Stock market tips and experiences

[Chick Webb]

Originally Posted by ASAP

stagflation fellas- i called it- worst case scenario

Wait just a gol-darned second there. I called it last July, in this very thread:

https://g05.bimmerpost.com/forums/sh...postcount=7975

I don't get no respect!

[ASAP]

Originally Posted by Chick Webb

Wait just a gol-darned second there. I called it last July, in this very thread:

https://g05.bimmerpost.com/forums/sh...postcount=7975

I don't get no respect!

note - my response which agreed based on consumer debt

[dradernh]

Through circumstance and careful planning, we made our way through the remarkable stagflation of the 70s in very good shape. Mostly, we made sure we didn't spend a single dollar unless it was absolutely clear it needed to be spent. Think: we shopped Walmart before it was Walmart. Imagine that in 2024 America.

And yes, we failed to buy Walmart stock when it cost virtually zero in today's dollars. This despite living just down the road from Walmart HQ and clearly recognizing the remarkable value the company was offering to shoppers. I don't know, perhaps it was that we didn't have a nickel to spare for buying stock. Looking back today, I suspect that must've been it.

Nevertheless, both of us, after spending our working lives working for wages (i.e., not owning our own businesses or being self-employed), retired from gainful employment, respectively, in 1994 and 1997.

The moral of this and every other story is how many of them there are out here in the real world!

[RockCrusher]

Originally Posted by dmatre

And obviously we don’t have improper care, misdiagnosis or botched medical procedures here, otherwise malpractice insurance rates would be sky h……. hmmmm

Those exist here, unfortunately. But they occur much less. My visiting of various US newspaper web sites I seldom -- can't remember the last time -- encounter any stories of this sort.

But the Sun, Daily Mail, and Mirror (UK papers) run stories detailing NHS shortcomings almost every day and too often the outcome is someone who could have been treated and made healthy was not properly treated to the point of being subjected to malpractice.

Malpractice insurance rates are high not because of the number of cases but because the settlements are very high. And in some cases, too many cases, the verdict by the jury is not justice but just rewarding the plaintiff with a windfall...'cause it is only insurance money after all.

[Donatello.]

Originally Posted by ASAP

they changed the link

https://www.cnbc.com/2024/04/25/gdp-...cent-rate.html

cliff notes - we are screwed

Regular Joe is always screwed regardless.

[Chick Webb]

Originally Posted by RockCrusher

Those exist here, unfortunately. But they occur much less. My visiting of various US newspaper web sites I seldom -- can't remember the last time -- encounter any stories of this sort.

But the Sun, Daily Mail, and Mirror (UK papers) run stories detailing NHS shortcomings almost every day and too often the outcome is someone who could have been treated and made healthy was not properly treated to the point of being subjected to malpractice.

Malpractice insurance rates are high not because of the number of cases but because the settlements are very high. And in some cases, too many cases, the verdict by the jury is not justice but just rewarding the plaintiff with a windfall...'cause it is only insurance money after all.

As a proper back-bencher would say, "Hear, hear!"

[TTM0TION]

[ASAP]

where chassis at lmao?

https://www.cnbc.com/2024/05/03/jobs...-in-april.html

[chassis]

MSM no bueno.

[Chick Webb]

Wed, 5/1/24

Jay Powell - “I don’t see the stag, or the ’flation”

Fri, 5/3/24

The Stag

- Payrolls up 175k, and only 5k in leisure & hospitality, February + March revised down
- Unemployment up to 3.9%
- Manufacturing PMI slips to 49.2 (< 50 is recessionary)
- Much anecdotal evidence of hiring slowing dramatically, consumer behavior eroding and debt exploding, etc.

The 'flation

- Wage growth +3.9% y-o-y
- CPI +3.5%
- Core PCE +2.8% y-o-y, but 0.3% (x12 = 3.6%) m-o-m
- Owner's equivalent rent up >6%
- Crude oil prices hovering ~$80/bbl

Frankly, Jay's sounding a bit like "Mr Transitory" again to me. Could the Fed once again be a day late and a dollar short to the table? And, what will be the effects of "higher for longer"? CRE implosion? Third-world country's going under from the stronger dollar? Annihilation of the consumer here in The States? All of the above?

[dradernh]

Whatever happens, I'm committed to continue partying like it's 1985. And I remain eternally grateful that I'm in a position to do so.

[XutvJet]

So how long is this market sustainable and what is going to be the first this to break? Profits continue to go up as companies charge more for less, fast food is no longer cheap, food in general is crazy expensive, auto dealers have overflowing lots now, housing remains thin and over-priced, etc. People bitch about current interest rates being too high but the reality is consumers and companies got way to is use to cheap rates for nearly two decades. The current rates are consistent with those back in the earlier 2000s.

