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Post by mozart522 on Jul 25, 2022 15:13:36 GMT
Here is a new episode from John Oliver the Comic, on Inflation. It is for the ones that don't understand inflation in the most basic ways. But he does a good job explaining it, I think. www.youtube.com/watch?v=MBo4GViDxzcLOL Gotta love John. Well, unless you are Cramer.
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Post by Chahta on Jul 26, 2022 15:37:46 GMT
It is expected the growth is negative for Q2. We are in recession.
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Post by bf22 on Jul 26, 2022 18:27:39 GMT
It is expected the growth is negative for Q2 is negative. We are in recession. A double negative.. Otherwise, I probably agree.
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Inflation
Jul 26, 2022 23:33:43 GMT
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Post by Chahta on Jul 26, 2022 23:33:43 GMT
It is expected the growth is negative for Q2 is negative. We are in recession. A double negative.. Otherwise, I probably agree.
My great posting technique on my phone. It is corrected. Unemployment has started higher I think with Musk cutting many jobs at Tesla. Others too.
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Post by roi2020 on Jul 27, 2022 5:28:11 GMT
Two consecutive quarters of negative GDP do not necessarily indicate that we are in a recession. In the first quarter, U.S. imports increased (partly because of supply chain issues) while exports decreased. The imbalance was estimated to subtract 3.2% from the first quarter's GDP growth rate. The growth rate would have been +1.8% if this impact was removed. "Because a recession must influence the economy broadly and not be confined to one sector, the committee emphasizes economy-wide measures of economic activity. The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. These include real personal income less transfers, nonfarm payroll employment, employment as measured by the household survey, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, and industrial production."Link
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Post by BearMkt on Jul 29, 2022 1:00:01 GMT
Two consecutive quarters of negative GDP do not necessarily indicate that we are in a recession. In the first quarter, U.S. imports increased (partly because of supply chain issues) while exports decreased. The imbalance was estimated to subtract 3.2% from the first quarter's GDP growth rate. The growth rate would have been +1.8% if this impact was removed. "Because a recession must influence the economy broadly and not be confined to one sector, the committee emphasizes economy-wide measures of economic activity. The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. These include real personal income less transfers, nonfarm payroll employment, employment as measured by the household survey, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, and industrial production."LinkStated like a modern-day politician. Things cost a LOT more the past year and half along with a multitude of other problems that affect average citizens. I just hope things turn around in November.
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Post by roi2020 on Jul 29, 2022 4:30:40 GMT
Two consecutive quarters of negative GDP do not necessarily indicate that we are in a recession. In the first quarter, U.S. imports increased (partly because of supply chain issues) while exports decreased. The imbalance was estimated to subtract 3.2% from the first quarter's GDP growth rate. The growth rate would have been +1.8% if this impact was removed. "Because a recession must influence the economy broadly and not be confined to one sector, the committee emphasizes economy-wide measures of economic activity. The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. These include real personal income less transfers, nonfarm payroll employment, employment as measured by the household survey, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, and industrial production."LinkStated like a modern-day politician. Things cost a LOT more the past year and half along with a multitude of other problems that affect average citizens. I just hope things turn around in November. BearMkt , My comments were a response to talk of a recession. It seems that you are referring to inflation. There's no doubt that inflation is impacting the average citizen. Modern-day politician - what's that all about?
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Post by helmut on Jul 29, 2022 18:07:24 GMT
Two consecutive quarters of negative GDP do not necessarily indicate that we are in a recession. In the first quarter, U.S. imports increased (partly because of supply chain issues) while exports decreased. The imbalance was estimated to subtract 3.2% from the first quarter's GDP growth rate. The growth rate would have been +1.8% if this impact was removed. "Because a recession must influence the economy broadly and not be confined to one sector, the committee emphasizes economy-wide measures of economic activity. The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. These include real personal income less transfers, nonfarm payroll employment, employment as measured by the household survey, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, and industrial production."LinkWe can debate whether or not we are currently in a recession using whatever statistics serves our argument but recent events and government reactions indicate we are power driving the economy directly into a correction. Last year the government assured us that inflation was transitory. Now they telling us we are not in a recession. History tells us that excessive government spending and high oil prices spells future economic trouble. We have tried spending our way to prosperity and it has never worked in the past. Forty year high inflation should tell us our economy is in trouble. If it looks like a duck and quacks like a duck, I think it is safe to say it is a duck. helmut
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Post by roi2020 on Jul 29, 2022 22:16:25 GMT
I'm fairly certain we'll see a recession in the near future. I doubt that the NBER (official arbiter of recessions) will state that we're currently in a recession based on data they use to make this determination.
