The Long Term Investor

Discussion in 'Investing' started by WXYZ, Oct 2, 2018.

  1. WXYZ

    WXYZ Well-Known Member

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    I have NO IDEA how I ended the week.....although I am pretty sure I was in the red. I will be in Santa Fe for the next couple of days and will not check my account while on "suspect" hotel wifi.....not to mention I dont have my TOKEN with me that is needed to log in to Schwab.

    It has been a long time since we have had a week this negative. Meaningful? NO...not really. It is simply short term market action. AND....some time we will see a NORMAL correction....it happens.

    You know....the world is one big MESS right now. There is a reason that I ONLY invest in AMERICAN companies and this is it. There is absolutely NO REASON for me to add the WOES OF THE WORLD to my investing portfolio.
     
  2. WXYZ

    WXYZ Well-Known Member

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    I like this little article....but....not sure I agree with the tone. I personally consider passive INDEX investing highly positive and the disconnect from the HUMAN BRAIN and EMOTION a very good thing.

    A Longtime Analyst Warns Dumb Index Cash Is ‘Tail Wagging Dog’

    https://finance.yahoo.com/news/longtime-analyst-warns-dumb-index-121500456.html

    (BOLD is my opinion OR what I consider important content)

    "(Bloomberg) -- While academics increasingly argue the passive revolution is a myth, there are plenty of market players who would beg to differ.

    Vince Deluard, the outspoken macro strategist at StoneX Financial Inc., is the latest to warn of mounting evidence that index-tracking cash is messing with the equity market, driving up valuations, disrupting returns and upending the natural order for big stocks.

    He calls it the “passive singularity,” after the concept that artificial intelligence will ultimately be powerful enough to unleash its own exponential growth. To survive, he says traders must embrace it, exploit distortions and seek opportunities in sectors shunned by popular gauges.

    The passive sector is creating the reality it was designed to mirror: the tail is wagging the dog,” he wrote in a note this week. “As the passive share of the market grows, prices are set by the interaction of the passive sector’s mechanistic rules and trading algorithms, rather than the emotions and analyses of biological brains.”

    Deluard, a Ned Davis Research alum who started out with TrimTabs Asset Management in the mid-2000s, identifies at least six symptoms of a market that’s being distorted by passive flows. His point is this: Each can be explained by other factors, but taken together it’s persuasive evidence that the singularity is upon us.

    The six symptoms are:

    Valuations structurally higher and risingCorrections are rare and shorterLarger stocks outperformPrices are disconnected from fundamentalsIndex returns are disconnected from economic indicatorsExecutive compensation has soared


    If he’s correct, a clutch of recent academic research papers arguing the market is as active as ever are missing the wood for the trees. They posit that the design and deployment of index strategies amounts to discretionary investment in all but name. But to Deluard, there are simply too many tell-tale signs that passive power is at work.

    To be clear, Deluard isn’t anti-indexing. He describes it as a “natural evolution” of markets that is powering the current bull run and insists investors must embrace it. “A core allocation to cap-weighted index funds is the simplest way to benefit from this rising tide,” he wrote.

    At the same time index inclusions and exclusions, construction flaws in some funds and options strategies capitalizing on the new volatility regime could all be ways to gain an edge, he argues.

    Meanwhile, anyone who wishes to avoid the passive bubble should look to the stocks ignored by index funds, Deluard said. Old-school energy names and big tobacco companies are among them.

    A lack of buyers is causing a “structural discount in their valuations,” he said -- though investors will need to be patient.

    The ‘index leftover premium’ will be realized over decades, not months,” he wrote."

    MY COMMENT

    YES.....leave it to the market professionals to WISH FOR the markets to be controlled by emotion and the human brain. UNFORTUNATELY for the industry....it is passive INDEX investing.....that is the MAINSTAY of the typical retail investor....the silent majority.
     
  3. WXYZ

    WXYZ Well-Known Member

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    For owners of APPLE.....like myself.

    Apple Loses $85 Billion in Value After App Store Ruling

    https://finance.yahoo.com/news/apple-erases-nearly-85-billion-162332731.html

    (BOLD is my opinion OR what I consider important content)

    "(Bloomberg) -- Apple Inc. shares suffered their steepest selloff in months on Friday after a federal judge ordered the company to change the way it operates its App Store, which would hurt the profitability of that business unit.

    The stock fell 3.3%, its biggest decline since May 4, erasing about $85 billion from the iPhone maker’s market capitalization. The size of the loss is bigger than all but 98 components of the S&P 500 Index.

    A federal judge granted an injunction sought by Epic Games Inc. which would allow developers to steer consumers outside payment methods for mobile apps. It also ordered the game maker to pay damages to Apple for breach of contract.

    Friday’s slump handed Apple its first weekly decline in three weeks. The stock remains up more than 12% so far this year.

    The S&P 500 Index fell 0.8% on Friday. As the largest component of the benchmark index, with a market value above $2.4 trillion, Apple accounted for about a quarter of the benchmark’s decline."

    MY COMMENT

    APPLE and the other BIG TECH companies tend to be DUMB AND BLIND when it comes to this sort of issue. They obviously operate on the theory that they can simply put up with the losses in this sort of case when it happens.....and....the profits will outweigh the once in a while losses. They just take the hit and move on......as do the shareholders.
     
  4. WXYZ

    WXYZ Well-Known Member

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    We CONTINUE to be on track for a cost of living raise for those on Social Security between 6% and 6.5%. The actual amount will be released next month....October.

    Social Security retirement benefits could see big hike in 2022: What to know

    https://www.freep.com/story/money/p...rease-2022-when-to-claim-benefits/5655132001/

    (BOLD is my opinion OR what I consider important content)

    "Predictions that Social Security retirement benefits could be heading for a 6.2% hike in 2022, thanks to a bump in inflation, could lead some baby boomers to figure they've got one less reason to wait to claim benefits.

    After all, those claiming retirement benefits are going to get more money next year. Why not rush to claim at age 62 or 63 now if you're going to get extra dough? Well, experts warn that you might want to rethink that one.

    Social Security retirement benefits are turning into one hot topic as we're hearing more buzz about a future hefty cost of living adjustment next year.

    The cost of living adjustment, known as COLA, was a mere 1.3% in 2021 — raising the average benefit by about $21 for monthly payments and making it one of the lowest increases on record since 1975 when Social Security started automatic annual cost-of-living allowances.

    What's ahead in 2022?
    Next year, we're talking real money.

    Some retirees could be looking at an extra $100 a month, based on an average Social Security retirement monthly payment of $1,655.71 in July.

    We won't know the official cost of living adjustment for 2022 until the Social Security Administration makes that announcement in October. The percentage is determined after the U.S. Bureau of Labor Statistics releases the September Consumer Price Index.

    Any increase due to COLA will show up in checks and direct deposit benefits paid in January.

