Stock Market Meltdown Megathread

[Jake Broe Stan]

“My big worry — and you know this — is if the Fed focuses on 2% in a relatively rapid time frame, we will end up in recession,” El-Erian said. “There is no reason for the US economy to fall into recession. The endogenous elements of this economy are strong enough to power through this period. The big risk is that we follow the wrong inflation target and end up tipping this economy into recession.”

Surveillance: El-Erian Says Fed Inflation Target Should Be Closer to 3%

‘Excessive data dependence’ leaves open the risk of economic damage, he says

www.bloomberg.com

 

[Jake Broe Stan]

Some people need to understand that they love Keynesian economics even if they claim otherwise.

There's also a significant monetary side to this. Paul Krugman argued last year that the 1981-82 recession was "deliberately created by the Fed to bring down inflation":

The Fed raised interest rates sky-high, causing a plunge in home construction, which was the main driver of the slump. When Paul Volcker believed that we had suffered enough, he cut rates, housing sprang back—and it was housing that mainly drove the recovery. Reaganomics was basically irrelevant.

But let's get back to the fiscal stuff. James K. Galbraith contended in 2009 that closet Keynesianism continued into the 21st-century, well after the theory was supposedly abandoned and discredited:

The political instinct remains to react to recessions with a "stimulus package." Under Republican presidents, at least until this year, this policy was usually called "supply-side economics"—Reagan was a great practitioner of it, as was George W. Bush in 2001–04. This is short-term Keynesianism in disguise, always accompanied by professions of budget piety and promises that "fiscal responsibility" will return as soon as normal conditions are restored. But it is Keynesianism nonetheless. It is government intervention to support total spending, and especially the use of public spending power, in the military or elsewhere, to bring the economy out of a ditch.

https://www.usnews.com/opinion/blogs/scott-galupo/2011/11/01/ronald-reagan-practiced-keynesian-economics-successfully

 

[MalO]

Cronyism



History repeats itself. I can't wait to repeat the French Revolution.

 

[Jake Broe Stan]

Inflation continues to cool!

Stocks climb for 3rd straight day after Fed’s preferred inflation gauge eases to 2-year low — MarketWatch

U.S. stocks traded higher on Friday, on track to rise for a third straight day after an inflation gauge favored by the Federal Reserve showed price pressures easing to their slowest pace in two years, a welcome sign for the market at the close of what has been a difficult September.

stocks.apple.com

 

[Jake Broe Stan]

GDP for Q3 continues at 4.9%!

GDPNow

Provides a

www.atlantafed.org

 

[Jake Broe Stan]

Economic growth has been MUCH stronger than anyone anticipated thanks to Bidenomics!

 

[Jake Broe Stan]

One could easily make the case that this is the best economy of our lifetimes. Slava America!

Stocks fall Friday as Treasury yields climb following strong jobs report — CNBC

Stocks fell Friday as Treasury yields jumped following the release of stronger-than-expected U.S. jobs data.

stocks.apple.com

 

[Jake Broe Stan]

Why September’s Jobs Report Means Fed May Hold Rates Steady
https://www.barrons.com/articles/jobs-report-friday-september-485e556e?st=ufyeuyaofy12dsy

“Aside from the payrolls figures…this employment report was indicative of a labor market that is coming into better balance,” wrote Paul Ashworth, chief North America economist with Capital Economics. “With wage growth and price inflation rapidly fading and the rise in long yields triggering a significant tightening in financial conditions, we still think the Fed is done hiking.”

 

[Jake Broe Stan]

Some big US bond investors say Fed hikes have peaked despite sticky inflation

Some large U.S. bond investors said on Wednesday they believe the Federal Reserve has reached a peak in its interest rate hiking campaign, despite inflation heating up in August on the back of surging energy prices.

www.reuters.com

 

[Jake Broe Stan]

 

[Jake Broe Stan]

The producer price index rose 0.5% for September, coming out higher than the Dow Jones estimate for a 0.3% rise. While slightly higher than what economists' expected, the September figure still represented a slowing from the 0.7% producer prices increase in the prior month.


