To continue on the post by Rayak above. I have seen some times of inflation and other economic situations in my lifetime. What is different now is the fact that the FED is just out there on a limb by itself.......while the government is gleefully sawing off the limb. Government is making absolutely ZERO effort to try to help with the inflation. In fact they are spending TRILLIONS of dollars for everything you can imagine. We just passed a 3/4 TRILLION green bill.....plus......about half TRILLION in student loan forgiveness. We are also continuing to allow student loan people to not pay their loans. We are MASSIVELY pumping money into the economy during a recession and time when inflation is being fought. In the past when we had this sort of issue....government would work with and act with the FED to try to fix the problem. Now......they think they can just turn it over to the FED......and.....continue spending and stimulating the economy like a drunken sailor. They just claim....."dont blame us, we turned this over to the FED to fix".....we had nothing to do with it. I have NEVER seen this sort of disconnect in my lifetime. Simply INSANITY......they do not care.
Is it any wonder that the BIG BANKS and other sophisticated traders are driving the markets down with their strategies for trading. The REALITY is that their computer trading systems are NOT simply trading the conditions.....they are CREATING the market conditions with the fact that they ALL tend to act in concert. I saw the other day that SHORT bets on the markets right now are at a multi-year high.......by the professionals. The ONLY way for any average retail investor to deal with....what I would call manipulation on a massive scale (just my personal opinion)......is to be very long term and focus on NOTHING but earnings and fundamentals.
The student loan BS is a perfect example. We hear year after year from the media about the big crisis in student loan debt. So the government acts. BUT.......you never hear that all the big SCARE STORIES are false. About 60% of all student loan holders owe $20,000 or less. This is NOT massive debt with the long repayment time periods and low rates that apply to much of student debt. Many of remaining large loans are Physicians, dentists, attorneys, other professionals, PHD's, etc, etc.....with huge earning ability. We sit back and allow the media and government to create and define a problem......and than we mindlessly let them solve the problem. "Solve" being a WORTHLESS WORD in this context......since the solution invariable means throwing money out there and rewarding various groups.
Not a big story....but an iconic figure. He was the RUSSIAN leader that started the process.....after being beat down by Regan's policies......to FREE Europe and Russia. Unfortunately Russia's people simply threw the opportunity away and put themselves right back where they were to start with. At least most of the rest of Europe was able to escape and stay free. Mikhail Gorbachev, Soviet leader who helped end the Cold War, has died https://www.cnbc.com/2022/08/30/mik...ed-the-cold-war-dies-aged-91-report-says.html NOW....as you can see from this little story.....the whole of the Regan/Gorbachev accomplishments and events......are mostly forgotten and disregarded. NOPE.....nothing to see here.
The inflation deal was already a mounting issue, as many pointed out even back a year or so ago. The FED is way too late to the game. We all know they are not going to be able to pull back on this anytime soon. The die has been cast so to speak. Yet, we keep injecting money all over the place as other posters have already said. This inflation is going to be a bitty for the foreseeable future. Prices in my area for goods just keep ticking up. Generally, people are still going about their business, but the tipping point will come at some point...there just isn't anyway to sustain it. Also, when we factor in other global issues and there are a plethora of those at the moment. Energy crises throughout Europe, the Russia/Ukraine war, China/Taiwan issue, China "zero policy" lockdowns, and the list could just go on. We have and will feel the effects of any of those things should they get worse or if any of those issues were to somehow ease or be resolved to an extent. All of these things add uncertainty, volatility, and speculation on what may or may not happen. I do not like the look or feel to any of the above. Had we not manufactured our own crises here with an over exorbitant amount of stimulus, lockdowns, and two years of no fiscal responsibility to the future....we would be in a much better position to weather some of the other issues. Yet, here we are.