    Right now, it looks like the cost-of-living adjustment is going to be around 6.2%, according to the Senior Citizens League, a nonpartisan group dedicated to protecting and strengthening Social Security benefits.

    Why the Social Security hike?
    Oddly enough, much of that higher payout can be attributed to a shocking spike in gasoline prices, according to the group.

    Under current law, Social Security benefits are adjusted using the Consumer Price Index for Urban Wage Earners and Clerical Workers. The Senior Citizens League notes that the index reflects the spending patterns of younger working adults who drive a lot, not retirees.

    41.8% in the past 12 months.

    A potential 6% bump is pretty unusual after low inflation. But there have been other years of high COLA increases.

    By comparison, other sizable inflation-adjustments for Social Security included: 5.8% for payments in 2009, 5.4% in 1991, 7.4% in 1982 and 11.2% in 1981. The largest increase was 14.3% in 1980, according to Social Security data.


    Should you jump on the retirement bandwagon?
    If you're thinking about retiring, an estimated 6% COLA hike might tempt you to throw in the towel at work and claim Social Security benefits at 62. But here’s why you don’t want to do that.

    Mary Beth Franklin, a renowned author specializing in unraveling Social Security intricacies, says she has heard some financial planners wonder whether it's a good time to claim benefits now to lock in that eye-catching cost-of-living adjustment.

    And she uncovered something most people don't know.

    Her take is that anyone who is age 62 or older in 2022 and who is eligible for Social Security will profit from next year’s COLA — even if they have not yet filed for benefits.

    “I worry that some people may rush to claim Social Security this year to benefit from the exceptionally large cost-of-living adjustment expected next January," Franklin told me by email.

    "I’m sure most people do not realize that they automatically will benefit from next year’s COLA — even if they have not yet filed for Social Security — as long as they are at least 62 or older in 2022," said Franklin, who wrote "Maximizing Social Security Benefits," an online book that is available for $29.95 at MaximizingSocialSecurityBenefits.com.

    If there are future inflation adjustments, she noted, those who are 62 and older would see inflation adjustments baked into future payments each year until they claim benefits all the way up to when they reach age 70. "

    MY COMMENT

    It is about time. I started Social Security at my normal retirement age about 5-6 years ago. The cost of living increases since then have been MICROSCOPIC. An increase of 6.2% or higher will increase our benefits by at least $2500 per year.

    In addition due to how I manipulated and structured our retirement income and taxes.....starting next year we will be in the LOWEST category of payments for medicare and drug coverage. This year we are in a high payment category. COMBINED this will mean at least another $5000 per year in income for us as a couple.

    This is WELCOME news to us....not that we need the money. I would like to see at least a couple more years of inflation and HIGH cost of living increases.......as the years go by these increases will COMPOUND very nicely and will help to keep us up with and AHEAD of inflation eating away at our retirement income.
     
  5. WXYZ

    WXYZ Well-Known Member

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    NVIDIA....has been on fire lately both before and after the stock split. Looks like those of us that own this stock could be in for some good times going forward.

    Cramer Sees Big Things For Nvidia

    https://finance.yahoo.com/m/16b1fa24-a704-3e3b-a0df-c9c0fa22c615/cramer-sees-big-things-for.html

    (BOLD is my opinion OR what I consider important content)

    Chip maker Nvidia (NVDA) - Get NVIDIA Corporation Report has posted strong earnings and great share prices, but that’s just the beginning.

    Jim Cramer sees even bigger potential for the company as tech companies begin to push the virtual reality platforms known as “omniverse” and “metaverse.”

    Cramer and the Action Alerts Plus team recently noted that Nvidia "Once again reported very strong results with its fiscal second quarter 2022 results."

    "On the top line, record revenue of $6.507 billion (+68% YoY) outpaced the $6.325 billion consensus with Gaming, Data Center and Professional Visualization all seeing record quarterly revenues. On the bottom line, adjusted earnings per share of $1.04 (+89% YoY) exceeded expectations of $1.02 per share."

    "On the margin front, Nvidia's adjusted gross margin came in at 66.7%, representing an expansion of 600 basis points over the prior year (70bps sequentially). This result was also better than the 66.3% consensus forecasts."

    All of this is great news for current investors, but there’s much more to this story.

    "Nvidia specializes in graphics processing. This isn’t its only business, but most of the company’s chips (known as video cards) produce video and gaming results. It particularly made its name in the market for high performance computer games. While all computers need some form of video processor, Nvidia’s most profitable technology has always appealed only to the relatively small segment of the market that wants high fidelity digital universes."

    That market may be about to change thanks to the company's Omniverse offering, a "simulation and collaboration platform that provides the foundation of the metaverse."

    "Over 500 companies are evaluating Omniverse Enterprise ... including BMW and Volvo, and more than 50,000 individual creators have downloaded Omniverse since it entered open beta in December."

    And why is that so important?

    "The bottom line here is that while many companies will be responsible for building out the metaverse, which [CEO Jensen] Huang described as "essentially an overlay of the internet. An overlay of the physical world," Nvidia is positioning itself to be the brick and mortar of this future digital world.""

    MY COMMENT

    Short term the ARM acquisition will be the critical event for the company. It is very much up in the air at this time. BUT....longer term....this is a GREAT business and company. I continue to ride this wave.
     
  6. WXYZ

    WXYZ Well-Known Member

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    OBVIOUSLY....the BIG ONE for investors and the markets over the next month will be......GOVERNMENT. The pending TAX and SPEND bills in congress will have a HUGE impact on the markets between now and the end of the year. There is a LOT OF INSANITY out there in all the various tax increases that are being proposed. I am not going to spend a lot of time talking about this issue....UNTIL....it becomes clear what will and will not pass.

    BUT...keep in mind:

    1. Government does NOT have any money other than what they take away from private workers and business.

    2. Spending by the government is not "investing" in anything CONTRARY to what they like to claim. It is simply SPENDING.
     
    #7506 WXYZ, Sep 11, 2021
    Last edited: Sep 11, 2021
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  7. rg7803

    rg7803 Well-Known Member

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    Exactly. People keep forgetting fundamental things.

    “Let us never forget this fundamental truth. The state has no source of money other than the money people earn themselves. If the state wishes to spend more, it can do so only by borrowing your savings or by taxing you more. There is no such thing as public money, there is only taxpayers’ money.”

    You’re old enough to remember who said that.
     
    WXYZ and Syynik like this.
  8. WXYZ

    WXYZ Well-Known Member

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    EVERY investor must understand that CORRECTIONS are just a part of the NORMAL market process.

    Stocks could be due for a correction of up to 20% 'by fire or ice': Morgan Stanley strategist

    https://finance.yahoo.com/news/stoc...-ice-morgan-stanley-strategist-185927231.html

    (BOLD is my opinion OR what I consider important content)

    "Morgan Stanley’s Chief Investment Officer Mike Wilson says investors should always be positioned for a market correction of 10%, but warned that investors may not be ready for a harsher correction that could be coming soon.