The 10-year Treasury yield remained lower even after the hotter-than-expected inflation data, losing more than 6 basis points to 4.58%. The 2-year yield, meanwhile, moved higher by less than 1 basis point to 4.993.


A day earlier, the benchmark U.S. yield fell, giving stocks a boost. The 30-stock Dow had gained 0.4% on Tuesday, while the S&P 500 added 0.52% and the tech-heavy Nasdaq Composite jumped 0.58%.


"If rates continue to move lower, I think that will be the primary driver of a reasonable rebound in the equity market," Lauren Goodwin, director of portfolio strategy at New York Life Investments, said on CNBC's "Closing Bell" on Tuesday.


"It's also about supply and demand dynamics," she added. "These past couple of days, we've had a little bit of relief from Fed narratives and also a little bit of risk mitigating type of buying. But Treasury supply is still overwhelming, we expect it to remain that way."

S&P 500 closes higher for a fourth day as traders prepare for consumer inflation data — CNBC

Stocks inched higher Wednesday as traders awaited the release of new U.S. consumer inflation numbers.

stocks.apple.com

 

[MalO]

Well I was wrong. I was certain the stock market would collapse in 2023 and it didn't.

So now I'm pro stock market.

The United States stock market is titanic. Absolutely bulletproof and invulnerable. Not even God can stop the mighty rise of our stock market. If all of the angels stood before it, the stock market would bulldoze them all down into their graves.

Nothing can sink this ship. Nothing.

New York’s office block apocalypse is underway – you can’t give them away

Emergency lending by the US federal authorities has bathed America’s struggling regional banks in short-term liquidity, disguising the slow-burn damage of the US commercial property slump.

finance.yahoo.com

“It’s not a liquidity problem; it’s a solvency problem,” said Professor Tomasz Piskorski, a banking specialist at Columbia University, and one of the lead authors. “Temporary measures have calmed the market but half of all US banks are running short of deposits with assets worth less than their liabilities, and we are talking about $9 trillion,” he said.

“They are bleeding capital and could not survive if something triggers a sudden loss of confidence. It is a very fragile situation and the Federal Reserve is watching it closely”.

The Fed’s pre-Christmas “pivot” in monetary policy – along with a 100 point drop in 10-year US Treasury yields – mitigates the stress but comes too late, and is too tentative, to avert mounting insolvencies.

Property developers must refinance their debts into the most hostile lending market in living memory, while falling rents and soaring insurance costs are eroding their revenue streams. Almost $1.5 trillion comes due by the end of next year.

“The entire commercial real estate space has to be reset. No one really knows where the values are,” said Scott Rechler, chairman of Long Island developer RXR and a board member of the New York Fed.

Mr Rechler expects 500 to 1,000 banks to disappear in a wave of consolidation. They have faced a relentless leakage of deposits to money market funds paying higher interest, compounding their property woes.

First start by buying up all the bank stocks. The stock market is invulnerable so this will definitely pay off.

 

[MalO]

The secret to staying rich is when the time comes to pay your debts, you just don't. This is good for the rich man because it lets them keep all their money and since the poor man can't do anything about it, it works.

 

[MalO]

Still holding.

I wish our stock market had some kind of law enforcement agency.

I saw a thread yesterday calling for the abolishment of the SEC. All the reasons they gave were stupid. I think it was written by an anarchist. The only reason the SEC should be abolished is because they aren't doing their fucking job.

 

[MalO]

There is 1 stock owned by retail investors

 

[Timothy]

Anybody buying TSLA today?

 

[hmt5000]

I'm pretty happy with my netflix pickup. I'm afraid on Comcast stock but got dayum I see upside. I really want to pull the trigger. It's a long haul buy in my eyes but I feel like in 2 years it could be at $65 and be paying a decent dividend.

 

[MalO]

Everything is fine. Our economy is stronger than ever.

 

[MalO]

Years ago Ken Griffin tried to blame redditors for destroying pension funds when Melvin Capital collapsed. All the redditors did was buy stock in a game company. It's the hedge funds who are destroying pensions with short-selling, dark pools, and market manipulation.

But his lie revealed the plan.

 

[MalO]

Whenever I predict something it never happens. So I predict the market will be stronger than ever in 2024.