Speaking of things in Europe....here is a story on Poland...unfortunately these folks are in for a very rough time and its not just there. In the US we have been spoiled for so long that we ignore or overlook what "hard and difficult" times are. We may get a lesson in it someday. Tell these folks energy independence doesn't matter. WARSAW/BOGDANKA, Aug 27 (Reuters) - In Poland's late summer heat, dozens of cars and trucks line up at the Lubelski Wegiel Bogdanka coal mine, as householders fearful of winter shortages wait for days and nights to stock up on heating fuel in queues reminiscent of communist times. Artur, 57, a pensioner, drove up from Swidnik, some 30 km (18 miles) from the mine in eastern Poland on Tuesday, hoping to buy several tonnes of coal for himself and his family. "Toilets were put up today, but there's no running water," he said, after three nights of sleeping in his small red hatchback in a crawling queue of trucks, tractors towing trailers and private cars. "This is beyond imagination, people are sleeping in their cars. I remember the communist times but it didn't cross my mind that we could return to something even worse." Artur's household is one of the 3.8 million in Poland that rely on coal for heating and now face shortages and price hikes, after Poland and the European Union imposed an embargo on Russian coal following Moscow's invasion of Ukraine in February. Poland banned purchases with an immediate effect in April, while the bloc mandated fading them out by August. While Poland produces over 50 million tonnes from its own mines every year, imported coal, much of it from Russia, is a household staple because of competitive prices and the fact that Russian coal is sold in lumps more suitable for home use. Soaring demand has forced Bogdanka and other state-controlled mines to ration sales or offer the fuel to individual buyers via online platforms, in limited amounts. Artur, who did not want to give his full name, said he had collected paperwork from his extended family in the hope of picking up all their fuel allocations at once. The mine planned to sell fuel for some 250 households on Friday and would continue sales over the weekend to cut waiting times, Dorota Choma, a spokeswoman for the Bogdanka mine told Reuters. The limits are in place to prevent hoarding and profiteering, or even selling spots in the queue, Choma said. Like all Polish coal mines, Bogdanka typically sells most of the coal it produces to power plants. Last year, it sold less than 1% of its output to individual clients so lacks the logistics to sell fuel directly to retail buyers. Lukasz Horbacz, head of the Polish Coal Merchant Chamber of Commerce, said the decline in Russian imports began in January when Moscow started using rail tracks for military transport. "But the main reason for the shortages is the embargo that went into immediate effect. It turned the market upside down," he told Reuters. A spokesman for the Weglokoks, a state-owned coal trader tasked by the government to boost imports from other countries declined to comment, while the climate ministry was not available for comment. Government officials have repeatedly said Poland would have enough fuel to meet demand. In recent years, Poland has been the most vocal critic of EU climate policy and a staunch defender of coal that generates as much as 80% of its electricity. But coal output has steadily declined as the cost of mining at deeper levels increases. Coal consumption has held mostly steady, prompting a gradual rise in imports. In 2021, Poland imported 12 million tonnes of coal, of which 8 million tonnes came from Russia and used by households and small heating plants. In July, Poland ordered two state-controlled companies to import several million tons of the fuel from other sources including Indonesia, Colombia and Africa, and introduced subsidies for homeowners facing a doubling or tripling of coal prices from last winter. "As much as 60% of those that use coal for heating may be affected by energy poverty," Horbacz said. Back at Bogdanka, Piotr Maciejewski, 61, a local farmer who joined the queue on Tuesday, said he was prepared for a long wait. "My tractor stays in line, I'm going home to get some sleep," he said.
Yes......us regular people.....see what is going on. BUT...nothing we can do. So....we have one option.....stretch out the investing horizon. At least we have a generally green open today....for the moment. We DESERVE a green day today.