    You should always be expecting a 10% correction. If you’re investing in equities, you should be prepared for that at any time,” Wilson told Yahoo Finance on Friday. “A 20% correction, which is really more disruptive, where people might want to try and position for, the catalyst for that is going to be once again an ice scenario.”

    Wilson’s “ice scenario” envisions a sharp reversal of the post-lockdown “overconsumption binge,” which could slow the stronger earnings and operating leverage seen in S&P 500 companies as of late.

    “It would be natural that the mid-cycle transition ends up being worse than normal,” Wilson said.

    Wilson added that historically, price-to-earnings ratios for the S&P 500 tend to fall by about 20% in a mid-cycle transition, pointing to 1994, 2004, and 2011 as examples. P/E ratios compare a company’s share price against its earnings per share, and have been elevated through the pandemic recovery.

    [​IMG]
    In an August 30 note, Morgan Stanley Research noted that forward 12-month price-to-earnings ratios for the S&P 500 had already fallen by 5% so far this year. Source: Bloomberg, Morgan Stanley Research
    Wilson says the correction may have already begun, with P/E ratios on the S&P 500 falling by about 5% so far this year. Characteristics of previous mid-cycle adjustments, such as the outperformance of large caps as autos and consumer discretionary lag, are already happening.

    We think it has simply been deferred as excess liquidity and retail and international inflows have kept the major U.S. indices elevated,” Morgan Stanley noted in research published Aug. 30.

    The equity strategist said a further slowdown in P/E multiples could come “by fire or ice.” In the “fire” scenario, a booming economy with sustained inflation pushes the Federal Reserve to raise interest rates and take steam out of the stock market.

    The “ice” scenario is the overconsumption binge hypothesis, which Wilson said is the one his team is leaning towards.

    The bottom line for us...is the risk reward is not particularly great at the index level from here, no matter what the outcome is. That’s why we don’t have any upside to the S&P for the rest of the year,” Wilson said.

    Wilson’s team recommended financials and consumer services as defensive plays to a possible correction."

    MY COMMENT

    I ASSUME that this industry insider has already acted on his view and gone to cash for the rest of the year. Why not.......since he believes there is not going to be any gain in the SP500 for the rest of the year. I also assume that Morgan Stanley is advising all their high wealth clients to do the same. NO? Well why not?

    PERSONALLY....I would rather sit with the rest of the....."little people"......out here in flyover country..........and keep my money fully invested for the rest of the year.....and....for the long term. The ODDS that this insider has any sort of insight into the markets that is more than random chance is......ZERO. If I remember I will revisit this little prediction on the SP500 at year end.

    My random guess....would be that we will see a correction before year end......but....that is simply NORMAL market behavior. AND.....as usual....it will set up the next leg of the bull market that is going to be supported for many may months to come by the re-opening.

    As to the.....FIRE AND ICE.......analogy and language.......simply sensationalism.
     
    #7508 WXYZ, Sep 12, 2021
    Last edited: Sep 12, 2021
  9. WXYZ

    WXYZ Well-Known Member

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    Since it is the weekend and more and more baby boomers are hitting age 65.....here is some important info.

    Avoid the 10%-per-year penalty for not enrolling in Medicare — know these rules

    https://www.marketwatch.com/story/a...re-know-these-rules-11631301599?siteid=yhoof2

    (BOLD is my opinion OR what I consider important content)

    "Contrary to what many people believe, not all Americans are automatically enrolled in Medicare at age 65, which means when the calendar flips closer to your 65th birthday, it’s time to pay attention to enrollment rules to avoid hefty, sometimes permanent penalties.

    There are many rules associated with Medicare enrollment, but here are a few of the basics:

    Medicare Part A, which covers hospital insurance, is typically free of premiums for individuals who have worked at least 40 quarters of any job where they paid payroll taxes into Social Security and Medicare. Most people get “premium-free Part A,” but there are some who do not qualify, and they must pay a premium of either $259 or $471 per month in 2021 depending on how long they or their spouse worked or paid into the system, according to Medicare.gov.

    This gets tricky. If someone isn’t eligible for Medicare Part A, and they don’t sign up for it when they first become eligible for the program, their monthly premium could potentially go up 10% and they’ll have to pay the higher premium for twice the number of years they didn’t sign up.

    For example: Someone who did not enroll in Part A for two years after qualifying thereafter would have to pay the premium with a penalty for four years, according to the site.

    Part B, which covers doctor visits, medical supplies and outpatient or preventative services, is structured differently — but the penalty is potentially even more severe.

    Americans must pay premiums for Part B, which in 2021 is $148.50 a month (or more, depending on income). Those who do not enroll in Part B when they first become eligible, and without a qualified reason, could have their premiums increased 10% for every 12-month period they could have had Part B. In other words, someone who doesn’t enroll in Medicare Part B for 36 months after first becoming eligible would have a 30% penalty charge on top of the premium.

    Fast forward to 2021, a 30% penalty is an additional $45 every month for the average participant— but it’s a permanent charge, meaning retirees would pay it every month in addition to their premiums for as long as they had Part B coverage.

    There are times when an individual is allowed to delay Medicare coverage. These special circumstances include when still employed at a job that offers a group health plan or when a spouse is still employed at a job that provides the 65-year-old’s health insurance. Part A and Part B can be delayed, but individuals get an 8-month special enrollment period that begins when they stop working or lose their group health plan coverage (whether they elect COBRA or not).

    The open enrollment period for 2022 Medicare coverage begins Oct. 15, 2021. This is when people will typically adjust their plans. Those who are approaching Medicare eligibility age, however, have their first chance to enroll three months before they turn 65 and they have three months after the month they turn 65 as well. Here’s more from Medicare.gov about those deadlines, and when coverage would start."

    MY COMMENT

    The rules are the rules. There is NO NEED to not sign up for medicare at age 65. It has NOTHING to do with when you are going to start Social Security.
     
  10. WXYZ

    WXYZ Well-Known Member

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    A bit of a preview of tomorrow.
    Retail sales, Consumer Price Index: What to know this week

    https://finance.yahoo.com/news/reta...e-index-what-to-know-this-week-145855567.html

    (BOLD is my opinion OR what I consider important content)

    "Traders this week will be focused on new data on inflation and spending. Each are likely to have moderated last month after initial reopening surges in demand and price increases earlier this year.

    On the inflation front, the Labor Department's August Consumer Price Index (CPI) is set for release on Tuesday. The print is expected to decelerate on both a monthly and annual basis, suggesting the peak growth rates in prices for consumer goods and service may already have passed during this economic recovery.