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Post by Fearchar on Jul 29, 2022 23:22:34 GMT
I'm fairly certain we'll see a recession in the near future. I doubt that the NBER (official arbiter of recessions) will state that we're currently in a recession based on data they use to make this determination. I don't think we are in for a real recession in the traditional sense. Over the past 6 months, GDP has contracted by 0.63%. So, yeah, technically that's a recession, but it's not statistically significant. It could get worse, but will it be significant??? There is too much cash floating around and too many job being created and unfilled jobs. Because of the job situation, we can't call it stagflation either.
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Post by BearMkt on Jul 30, 2022 1:02:47 GMT
Stated like a modern-day politician. Things cost a LOT more the past year and half along with a multitude of other problems that affect average citizens. I just hope things turn around in November. BearMkt , My comments were a response to talk of a recession. It seems that you are referring to inflation. There's no doubt that inflation is impacting the average citizen. Modern-day politician - what's that all about? Yes, it's hard for me to ignore inflation as an average citizen. The data which defines a "recession" is apparently a little bit of moving target. But I'm not defending a dissertation here, just stating my observations as an average citizen.
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Post by mnfish on Jul 30, 2022 11:25:10 GMT
Some interesting tidbits from recent articles -
"The personal consumption expenditures price index rose 6.8% in June, the biggest 12-month move since the 6.9% increase in January 1982." "The employment cost index, another figure Fed policymakers follow closely, rose 1.3% in the second quarter. The index climbed 5.1% on a 12-month basis, a record for data series that goes back to 2002." "Wage gains at this pace are far too high for the Fed, because they would require implausible rapid productivity growth in order to be consistent with the inflation target in the medium-term,"
RAY DALIO: "You can't keep spending and bring down inflation. So, here's what I think. I think that we're not going to be able to bring an interest rate to a high enough level to give a good, real return to holders of credit without causing a contraction in economic activity. You had an 8% inflation rate. Look at what people get. And we're talking now about a 3% interest rate. And people think that that's good, right? So you're going to lose money and lose buying power. I think the inflation will come down a bit, but it's going to be very high, and money is going to get a lot tighter. So you're going to have a stagflation."
Edward Chancellor, a financial historian, - "argues central bankers are to blame. In his view, central banks' unsustainable policies have created an “everything bubble,” leaving the global economy with an inflation “hangover.”
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Post by Deleted on Jul 30, 2022 13:09:16 GMT
Debate between Siegel and former Fed Vice-Chair Kohn on Behind the Markets -
December fed fund rate is at 3.29% Currently 2.33, so less than 1% to get there. Siegel doesn't think Fed funds rate needs to go much higher. Crux of the debate. Siegel constantly emphasizes the lagging indicator nature of inflation. While there has been no period in history (that's right folks - we are talking historical significance here!) where M2 has DECLINED in four months, there also hasn't been a period where it grew so much so fast. Per Siegel - stock market wants to know the Fed is really looking at real time indicators.
A point not often enough discussed - yes there was massive stimulus in 3/20 and 3/21 - 4/21. Government sent checks directly to people. The Fed made this possible by allowing the money to be printed to do so instead of forcing USG to finance the debt through the bond market. Then rates would have risen more quickly.
Kohn states the monies in consumer accounts are being spent. Kohn wouldn't commit to predicting an ultimate Fed fund rate to contain inflation. Posited 4%, but will need to go meeting to meeting. Note Siegel thinks maybe less. 4% will cause a REAL inversion and potential deep recession. Kohn feels we don't know the persistence of inflation. 2 positives - spending is slowing and expectations adjusting down. Siegel notes slowing housing, rate sensitive commodities down. Kohn and Siegel argued about Fed needing to see actual evidence that inflation is heading down. Siegle says M2 decline tells the tale. Kohn pretty adamant that Fed will need to see actual slack in product and labor markets so as to get to 2% inflation target. Siegel of course counters with lagging indicators are just that. Kohn - sorry , but can't make these decisions solely based on projections. Sara's translation - standby as the Fed messes this up!