I think the market collapse will start with the automotive industry. Dealers and automakers got too comfy with making tons of money following COVID. Then there's the EVs nobody wants now, the cost of vehicles in general, "high" rates, etc. I think what will kick the whole thing off will be payment delinquency.

Everyone wants nice stuff and many bought that whether it was a fancier house, the vacation home, a boat, a $90K pickup truck, etc. With the cost of everything going up to much over a number of years plus people's dwindling savings accounts, the day of reckoning is coming for many, especially those that over-leveraged themselves wearing those rose-colored glasses and buying and consuming.

The market fall will happen rapidly and with little warning, just as it always has.

[vreihen16]

Party like it's 1929!!!!!

[TboneS54]

I don't know how people haven't run out of money, or credit limits, yet. I thought we were going to see the fallout last year. I guess many have a lot of equity now to tap into, variable interest rates be damned.

[chassis]

Originally Posted by TboneS54

I don't know how people haven't run out of money, or credit limits, yet.

Paychecks. From jobs, or rather, employment. Jobs, and paychecks, are plentiful. The economy is growing.

[ASAP]

Originally Posted by XutvJet

So how long is this market sustainable and what is going to be the first this to break? Profits continue to go up as companies charge more for less, fast food is no longer cheap, food in general is crazy expensive, auto dealers have overflowing lots now, housing remains thin and over-priced, etc. People bitch about current interest rates being too high but the reality is consumers and companies got way to is use to cheap rates for nearly two decades. The current rates are consistent with those back in the earlier 2000s.

I think the market collapse will start with the automotive industry. Dealers and automakers got too comfy with making tons of money following COVID. Then there's the EVs nobody wants now, the cost of vehicles in general, "high" rates, etc. I think what will kick the whole thing off will be payment delinquency.

Everyone wants nice stuff and many bought that whether it was a fancier house, the vacation home, a boat, a $90K pickup truck, etc. With the cost of everything going up to much over a number of years plus people's dwindling savings accounts, the day of reckoning is coming for many, especially those that over-leveraged themselves wearing those rose-colored glasses and buying and consuming.

The market fall will happen rapidly and with little warning, just as it always has.

I THINK there is a few things that could happen in the next few years that are best case scenario for the "consumer" or worker rather.

1. Demand continues to slow and we start to see price wars across industries...this will bring about deflation (not a good thing but much needed right now across the board to correct the crazy covid upswings).

2. Unemployment goes up and again demand goes down.

3. The market recorrects itself based on true valuations and ghost companies and this tech BS that hasn't seen true light of day normalizes to what value it actually offers. This will bring back sense into the S&P500 and Dow and fundamentals will return.

The above 3 things will bring about pain for the next few years but they will normalize the world per say.

The opposite to that is true stagflation which is the absolute worst thing in the world as prices STAY high and there is no GDP growth. The govt will continue to paper over our problems, print $ and inflation will just continue killing any semblance of the american dream. There are no good outcomes right now but one is FAR better long term than the other.

[Chick Webb]

Originally Posted by TboneS54

I don't know how people haven't run out of money, or credit limits, yet. I thought we were going to see the fallout last year. I guess many have a lot of equity now to tap into, variable interest rates be damned.

Consumers, particularly on the low end, have been crushed; it just takes a little time to play out. This morning I heard some CEO, can't recall who, saying that they are seeing a "K-shaped" consumer base, with the low-end heading lower.

Plenty of evidence of slowing consumer spending here, too - Ahead of retail earnings, here’s what we know about the consumer so far (CNBC)

[Tyga11]

Originally Posted by TboneS54

I don't know how people haven't run out of money, or credit limits, yet. I thought we were going to see the fallout last year. I guess many have a lot of equity now to tap into, variable interest rates be damned.

Why would people just 'run out of money?'

The price of groceries isn't going to put most people homeless. Having shredded cheese go up $2 (or 50%) isn't a huge deal to most people.

Most of the inflation we've seen is in the travel sector and obviously home / car insurance.

[Chick Webb]

Originally Posted by Tyga11

Why would people just 'run out of money?'

The price of groceries isn't going to put most people homeless. Having shredded cheese go up $2 (or 50%) isn't a huge deal to most people.

Most of the inflation we've seen is in the travel sector and obviously home / car insurance.

This being a BMW forum you can be forgiven for maybe being a little out of touch, but literally 1/2 of the households in this country live paycheck-to-paycheck and have almost zero savings for emergencies. COVID changed that through a combination of (for some) reduced expenses and plenty of free gub'mint cash, but alas that has proved to be ephemeral, whether because of inflation, poor spending choices, or both. The extra money is long gone at this point.