    Consensus economists expect the broadest measure of CPI will grow 0.4% in August compared to July, and by 5.3% compared to August 2020. In July, the headline CPI grew 0.5% month-on-month and by 5.4% year-on-year, with the latter representing the fastest annual growth rate since 2008.

    Excluding more volatile food and energy prices, the CPI likely grew 0.3% month-on-month in August to match July's pace. However, on a year-over-year basis, the CPI excluding food and energy prices likely ticked down to a 4.2% rate, or a hair below July's 4.3% rate. That had, in turn, moderated from a 4.5% annual rate in June, which had marked the fastest rise since 1991.

    The multi-year highs in consumer price increases so far this year have coincided with the broadening economic recovery, as more Americans became vaccinated and were more inclined to spend. This especially drove up prices in goods and services closely tied to renewed consumer mobility.

    Used car and truck prices, for instances, rose at least 7.3% in each of April, May and June before decelerating sharply to an only 0.2% rise in July — suggesting an initial wave of demand was finally being unwound as consumers reacclimatized to going back out and companies' supply chains began to catch up with demand. Similar trends have been seen in prices for airline tickets, motor vehicle insurance and apparel prices, which pulled back in July after spiking earlier in late spring and early summer.

    Other categories of consumer prices have seen more sustained increases, especially in food and energy prices. Other services-related areas of consumption have also seen sustained rises, with consumers returning to in-person activities like dining out at bars and restaurants and leisure traveling. The CPI's "services less energy services" category has on a monthly basis in every month so far in 2021 except January, mostly recently at a 0.3% clip.

    "Although the rise in global CPI inflation earlier this year was concentrated in energy and a narrow set of goods prices linked to supply constraints, the acceleration in food prices, alongside a recent pickup in services price inflation, sends a signal that pandemic-related pressures on prices are broadening," JPMorgan economists Nora Szentivanyi and Bruce Kasman wrote in a note last week.

    "While we believe much of this pressure will prove transitory, inflation should remain elevated through early next year, as rising food and services price inflation offsets a moderation in energy and core goods price gains," they added.

    The CPI also serves as another metric pointing to the relative stickiness or transience of inflationary pressures in the recovering economy. Its outsized increases earlier this year — along with increases in the Federal Reserve's preferred inflationary gauge, core personal consumption expenditures — have suggested to some economists that the central bank might be prudent to alter its monetary policies to stave off a sustained overheating of the economy.

    Federal Reserve policymakers, however, have largely stuck to the conviction that inflation will prove transitory in this economy. Central bank officials like Fed Chair Jerome Powell further suggested that a premature policy move could actually backfire by cutting short the recovery in the labor market.

    "The spike in inflation is so far largely the product of a relatively narrow group of goods and services that have been directly affected by the pandemic and the reopening of the economy," Powell said during his speech at the central bank's Jackson Hole symposium in late August.

    "Some prices — for example, for hotel rooms and airplane tickets — declined sharply during the recession and have now moved back up close to pre-pandemic levels," he said. "The 12-month window we use in computing inflation now captures the rebound in prices but not the initial decline, temporarily elevating reported inflation. These effects, which are adding a few tenths to measured inflation, should wash out over time."

    Retail sales
    Another closely watched economic data report out this week will be Thursday's retail sales print from the U.S. Commerce Department.

    Consumer spending has retreated in recent months as a boost from stimulus checks and other government support faded compared to earlier this year. In July, retail sales fell by a worse-than-expected 1.1%, which was more than three times greater than the drop expected.

    The August retail sales report will capture more of the impact on spending from the latest jump in coronavirus cases, with infections related to the Delta variant's spread having picked up mid-summer. Consensus economists expect to see sales fall for a back-to-back month, dropping by 0.8% for the month.

    Some service-related spending already slowed in July, suggesting consumers were already going out somewhat less frequently as infections mounted. Food services and drinking places sales increase by 1.7% in July, following a 2.4% monthly gain in June.

    The August retail sales report, however, will not capture any impact on spending related to the national expiration of enhanced unemployment benefits. Throughout the summer, about half of U.S. states had ended pandemic-era federal jobless benefits to try and incentivize unemployed individuals to return to work. The other half of states ended these benefits by Sept. 6.

    Future retail sales reports for September and onward may reflect slowing sales as a result of the expiration of this aid, some economists suggested.

    "Spending by the unemployed, especially low-income households, has been supported by enhanced unemployment benefits," Rubeela Farooqi, chief economist at High Frequency Economics, wrote in a note. "Absent this support, spending outcomes will surely be different, especially if households are less secure about job prospects going forward.""

    "Economic calendar
    • Monday: Monthly budget statement, August (-$302.1 billion during prior month)

    • Tuesday: NFIB Small Business Optimism, August (99.7 during prior month); Real Average Weekly Earnings, year-over-year, August (-0.9% during prior month); Consumer Price Index, month-over-month, August (0.4% expected, 0.5% in July); Consumer Price Index excluding food and energy, month-over-month, August (0.3% expected, 0.3% in July); Consumer Price Index, year-over-year, August (5.3% expected, 5.4% in July); Consumer Price Index excluding food and energy, year-over-year (August (4.2% expected, 4.3% in August)

    • Wednesday: MBA Mortgage Applications, week ended September 10 (-1.9% during prior week); Empire Manufacturing, September (20.0 expected, 18.3 during prior month); Import Price Index, month-over-month, August (0.3% expected, 0.3% in July); Industrial Production, month-over-month, August (0.6% expected, 0.9% in July); Capacity Utilization, August (76.4% in August, 76.1% in July); Manufacturing Production, August (0.4% expected, 1.4% in July)

    • Thursday: Retail Sales Advance, month-over-month, August (-0.8% expected, -1.1% in July); Retail Sales excluding autos and gas, August (-0.5% expected, -0.7% in July); Initial jobless claims, week ended September 11; Continuing Claims, week ended September 4; Philadelphia Fed Business Outlook Index, September (20.0 expected, 19.4 in August); Business inventories, July (0.5% expected, 0.8% in June); Total Net TIC Flows, July ($31.5 billion in June); Total Long-term TIC Flows, July ($110.9 billion in June)

    • Friday: University of Michigan Sentiment, September preliminary (72.7 expected, 70.3 in August)"
    "Earnings calendar
    • Monday: Oracle (ORCL) after market close

    • Tuesday: Lennar (LEN), FuelCell Energy (FCEL) before market open

    • Wednesday: Weber (WEBR) before market open

    • Thursday: No notable reports scheduled for release

    • Friday: No notable reports scheduled for release"
    MY COMMENT

    YES.....much of the inflation this year is PROVING to be transitory. As noted above many product and service categories are showing price drops. It is likely that this will prove to be the NORM as we move forward.

    Retail sales....yes the lapse of the FREE MONEY is going to have an impact. Another step in the NORMALIZATION of the economy that is going to slowly happen over the next 12-24 months.

