that that theory.
Who said anything about prices? The Fed buying bonds has always been about liquidity. Prices are mostly a function of interest rates.
This. Thank you. Debt, deficits, budgets, policy, regulation, how and why we spend the money are all functions of Congress. The Fed just does the best they can with the limited tools it has.
If you want to tamp down the economy, you can also do things like end the Step Up in Basis. That right there will reduce the deficit, take money out of circulation, and people will keep their jobs. But there is little will to do that in Congress.
OK, yield then.
I’ve been buying in my kids’ UTMA accounts here and there. They can’t touch it for 10+ years so I have a nice long runway for Apple, NVDA, Amazon and others.
Politics is always first.
It's bad. Wish I had more real estate. But that's also bad. My booze may be the only thing that's up.
fb.watch
About time for a correction. The market has gone almost straight up since 2009. In bought the TZA at (which shorts the Russell) 15 quite a while ago and plan on holding it for the foreseeable future.