Poor labor and jobs markets and data. It is all over the place. I dont know if you can trust any of it......but....it is probably worse than we think. Private payrolls grew by just 132,000 in August, ADP says in reworked jobs report https://www.cnbc.com/2022/08/31/adp-jobs-report-private-payrolls-grew-by-just-132000-in-august.html (BOLD is my opinion OR what I consider important content) "Key Points Private payrolls grew by just 132,000 for the month, a deceleration from the 268,000 gain in July, ADP said in its monthly payroll report. August’s numbers add to the inflation worries, as the firm reported annual pay up 7.6% for the month. Companies sharply slowed the pace of hiring in August amid growing fears of an economic slowdown, according to payroll processing company ADP. Private payrolls grew by just 132,000 for the month, a deceleration from the 268,000 gain in July, the firm said in its monthly payroll report. The Dow Jones estimate for the ADP count was 300,000. “Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy’s conflicting signals,” said ADP’s chief economist, Nela Richardson. “We could be at an inflection point, from super-charged job gains to something more normal.” August payroll numbers are notoriously volatile. ADP’s release also comes at an uncertain time for a U.S. economy which saw negative growth for the first half of 2022 amid the highest inflation the nation has seen since the early 1980s. The more closely watched nonfarm payrolls report from the Bureau of Labor Statistics comes out Friday and is expected to show an increase of 318,000. The ADP report had been on public hiatus through the latter part of the summer as the firm adjusted methodology and entered into a partnership with the Stanford Digital Economy Lab. While much of the changes are technical in nature, ADP’s count differs in how it accounts for issues such as weather and natural disasters. The company also differs from the BLS in that ADP’s count includes any employees active in the company, while the BLS measures only those who have been paid that month. Richardson told media members that the revised approach “captures a new evolution in how we are viewing data at ADP. This is an independent estimate of private sector employment that leverages the full scale and breadth of ADP microdata based on the clients that we work with every single day.” In addition to the changes in the way the jobs total is counted, ADP now is providing wage information. August’s numbers add to the inflation worries, as the firm reported annual pay up 7.6% for the month. From a sector standpoint, services-related industries accounted for most of the jobs, with 110,000 added positions. Leisure and hospitality grew by 96,000 while seeing pay increases of 12.1%. Trade, transportation and utilities contributed 54,000. However, several sectors saw decreases. They included financial activities (-20,000), education and health services (-15,000), and professional and business services (-14,000). On the goods-producing side, construction added 21,000 and natural resources and mining saw a 2,000 gain. Manufacturing was flat. From a business-size perspective, companies with 500 or more employees grew by 54,000. Medium-sized businesses added 53,000, while those with fewer than 50 employees saw a 25,000 gain." MY COMMENT Hiring is collapsing......very quickly. Most of the 11MILLION plus jobs that are supposedly out there are minimum wage and will never be filled. I am not even sure they even exist. BUT.....this data is suspect since they did a major change in how the data is calculated. So in comparison to prior data......it is meaningless.
HERE.....is a real free market capitalism killer. McDonald’s U.S. head says California fast-food bill unfairly targets big chains https://www.cnbc.com/2022/08/31/mcd...t-food-bill-unfairly-targets-big-chains-.html (BOLD is my opinion OR what I consider important content) "Key Points McDonald’s U.S. President Joe Erlinger said the bill unfairly targets big chains. Proponents of the legislation say it will help solve industry problems like unsafe working conditions and wage theft. Nearly 10% of McDonald’s U.S. restaurants are located in California, according to Citi Research. U.S. on Wednesday publicly criticized a landmark California bill that would give the state more control over pay for fast-food workers, saying it unfairly targets big chains. The remarks by Joe Erlinger, president of McDonald’s U.S., come after the California state Senate earlier this week passed a bill that would give a 10-person council the authority to raise the industry’s minimum wage to up to $22 an hour for chains with more than 100 locations nationally. California’s current wage floor is $15.50 an hour. The council would also have the authority to establish safety conditions. Proponents of the bill say it will empower fast-food workers and help solve industry problems such as unsafe working conditions and wage theft, which can include not paying for employees for overtime. But the FAST Act faces strong opposition from the restaurant industry, which fears the impact on California restaurants and the example it sets for other states. “It imposes higher costs on one type of restaurant, while sparing another. That’s true even if those two restaurants have the same revenues and the same number of employees,” Erlinger wrote in a letter posted to the company’s site Wednesday. For example, Erlinger said a McDonald’s