    Consider all the HIGHLY FEAR MONGERED TOPICS of the past six months......out of control rising interest rates....out of control inflation.......earnings going to be FLAT......the pandemic....etc, etc, etc. NONE of them have ended up the way it was predicted. It is a TOTAL waste of time for longer term investors to OBSESS over this stuff....which tends to NEVER happen as predicted.
     
  11. zukodany

    zukodany Well-Known Member

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    So let me get this straight… the economy is recovering… rates are down… inflation is low…jobs are coming back… and some analysts predict that things are too good and therefore we’re due to a correction and THEN everything collapses?
    Like.. based on NOTHING? Just a feeling?
    Can they predict that everything will be fine then instead please?
     
    WXYZ likes this.
  12. oldmanram

    oldmanram Active Member

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    Zukodany, I hear you, but that doesn't sell , "Nothing to see hear, everything is great"
    You have to be dramatic , and fear mongering to be in print or on the little screen.
    I also wanted to express condolences on the flooding, hopefully all will get cleaned up, and back to
    normal soon.

    My account can't figure out which way is up today,
    Every 30 minutes it's either up nothing or down nothing

    which is better than Friday , it only knew how to go DOWN
    Down 2% last week
     
    #7512 oldmanram, Sep 13, 2021
    Last edited: Sep 13, 2021
    WXYZ and zukodany like this.
  13. zukodany

    zukodany Well-Known Member

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    Thanks Ram we’re there now tearing the floor down in the basement. This will likely take 2-3 weeks to repair back to normal. FEMA is NOT helping out, our insurance is not covering this either. This is one of those things you always prepared for just in case everyone is incompetent. Well the tax write off is gonna be tremendous this year it seems
     
  14. WXYZ

    WXYZ Well-Known Member

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    Good to see you back and posting Zukodany......what a disaster.......so sorry. One of my kids had their house flood a couple of years ago.....so I understand what you are going through.

    WELL....I should be back in a couple of days and be able to check my account. I REFUSE to do any sort of log in to my accounts on a smart phone. At least we seem to have BROKEN the back....of the market negativity today. A nice market today.....but....mixed with the NSADAQ down a bit.

    I had 6 of 10 holdings in the green today.....but without checking dont know if I ended up in the green for the day or not. My RED holdings today were......AMAZON, COSTCO, NIKE, and NVIDIA.
     
  15. WXYZ

    WXYZ Well-Known Member

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    YEP.....the wall street LEMMINGS are all jumping on the "correction" bandwagon. No one wants to be left holding the bag in the event of a correction......so....it is safer to join the crowd in predicting a down end to the year.


    Suddenly everyone thinks the stock market is going to plunge

    https://finance.yahoo.com/news/sudd...-going-to-plunge-morning-brief-091030650.html

    (BOLD is my opinion OR what I consider important content)

    "But that doesn't mean you should sell
    The calls for a stock market correction are beginning to blow through the streets of Wall and Broad.

    We aren't talking about the reiteration of a decade-long Nouriel "Dr. Doom" Roubini type call for a stock market crash due to the always easy excessive valuation and bloated government debt arguments (the S&P 500 is up 506% since March 1, 2009). Instead, we are referencing stock market correction calls of at least 10% by some of the brightest minds on Wall Street, whose work I really respect.

    You should always be expecting a 10% correction. If you’re investing in equities, you should be prepared for that at any time,” Morgan Stanley's Chief Investment Officer Mike Wilson told Yahoo Finance Live. “The bottom line for us... is the risk reward is not particularly great at the index level from here, no matter what the outcome is. That’s why we don’t have any upside to the S&P for the rest of the year.”

    Roger that.

    Deutsche Bank strategist Binky Chadha also recently cautioned on the chance for a near-term correction in markets. Bank of America's Savita Subramanian has also issued a warning on the market of her own. I would even read Ark Invest's Cathie Wood recent selling of Tesla's stock as a red flag on high multiple stocks.

    The question investors need to be asking is straightforward. Should you give a hoot about these calls from top Wall Street minds? I fancy the answer is yes, for a few reasons.

    For one, peek under the hood of the market and you will see evidence of a rolling correction (as Wilson likes to refer to it as) that could soon bubble up to the headline-grabbing major indices. About 90% of Russell 2000 stocks have already fallen into a correction, as Bloomberg notes. Morgan Stanley's work reveals that the average stock in the S&P 500 is down 10% from its 52-week high. Outflows from cyclical stocks since June 15 have tallied $15 billion, according to a recent Jefferies note.

    These are indications of shifting sentiment in markets, and it's shifting with good reason.

    Within a week, household name companies such as Sherwin-Williams, United Airlines, Delta Air Lines, Southwest Airlines and PPG Industries all issued third quarter earnings warnings due to the impact of the Delta variant (among other factors). And MGM Resorts told investors last week cancellations are picking up. More of this negative commentary lurks as companies present at investment banks this month.

    So in other words, the fundamentals that have underpinned the market's rally up until September have changed for the worse. Don't let the hardcore bulls tell you otherwise, the proof is in the pudding (large companies' warnings).

    Meanwhile, all of this unfolds just as super accommodative Federal Reserve policy — a big driver of the stock rally during the pandemic — is poised to abate by year-end. Wilson told me investors need to be cautious on FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks ahead of Fed tapering, which sure makes a lot of sense since these stocks go down with the broader market, given their size and importance.

    All of this isn't to say you move to all cash and bitcoin and take refuge in a backyard underground bunker. But it may be time to take some profits on winning positions and wait for more opportune entry points. There is nothing wrong with banking winnings.

    According to recent trading updates, Ark Invest's Wood has been selling shares of Tesla in her Ark Innovation, Ark Next Generation Internet and Ark Autonomous Tech & Robotics ETFs. The 180,000 shares sold by Wood amount to $139 million, per Bloomberg. Tesla's stock is up 21% in the past three months, hence it's not a shock to see Wood selling a bit of her most high-profile position. Wood recently told Yahoo Finance Live that she sees fair value for Tesla at $3,000 a share (Tesla shares are currently trading at $736), so I wouldn't expect her to completely exit the name that put her on the map anytime soon (if at all). Wood continues to view Tesla as years ahead of others in the globally expanding EV market.

    So don't call me a fear monger on Twitter, I'm not trying to sell you anything here.

    Here's one company I am watching this week:

    Chevron: With ESG-focused activist investor Engine No. 1 reportedly kicking the tires on Chevron (CVX) after scoring a major win against the fat cats at Exxon earlier this year, Chevron executives will look to keep their cushy gigs by holding an environment-centric presentation on Tuesday. The event titled "Energy Transition Spotlight," will outline how Chevron "will plan to lower carbon intensity in our operations and grow lower carbon businesses."