Those households live on a shoestring and, in fact, the price of groceries (which was also temporarily heavily subsidized during COVID through expanded SNAP benefits), is a huge issue. Food prices across the board are up quite a lot. Many are having to choose between buying groceries for their families or paying the utility bill. Pile on the other inflated costs that they face, many of which are essentials like rent, car insurance, gas, etc., and they are truly hurting in a way that hasn't been seen in a couple of generations.

Inflation may annoy those of us with 2.5% mortgages and healthy stock portfolios, but it crushes the lower income demographics.

[ASAP]

Originally Posted by Chick Webb

This being a BMW forum you can be forgiven for maybe being a little out of touch, but literally 1/2 of the households in this country live paycheck-to-paycheck and have almost zero savings for emergencies. COVID changed that through a combination of (for some) reduced expenses and plenty of free gub'mint cash, but alas that has proved to be ephemeral, whether because of inflation, poor spending choices, or both. The extra money is long gone at this point.

Those households live on a shoestring and, in fact, the price of groceries (which was also temporarily heavily subsidized during COVID through expanded SNAP benefits), is a huge issue. Food prices across the board are up quite a lot. Many are having to choose between buying groceries for their families or paying the utility bill. Pile on the other inflated costs that they face, many of which are essentials like rent, car insurance, gas, etc., and they are truly hurting in a way that hasn't been seen in a couple of generations.

Inflation may annoy those of us with 2.5% mortgages and healthy stock portfolios, but it crushes the lower income demographics.

I think people have a real hard time remembering median US household income is 77K... this is no longer a home owner but rather a life long renter at the mercy of landlords... all of their expenses going up up and up is crushing these folks... car payments are at an all time high and as was mentioned insurance and hyperinflation just continue to further the blow...

the govt continues to gaslight nonsense about things being well...

let me tell you - if you are sitting heavy on assets at low rates, make over 6 figures and have consistent cash flow, this doesn't affect you much...

so either there is a TON of these so called well doers... or there is lying all around because the statistics don't align with reality

the absolute best thing that can happen right now is a reset to pre covid... which would necessitate a 30% blow to real estate, the stock market and unemployment would go up...it would also necessitate a reset to old margins... but at least we'd back to a normal environment and rates would slowly fall into a more manageable 5 or so %... think that will happen? it wont... because the govt wont let it happen... in other words, median income earners are screwed and stagflation will continue

[bagekko]

Govt assistance programs, SNAP, unemployment, etc are still under disaster rules or actually no rules, so the hurt for the lower end hasn't hit bottom. States are allowed to waive all rules, restrictions, and expiration of peoples benefits for up to 2yrs after the end of a govt declared disaster, so I don't think that has occurred yet.

Originally Posted by Chick Webb

Those households live on a shoestring and, in fact, the price of groceries (which was also temporarily heavily subsidized during COVID through expanded SNAP benefits), is a huge issue.

[Chick Webb]

Originally Posted by bagekko

Govt assistance programs, SNAP, unemployment, etc are still under disaster rules or actually no rules, so the hurt for the lower end hasn't hit bottom. States are allowed to waive all rules, restrictions, and expiration of peoples benefits for up to 2yrs after the end of a govt declared disaster, so I don't think that has occurred yet.

Other than the slow trickle of 6 Trillion in federal stimulus that has been authorized but not spent, pretty much all of the benefits have reverted to pre-COVID levels. SNAP expansion ended in early 2023 (see infographic below), the increased child tax credit was not extended beyond 2022 and reverted to $1600/per child for 2023 taxes. Even California generally requires you to actually be looking for work to qualify for unemployment benefits again. Shocking, I know...

Most of the world is already in recession, or will be very soon. The Swiss national bank just lowered their benchmark interest rate by 0.25%, in large part because their economy has been shrinking for 4(!) quarters; I remember when we called that a depression, not a recession. The rest of Europe/UK is right behind them and the only real question now is will the ECB of the BoE be the first to cut? China's problems are obvious. Assuming the West doesn't allow them to export their way out of them, it'll take the better part of a generation to get fully back on track. And the Rest of World (RoW) is suffering under the weight of their (too strong) dollar-denominated debt. Growth for them will be very difficult if not impossible.

All of that federal money printing here is dragging things out, but business cycles are business cycles and we'll get there, eventually. The stagnation train is pulling into the station. Jobs in some industries are already hard to get, and people w/o jobs do not spend money unless they have to. If companies panic and start pulling the plug on all of those extra COVID hires, like the tech guys have been doing since last year, the jobs picture will deteriorate quite rapidly. That would tip us into recession - which, compared to an extended period of stagflation would actually, long run, be preferable - and then we'd get some interest rate relief from Powell.

I've been saying this for quite some time and still believe it. Several million people need to lose their jobs before this cycle can end, we get a chance to clean out the deadwood, and a new cycle of properly-grounded growth can begin. Likely that'll be bad for everyone for a while, but it's necessary for a healthy economy.