franchisee with two locations would subject to the bill, since it’s part of a large national chain. But he said the owner of 20 restaurants that aren’t part of a chain would be exempt. “Aggressive wage increases are not bad ... But if it’s essential to increase restaurant workers’ wages and protect their welfare – and it is – shouldn’t all restaurant workers benefit?” Erlinger wrote. It’s rare for McDonald’s to speak out publicly against state legislation, although the chain was reportedly pushing its franchisees to lobby against the California bill. Nearly 10% of McDonald’s U.S. restaurants are located in California, according to Citi Research. McDonald’s only operates about 5% of its more than 13,000 U.S. locations. Its franchisees operate the rest, but the chain often lobbies on their behalf. In 2019, McDonald’s told the National Restaurant Association it would no longer oppose federal, state or local minimum-wage hikes. Other restaurant companies have been fighting the bill as well. State records show that Chipotle Mexican Grill , Chick-fil-A, Yum Brands and Restaurant Brands International are among the chains that have been spending money to lobby California lawmakers to oppose the legislation. The National Restaurant Association, an industry group, has also spent at least $140,000 to fight the bill, according to California records. The organization’s president Michelle Korsmo said in a statement that 45% of California restaurant operators report that business conditions are worse today than they were three months ago. “The FAST Act isn’t going to achieve its objective of providing a better environment for the workforce, it’s going to force the outcomes our communities don’t want to see,” she said. A stricter version of the FAST Act that would make franchisors like McDonald’s liable for their franchisees’ labor violations passed California State Assembly. But the number of changes made to the Senate version mean the bill will have be re-voted on in the assembly or reconciled before it can make its way to Gov. Gavin Newsom’s desk. Newsom hasn’t indicated whether he’ll sign or veto the bill, although his Department of Finance opposed the initial version of the bill." MY COMMENT Hopefully this fails. This is nothing more than government taking control of private business. If this happens and becomes law it will be the begining of the end of free market capitalism. It will be the transition of business being under the complete control of government and a means for government to do social engineering. (assuming that we are not already there) Way back in 1999.....I decided to simply retire from being a successful business owner. In my state considering all the local and federal taxes and fees......government in many forms.....was taking over 50% of my gross business income. I was still very successful......but......I decided that with the assets that I had.....I was no longer was willing to risk my personal assets year after year to run a business, when government was taking half or more of my gross business income. SO.....I helped my long time employees find new jobs, paid each a one year bonus, sold my building, ........and......told my silent partner, government........"F" you.
Here is something that has been mentioned...but is explained a bit further in this article (Wall St Journal) about recent volatility with markets... The Options Market Is Accentuating the Swings in Stocks As stocks rallied over the summer and sank in recent days, a common force exacerbated the moves: the options market. Federal Reserve Chairman Jerome Powell spooked investors Friday when he vowed the central bank would keep fighting inflation, even at the expense of economic growth. The S&P 500 suffered its biggest one-day loss in more than two months. The market’s summer rally, however, began fizzling a week earlier, coinciding with the Aug. 19 expiration of more than $2 trillion in options. Strategists say that left the market vulnerable to a spike in volatility—one that could feed upon itself if options market dynamics take hold. “Options are primarily an insurance market,” said Cem Karsan, founder and senior managing partner of Kai Volatility Advisors. “But insurance providers do not like to take directional risk; when they sell stock to stay ‘neutral’ to the market, it can create a circular effect.” “The days around options expiration are when markets are most vulnerable to macroeconomic events; they can be a tinderbox,” he added. Since this month’s options expiry, the S&P 500 has declined in five of seven sessions, falling 5.8%, and the Cboe Volatility Index, known as the VIX or Wall Street’s fear gauge, has jumped to 26.13 from 19.56. The VIX—which measures volatility based on options prices tied to the S&P 500—spent much of the summer hovering below 20, a level typically signaling calm. During the stock market’s summer rebound, a nearly $1 trillion positive shift in options market flows quelled volatility and buoyed stocks, according to estimates from Charlie McElligott, managing director of cross-asset macro strategy at Nomura. That helped spur an estimated $110 billion in buying from quantitative hedge funds that follow specific volatility-targeting or trend-following rules, he said. The S&P 500 rose 17% between June 17—the date of the June expiry when $3.4 trillion in options expired—and the corresponding date in August. Options are derivatives that give investors the right, not obligation, to