    No doubt Chevron CEO Mike Wirth (who joined in 1982 straight out of the University of Colorado, per his LinkedIn profile) enters the event with a few stains on his CEO report card. First, Chevron shares are down 18% since it announced Wirth as CEO on Sept. 28, 2017. No, he can't hang his hat on Chevron's stock outperforming oil rivals Exxon and BP during that span (both are down more than 30%). Chevron stock is still down, while the S&P 500 is up 77%. Also, Chevron took a $10 billion asset write-down in late 2019 due to weak gas prices. Seeing as Wirth is a Chevron lifer, he deserves to shoulder some responsibility for being part of a team putting those assets into the ground.

    And lastly, where was Chevron's ESG focus before. Nowhere. So hopefully for Wirth's sake, Tuesday's presentation resonates with investors and ESG activists like Engine No. 1. Because if it doesn't, Chevron could find itself on the losing end of an Exxon-like battle as Engine No. 1 is riding high post-Exxon and eyeing targets. That potential battle may be good for the planet, but probably not for Wirth who still holds the chairman position. Despite the stock's nosedive he pulled in $29 million in total compensation in 2020. Engine No. 1 did not respond to a request for comment."

    MY COMMENT

    Should you...as a long term investor give a hoot.....I fancy that the answer is a RESOUNDING NO. I will continue to RIDE my winners for as long as possible......and......will NOT even consider abandoning them in the event of a correction. What companies am I going to find to invest that money in compared to the WORLD BUSINESS LEADERS that I have now?

    Do I care about a rolling correction among some of the many stocks that make up the totality of the markets......NO. In fact....it is normal for the majority of stocks to be suffering at any time in history. In addition the FACT that the wall street "professionals" are now jumping on this bandwagon probably makes the chance of a correction LESS than normal now......considering that these people are UNIFORMLY WRONG.
     
  16. WXYZ

    WXYZ Well-Known Member

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    YES.....we did have a good day today.......and....I suspect that we are going to have a very good week this week.

    Dow, S&P 500 snap 5-session skid Monday as blue-chip index books best day in about 5 weeks

    https://finance.yahoo.com/m/bf5988c7-ef40-3674-a28f-abd7b3fd487b/dow-s-p-500-snap-5-session.html

    (BOLD is my opinion OR what I consider important content)

    "The Dow Jones Industrial Average booked its first positive close in six sessions Monday, and its best day of gains since Aug. 5, after posting its worst weekly drop in nearly three months."

    Stock market news live updates: Dow gains 250+ points, or 0.8%, to end 5-session losing streak

    https://finance.yahoo.com/news/stock-market-news-live-updates-september-13-2021-115039142.html

    "Stocks ended mixed on Monday, with the S&P 500 and Dow rising to end five-session losing streaks while the Nasdaq ended narrowly in the red.

    The Dow added more than 250 points, or 0.6%, as of market close. Tech heavyweight Apple (AAPL) shook off losses from Friday, which came after a California judge issued a permanent injunction against the iPhone-maker's App Store policies amid an antitrust lawsuit with Epic Games. Investors also awaited a highly anticipated Apple event on Tuesday, which is expected to serve as the forum for the unveiling of a new iPhone and other hardware.

    Equity investors also digested heightened regulatory scrutiny in China after the Financial Times reported that Beijing was aiming to break up financial technology company Alipay and separate its lucrative lending business. Shares of Chinese technology giants including Alibaba (BABA) — which owns a stake in Ant Group — and Tencent (TCEHY) dropped before paring some losses.

    Traders this week are set to closely eye new data on U.S. inflation and consumer spending. The former will be monitored to signal whether upward price pressures during the recovery have extended further, and whether the Federal Reserve may need to step in sooner rather than later to stave off a lasting jump in inflation. Consensus economists expect Tuesday's consumer price index (CPI) to rise by 5.3% in August over last year, pulling back from July's more than decade-high annual rise of 5.4%.

    "Global supply problems could put some further upward pressure on inflation in the near term, but the increase in inflation experienced in the immediate wake of the COVID crisis is close to peaking and we expect headline inflation to fall back in every major advanced economy in 2022," Capital Economics economist Jack Allen-Reynolds wrote in a note Monday morning.

    "However, a combination of large amounts of fiscal and monetary support, and a longer-lasting drop in the labor force, means that core inflation in the U.S. will remain well above target in 2022," he added.

    The new data on August retail sales out from the Commerce Department later this week will also offer a look at how consumer spending has held up amid concerns over the Delta variant and rising prices. Overall retail sales are expected to drop by 0.8% in August in Thursday's report, extending July's 1.1% decline.

    "This is such an unusual economy right now: Highly policy-driven [between] fiscal policy, monetary policy, social policy," Robert Dye, Comerica Bank Chief Economist, told Yahoo Finance. "And at the same time, we're trying to reflate this economy. We're hobbled and throttled back by the global supply chain constraints— so a very, very unusual set of circumstances right now."

    "It looks like we're going to get yet another shot of long-term fiscal coming from the spending program that's going to be voted on here in a couple of weeks. But in the meantime, we've got to get through COVID," he added. "We've got to get the consumer back on its feet. We've got to give them some product to buy to get those consumption numbers up ... The global supply chain needs to be freed up so we can get the inventory cycle going again— so highly unusual conditions right now." "

    12:15 p.m. ET: Consumer inflation expectations reached record high: NY Fed
    Consumers' inflation expectations raced higher in August as more Americans took note of broad-based price and wage increases during the economic recovery, according to a new survey from the New York Federal Reserve.

    One-year inflation expectations rose for a 10th straight month to reach a record high of 5.2% in August, according to the NY Fed's monthly Survey of Consumer Expectations. Over the next three years, the median respondent expected inflation to reach 4.0%, with this level rising by 0.3 percentage points from the July survey and also reaching a record high.

    11:35 a.m. ET: Demand for income 'is going to be the hallmark of this investment decade': Strategist
    Demand for investment returns has helped keep traders piling into stocks even after the S&P 500's rapid run-up so far this year. That outsized demand is likely to remain a driving force for risk assets, according to at least one strategist.

    "The markets are in good shape," Rick Rieder, BlackRock global fixed income chief investment officer, told Yahoo Finance Live. "The demand for income, the demand for return — I've been doing this for 35 years, I've never seen the extraordinary amount of demand there is."

    "I do think the Fed is over-enhancing the amount of liquidity in the system. But it's so much bigger than that," he added. "We're going through a demographic evolution, and a need for income ... the demand for income is going to be something that is going to be the hallmark of this investment decade without question."

    Rieder also suggested stocks are not overvalued — even as they hover near record levels — especially when compared to Treasury bonds.

    "You look at what revenue growth is, you look at these companies [that] are building book equity at 20%, 25%, 30% per annum," he added. "And you think about that and think, 'Gosh, the intrinsic value of my stock is going up 20%, 25% per annum, whereas the 10-year note yields 1% with real rates at negative 1%.' It just puts into perspective the paradox between value in the fixed income market and the equity market today where I don't think equities are high by any measure."

    MY COMMENT

    The.....very little....mini correction that we had last week was nothing more then CUMULATIVE FEAR and exhaustion on the part of investors. ACTUALLY......I should say "traders".......not investors. Most investors just sat.....as usual.....and did nothing. I STRONGLY AGREE with the comment above on "demand for income" by the BlackRock strategist above.
     
    #7516 WXYZ, Sep 13, 2021
    Last edited: Sep 13, 2021
  17. emmett kelly

    emmett kelly Well-Known Member

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    here's your dlo, zuc.

    12 Information Technology Stocks Moving In Tuesday's Intraday Session
    12:34 pm ET September 14, 2021 (Benzinga) Print



    Gainers

    • Communications Systems (NASDAQ:JCS) stock increased by 31.22% to $8.91 during Tuesday's regular session. Trading volume for this security as of 12:30 EST is 10.0 million, which is 41809.6% of its average full-day volume over the last 100 days. The company's market cap stands at $86.5 million.
    • DatChat (NASDAQ:DATS) shares increased by 13.6% to $7.43. The market value of their outstanding shares is at $120.9 million.
    • Research Frontiers (NASDAQ:REFR) shares rose 9.0% to $2.42. Trading volume for Research Frontiers's stock is 359.8K as of 12:30 EST. This is 148.38% of its average full-day volume over the last 100 days. The market value of their outstanding shares is at $76.5 million.
    • SeaChange International (NASDAQ:SEAC) shares moved upwards by 7.27% to $1.17. SeaChange International's stock is trading at a volume of 3.3 million shares as of 12:30 EST. This is 252.99% of its average full-day volume over the last 100 days. The market value of their outstanding shares is at $56.6 million. As per the news, the Q2 earnings report came out yesterday.
    • DLocal (NASDAQ:DLO) stock increased by 6.01% to $64.64. As of 12:30 EST, DLocal's stock is trading at a volume of 1.1 million, which is 100.78% of its average full-day volume over the last 100 days. The market value of their outstanding shares is at $18.9 billion.
    • Net 1 UEPS Technologies (NASDAQ:UEPS) shares increased by 5.63% to $4.69. As of 12:30 EST, this security is trading at a volume of 263.5K shares, making up 143.5% of its average full-day volume over the last 100 days. The market value of their outstanding shares is at $265.2 million. As per the news, the Q4 earnings report came out yesterday.
     
  18. WXYZ

    WXYZ Well-Known Member

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    As usual good news is bad and bad news is good.

    GLOBAL MARKETS-Global markets fall after data shows U.S. inflation cooling

    https://finance.yahoo.com/news/global-markets-global-markets-fall-211102974.html

    (BOLD is my opinion OR what I consider important content)

    "NEW YORK, Sept 14 (Reuters) - Global equity markets and U.S. bond yields fell on Tuesday after data showed inflation cooling in the Unites States, raising fresh questions on when the U.S. central bank will begin tapering its asset purchases.

    MSCI's world stocks benchmark fell 0.33%, and all 11 major sectors in the S&P 500 ended the session lower, with energy and financials falling the most.

    European shares closed 0.1% lower, dragged down by mining, banks and luxury stocks, which followed Asian luxury stocks in falling on a new spike in COVID-19 cases in Fujian, China.

    The yield on the benchmark 10-year note fell more than 6 basis points on the day to a low of 1.263%, the lowest reading since Aug. 24.

    The U.S. Labor Department said its Consumer Price Index (CPI) was up just 0.1% last month, compared with an expected increase of 0.3%. That was the smallest gain in six months, and it indicated that inflation has probably peaked.

    While that aligns with Federal Reserve Chair Jerome Powell's long-held belief that high inflation is transitory, economists and market watchers remain concerned by ongoing supply constraints and labor costs that could continue for months.

    "Today's CPI data came in a bit weaker than expected, but (the Producer Price Index) is at a record high and inflation continues to be a key challenge for investors,” said David Petrosinelli, Senior Trader at InspereX.

    "These trends are indicating labor costs will continue to rise, which could make inflation stickier over the long-term."

    The Fed will meet next week. The August CPI data lifts some of the pressure the Fed faced to announce it would begin tapering its massive bond-buying program.

    Further delaying this key Fed announcement is "distorting" the economy and throwing off markets, said BlackRock's Chief Investment Officer of Global Fixed Income Rick Rieder.

    "Continuing to stimulate demand higher increases the risk of a severe supply/demand mismatch across economic as well as financial assets," said Rieder, also the head of BlackRock’s global allocation team.

    The Dow Jones Industrial Average fell 292.06 points, or 0.84%, the S&P 500 lost 25.68 points, or 0.57%, and the Nasdaq Composite dropped 67.82 points, or 0.45%.

    The prospect of a corporate tax hike in the United States from 21% to 26.5% as part of a $3.5 trillion budget bill is also front and center for investors.

    Investment bank Goldman Sachs Group Inc estimates that if Democrats succeed in raising the corporate tax rate increase to 25% and get half of the hike proposed in foreign income tax rates, it could shave 5% off S&P500 earnings in 2022.

    In Asia, China's tightening grip on its technology companies again kept investors on edge after authorities told tech giants to stop blocking each other's links on their sites.

    MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.43%.

    The dollar index fell 0.03 points or 0.03%, to 92.645.

    The euro was flat against the dollar at $1.1807.

    Oil prices ended largely unchanged as Tropical Storm Nicholas brought heavy rain and power outages in Texas but caused less damage to U.S. energy infrastructure than Hurricane Ida caused earlier this month.

    Brent crude settled up 90 cents, or 0.1%, at $73.60 a barrel. U.S. crude ended 10 cents higher at $70.46 per barrel.

    Spot gold prices rose $12.7509, or 0.7%, to $1,806.24 an ounce."

    MY COMMENT

    So the ten year yield and rates are DOWN.....good news.......but not for the markets. Inflation comes in significantly below what is expected.....good news.....but not for the markets.

    I will say once again as I have for months.......YES....there is NO inflation. the latest data above and the ten year yields shows that as over the past 11 years.....it is DEFLATION.....that will continue to be the issue.

    There is ONE reason the markets were down today......and....all the professionals are jumping on the correction wagon......the potential government TAX INCREASES. For the past year it was KNOWN that this would happen with the current government. Yet....business, banks, everyone in the business.....said....no big deal. NOW......when it is about to happen suddenly they ALL freak out. TYPICAL.

    AND.....yes......the economy it TOTALLY DISTORTED at the moment. The level of tax increases that we get and their impact on corporations and small business......WILL.....determine the depth of the HIT on the economy while it remains very DISTORTED.
     
  19. WXYZ

    WXYZ Well-Known Member

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    On the topic of government action and deflation.