buy or sell underlying securities. Importantly, Wall Street banks on the other side of those trades are forced to hedge their positions. If options dealers are hedging against protection they have sold, that can exacerbate market swings. If dealers are mostly hedging the options bought from investors, then activity will go against the prevailing market trend and damp volatility. Options trading has surged in popularity in recent years, with many individual and institutional investors jumping into the market. Volumes are on track to smash another record this year, with more than 40 million contracts changing hands on an average day in 2022, according to the Options Clearing Corporation. The boom in activity has led many traders to closely track monthly options expiration dates, which they say can stoke greater volatility across markets as dealers’ positioning rapidly adjusts to changing options values in the days leading up to, and after, the date. Quarterly dates tend to have an even larger impact given the surge in options activity tied to them. Investors are eyeing Friday’s monthly jobs report and the next inflation reading, due Sept. 13, as the market’s next catalysts after Mr. Powell reasserted that economic data will set the central bank’s path on interest rates. “If we get a positive surprise on inflation or jobs data, and the market gets a clearer picture on the path of interest rates, then markets can rapidly bounce higher,” said Brent Kochuba, founder of data firm SpotGamma, which tracks derivatives positioning. “But there is nothing in options markets to prevent another tailspin, at least until the September expiry.” Rules-based hedge-fund strategies are also partly responsible for the summer rally, though that could change as volatility returns. “The equity market became a victim of its own momentum over the past few months as CTAs [commodity trading advisers] and other price insensitive buyers drove valuations to unrealistic levels,” Mike Wilson, chief U.S. equity strategist at Morgan Stanley, wrote in a Monday research note. Trend-following strategies upped their equity exposures from historically low levels during the recovery, according to Jon Caplis, chief executive of hedge fund research and intelligence firm PivotalPath. However, these funds could return to shorting the market in size if volatility continues picking up, especially due to the leverage, or borrowed money, they take on to boost returns. “Commodity trading advisers are significantly levered, so they punch above their weight,” Mr. Caplis said. “It is a $250 billion industry that could easily represent over $1 trillion in position sizing.” Kai Volatility’s Mr. Karsan agrees the combined pressure of options-hedging flows and quantitative hedge fund activity has the power to move markets substantially. “Roughly $75 billion in flows determine where the stock market moves each day,” said Mr. Karsan. “That is just 0.15% of the total U.S. stock market. During the summer or holiday months it can be less than $50 billion. Daily flows can have an outsized impact on the market, especially in the summer months.”
Here we are at the 11:00 hour on the East coast and the markets that count.....SP500 and NASDAQ are still green. The gains have lessened....but we are still hanging in there.
Just looked at my account today. We are now distinctly RED in the markets. My account is no exception. At least I have ONE stock up at the moment.....Google. It tells you something when you see the cream of the crop of the BIG CAP world......leading the markets down.......in spite of good earnings so far this year, compared to general expectations. What we are seeing today looks like a typical LOW VOLUME market day to me.
A quick little.....local.....real estate update. In my little local area of 4200 homes we have seen a good decline in listings that are active. We are now down to 50 from a high of about 67 a month or so ago. Lowest priced home is $600,000......highest priced home is $8MILLION. Houses in the upper price range are definately taking longer to sell. I suspect we are back to a market where it takes 1-2 months to sell a home if it is priced properly. obviously many selllers are choosing to just not list in the current market. From my local real estate show on Saturday morning I know that we are now at a market where we have about 2 months of inventory at current sales rates. Still a.....technical....sellers market due to low inventory.......but......with school starting and the Fall just around the corner.....the markets seem DULL at the moment. I dont see much in the way of price reductions.
LOL.....looks like the markets petered out in the last hour or two today. I ended up with about the same loss as the past couple of days in terms of dollars. I am stuck in a rut. I was RED today again......every position again. I got beat by the SP500 by 0.22%. The last three days have all been moderate/medium losses. The markets are just drifting. this is all just part of the process that markets go through. There is no magic solution or answer. It just is what it is........so I accept it and wait. Very Zen.
I believe that after the big shock to the markets last week on Monday and Friday.......it just takes time for the markets to normalize. That is where we are right now. the traders are mostly lined up on the SHORT side of the markets......the rest of us investors are siting and waiting. So......the markets just drift lower.