    'Quantitative Easing' Isn't Stimulus, and Never Has Been

    https://www.realclearmarkets.com/ar..._isnt_stimulus_and_never_has_been_794329.html

    (BOLD is my opinion OR what I consider important content)

    "Upside down and backwards! Nearly 13 years since the Fed launched “quantitative easing” (aka “QE”), it is still misunderstood, both upside down and backwards. One major camp believes it is inflation rocket fuel. The other deems it essential for economic growth—how could the Fed even consider tapering its asset purchases amid Delta variant surges and slowing employment growth, they shriek! But both groups’ fears hinge on a fatal fallacy: presuming QE is stimulus. It isn’t, never has been and, in reality, is anti-stimulus. Don’t fear tapering—welcome it.

    Banking’s core business is sooooooo simple: taking in short-term deposits to finance long-term loans. The spread between short- and long-term interest rates approximates new loans’ gross profit margins (effectively cost versus revenue). Bigger spreads mean bigger loan profits—so banks more eagerly lend more.

    Overwhelmingly, people think central banks “print money” under QE. Wrong. Very wrong. Super wrong! Under QE, central banks create non-circulating “reserves” they use to buy bonds banks own. This extra demand boosts bond prices relative to what they would be otherwise. Prices and yields move inversely, so long-term interest rates fall.

    Fed Chair Jerome Powell and the two preceding him wrongheadedly label QE stimulus, thinking lower rates spur borrowing—pure demand-side thinking. Few pundits question it, amazingly. But economics hinges on demand … and supply. Central bankers almost completely forget the latter—which is much more powerful in monetary matters. These “bankers” ignore banking’s core business! When short-term rates are pinned near zero, lowering long rates shrinks spreads (“flattening” the infamous yield curve). Lending grows less profitable. So guess what banks do? They lend less! Increase demand all you want—if banks lack incentive to actually dish out new loans, it means zilch. Stimulus? In any developed world, central bank-based system, so-called “money creation” stems from the total banking system increasing net outstanding loans. QE motivates exactly the opposite.

    Doubt it? Consider recent history. The Fed deployed three huge QE rounds after 2008’s financial crisis. Lending and official money supply growth shriveled. In the five pre-2008 US expansions, loan growth averaged 8.2% y/y. But from the Fed’s first long-term Treasury purchases in March 2009 to December 2013’s initial taper, loan growth averaged just 0.8% y/y. After tapering nixed the nonsense, it accelerated, averaging 5.8% until COVID lockdowns truncated the expansion. While broad money supply measures are flawed, it is telling that US official quantity of money grew at the slowest clip of any expansion in history during QE.

    Now? After a brief pop tied to COVID aid, US lending has declined in 12 of the last 14 months. In July it was 4.7% above February 2020’s pre-pandemic level—far from gangbusters growth over a 17-month span.

    Inflation? As I noted in June, it comes from too much money chasing too few goods and services worldwide. By discouraging lending, QE creates less money and decreases inflation pressure. You read that right: QE is disinflationary. Always has been. Wherever it has been tried and applied inflation has been fried. Like Japan for close to …ah…ah…ah….forever. Demand-side-obsessed “experts” can’t see that. But you can! Witness US prices’ measly 1.6% y/y average growth last expansion. Weak lending equals weak real money growth and low inflation—simple! The higher rates we have seen in recent months are all about distortions from lockdowns and reopenings—temporary.

    The 2008 – 2009 recession was credit-related, so it was at least conceivable some kind of central bank action might—maybe kinda sorta—actually help. Maybe! But 2020? There was zero logic behind the Fed and other central banks using QE to combat COVID. How would lowering long rates stoke demand when lockdowns halted commerce?

    It didn’t. So fearing QE’s wind-down makes absolutely no sense. Tapering, other things equal, would lift long-term rates relative to short rates—juicing loans’ profitability. Banks would lend more. Growth would accelerate. Stocks would zoom! Almost always when central banks try to get clever they wield a cleaver relative to what they desire. A lack of FED action is what would otherwis be called normalcy.

    Fine, but might a QE cutback still trigger a psychological freak-out, roiling markets? Maybe—briefly. Short-term volatility is always possible, for any or no reason. But it wouldn’t last. Tapering is among the most watched financial stories—has been for months. Pundits over-worry about it for you. Their fretting largely pre-prices QE’s end, so you need not sweat it. This is why Powell’s late-August Jackson Hole commentary—as clear a statement that tapering is near as Fed heads can make—didn’t stoke market swings. The ECB’s September 9 “don’t call it a taper” taper similarly did little. Remember: Surprises move markets materially. Neither fundamentals nor sentiment suggest tapering is bear market fuel.

    Not buying it? Look, again, at history. The entrenched mythological mindset paints 2013’s “Taper Tantrum” as a game-changer for markets. Untrue! After then-Fed Chairman Ben Bernanke first hinted at tapering back in May 2013, long-term Treasury bond prices did sink—10-year yields jumped from 1.94% to 3.04% by that yearend. But for US stocks, the “tantrum” amounted to a -5.6% decline from May 21 through late June—insignificant volatility. After that, stocks shined. By yearend, the S&P 500 was up 12.2% from pre-taper-talk levels. Stocks kept rising in 2014 after tapering began. 10-year yields slid back to 2.17%. My sense is even tapering’s teensy impact then is smaller this time because, whether people consciously acknowledge it or not, we all saw this movie before.

    Taper terror may well worsen ahead of each coming Fed meeting until tapering actually arrives. Any disappointing economic data will spark cries of “too soon!” Tune them down. History and simple logic show QE fears lack the power to sway stocks for long."

    MY COMMENT

    The impact of tapering and ending all QE will be....INSIGNIFICANT.....for investors that have a horizon of more than a month or two. It is MORE important to get a ll this STUFF that is distorting the economy and markets and banking out of the way as soon as possible. At that point we will be back to.....normal....markets and on the path to a normal economy.

    The longer we continue this ridiculous "stuff" and pile some hefty tax increases on top of it.....the more likely we are to end up like Japan....stuck in a deflationary economy for the next 20-30 years.
     
  20. WXYZ

    WXYZ Well-Known Member

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    I will be home tomorrow so no checking my account for me today. I have NO DOUBT that I was in the red today.

    I saw a little article earlier today saying that the increasing number of professionals that are predicting a correction indicates that one may be coming soon. NO......corrections are NOT caused by some "opinion poll" of investment professionals. These people have NO ability to predict or call anything. BUT....if regular investors start to believe all the fear mongering......it can become a self fulfilling prophesy. The good news.....those sorts of corrections tend to be very short term....perhaps 2-3 weeks and than the markets simply move on. In my mind.....a drop of 10% or more....a correction by definition.......that ONLY lasts for a week or two or three.....is NOT a correction. It is simply a meaningless short term market drop.
     

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