Here is the media take on today.......as we move forward to a new month........and.....Labor Day on Monday next week when all the professionals come back from vacation and the low August volumes get back to normal. Stock market news live updates: Stocks extend Fed sell-off into fourth day https://finance.yahoo.com/news/stock-market-news-live-updates-august-31-2022-115024905.html (BOLD is my opinion OR what I consider important content) "U.S. stocks tumbled in a turbulent session Wednesday as fears of combative Federal Reserve policy to rein in inflation continued to weigh on sentiment. The S&P 500 sank 0.8%, while the Dow Jones Industrial Average tumbled 280 points, or about 0.9%. The tech-heavy Nasdaq Composite fell 0.6%. A volatile run for stocks in recent weeks has erased much of the summer’s relief rally, with the S&P 500 officially wiping out half of its bounce since mid-June. Shares of Bed Bath & Beyond (BBBY) tanked 21% on Wednesday after the home-goods retailer revealed in an anticipated strategic update that it would lay off staff and shutter approximately 150 stores as part of a turnaround effort for its struggling business. The company also said it secured more than $500 million of new financing. The announcement came shortly after Bed Bath & Beyond reported in a regulatory filing that it may offer, issue and sell shares of its common stock from time to time and use any proceeds from potential stock sales to repay short-term debt, among other purposes. Elsewhere in markets, social media giant Snap (SNAP) was in the spotlight after confirming reports the company will lay off 20% of its workforce of more than 6,400 employees and discontinue or reduce investment in certain projects as part of a broader restructuring effort. Shares rose nearly 9% on Wednesday. “The scale of these changes vary from team to team, depending upon the level of prioritization and investment needed to execute against our strategic priorities," CEO Evan Spiegel said in a statement. "The extent of this reduction should substantially reduce the risk of ever having to do this again, while balancing our desire to invest in our long term future and reaccelerate our revenue growth." Chewy (CHWY) shares plunged nearly 8% after the pet retailer reported second-quarter sales that missed Wall Street estimates and trimmed its full-year guidance, citing the impact of inflationary pressures on purchases of pet items. Shares of Hong Kong-listed electric-vehicle maker BYD (BYDDY) fell roughly 4% after Warren Buffett’s Berkshire Hathaway trimmed its stake in the Chinese company. The move came one month after reports Berkshire was set to exit its entire holding in the electric carmaker sent the stock tumbling. According to a filing Tuesday, the investor slashed its position in BYD’s Hong Kong-listed shares to 19.92% from 20.04% on Aug. 24 – about 1.33 million securities at an average HK$277.10 ($35.30) apiece, valued at about $47 million. In energy markets, West Texas Intermediate crude oil plummeted 2.9% to $89.02 per barrel, while Brent crude oil futures slid about 2.9% to $96.53 per barrel. Tumbling oil prices come "as traders assess the darkening clouds over the global economy and the expectation of weaker demand," Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said in a Wednesday morning note. On the economic data front, ADP reported under new methodology on Wednesday that private payrolls rose by 132,000 in August, a hefty miss from the 300,000 gain economists surveyed by Bloomberg had anticipated. ADP resumed its private payrolls report after a temporary pause in June and July to revamp how data for the release is aggregated. ADP's monthly private jobs report comes two days before the Labor Department releases its official employment data. The government's jobs report due out at 8:30 a.m. ET Friday morning is expected to show nonfarm payrolls rose by 300,000 in August, according to data from Bloomberg." MY COMMENT Well based on the above the markets today were one big nothingburger. A few minor earnings misses. That is a nifty phrase......"fears of a combative Federal Reserve policy".........no, not really. The policy of the FED is the same as they have been saying for months. You would have to be a real MORON.......to not see where the FED is headed and what they are going to do. In addition.....who in the world, except the shortest time span trader......is out there trying predict and time the actions of the FED. A LOSERS game.
Lets CELEBRATE......in terms of the markets it is now SEPTEMBER. Another month out of the way as we move forward toward year end. The SP500 is now at (-17%) year to date. I am probably between about (-21%) and (-22%)......I have not calculated this, I am just estimating. The article above mentions that the SP500 has now lost about half the gains that built up since June 16. I have lost LESS than half my gains over that time and STILL have a big cushion........before I am back to the prior lows. PLUS.......LOL......I remain fully invested for the long term as usual.
I am sure this little GEM had something to do with the markets today. Fed’s Mester sees benchmark rate above 4% and no cuts at least through 2023 https://www.cnbc.com/2022/08/31/fed...ercent-and-no-cuts-at-least-through-2023.html MY COMMENT I heard an old stock market guy the other day talking about the FED.......how they can not just keep their mouth shut. He thought they were talking way too much. We are now such an ego-eccentric and narcissistic society that the FED members can not shut up. Anytime someone gives them a podium and a microphone they just have to talk. They love to see their photos and quotes in the news. After all they are CELEBRITIES.