Super interesting discussion on productivity going down for 2 months in a row - 7% and 6% - for the first time ever. Inputs to determine this - GDP and hours worked. One of them is very wrong. How can hundreds of thousands of jobs be added, yet productivity declines. Maybe we are growing at 2% or maybe hours worked isn't being correctly measured. Maybe stay at homers aren't working as much. This would explain why real wages aren't rising - they are already rewarding work done.
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Post by uncleharley on Jul 30, 2022 13:22:30 GMT
I would like to add to the above discussion that the Fed is likely to let the economy run a little hot in an effort to not disturb the stock and bond markets in an election yr. This means to me that the stock market will be volatile in a generally sideways direction for the next several months. Of course this is JMHO.
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Post by retiredat48 on Jul 30, 2022 15:28:29 GMT
Super interesting discussion on productivity going down for 2 months in a row - 7% and 6% - for the first time ever. Inputs to determine this - GDP and hours worked. One of them is very wrong. How can hundreds of thousands of jobs be added, yet productivity declines. How about: The last workers to be hired, are often very unproductive. Really poor employees can also drag down other's output. I know some newly hired waitstaff people that I find very unproductive. Had one waitstaff person give me a $100 check with a $50 state tax applied...$150 total. This person could not comprehend that a 7% tax on a hundred is about $7. Staff kept insisting the computers never lie. Ten minutes later the manager had to resolve this...(in my favor of course) and he shrugged his shoulders saying..."you ain't seen nothing yet!" R48
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Post by retiredat48 on Jul 30, 2022 15:33:43 GMT
For long term investors...remember:
--no inflation.............good to own companies/ stocks
--moderate inflation.......good to own companies/stocks
--severe inflation..........good to own companies/stocks
--hyper inflation..........mandatory to own companies/stocks (as they have an uncanny way of emerging from the financial dustbin---think German Companies after WWII)
Bottom line: Do not be talked/scared out of owning stocks/mutual funds/ETFs in your normal allocation percentages.
Good luck.
R48
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Post by bobfl on Jul 31, 2022 12:21:06 GMT
Super interesting discussion on productivity going down for 2 months in a row - 7% and 6% - for the first time ever. Inputs to determine this - GDP and hours worked. One of them is very wrong. How can hundreds of thousands of jobs be added, yet productivity declines. How about: The last workers to be hired, are often very unproductive. Really poor employees can also drag down other's output. I know some newly hired waitstaff people that I find very unproductive. Had one waitstaff person give me a $100 check with a $50 state tax applied...$150 total. This person could not comprehend that a 7% tax on a hundred is about $7. Staff kept insisting the computers never lie. Ten minutes later the manager had to resolve this...(in my favor of course) and he shrugged his shoulders saying..."you ain't seen nothing yet!" R48 -----------------------------------------------------------------------------------------------------------------------------------------
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Post by xray on Jul 31, 2022 19:24:28 GMT
Yahoo Finance Stock market rally in focus after best month since 2020: What to know this week Alexandra Semenova·Reporter Sun, July 31, 2022, 2:11 PM
August begins with investors looking to build on gains following the best month for U.S. equity markets since late 2020. In the week ahead, the July jobs report and a continued flood of corporate results will remain top of mind for investors. Friday's employment data is expected to show nonfarm payrolls grew by 250,000 in July, while another 150 companies in the S&P 500 are set to report quarterly results in the coming week. Roughly 56% of names in the index have unveiled figures so far.
U.S. stocks finished off their best month since November 2020 on Friday, as markets rallied in each of the week's final three trading sessions. For the month of July, the S&P 500 gained 9.1%, fighting back from its worst start to a year since 1962 after the benchmark index plunged 20.6% in the first six months of 2020. The Nasdaq Composite rallied 12.3% to notch one of its best months on record, and the Dow Jones Industrial Average rose 6.7% for the month. A sharp rebound for equities in recent weeks comes amid expectations that slowing economic growth may prompt the Federal Reserve to scale back its interest rate hiking cycle in the fall.
Last week, the advance estimate for second quarter GDP showed the economy contracted at an annualized rate of 0.9% – marking the second consecutive quarterly decline for the measure and meeting the unofficial definition of a recession. “Even if we’re in a technical recession already, it may be wishful thinking that inflation will come down quickly enough to allow the Fed to cut rates without having a detrimental effect on the labor market and broader economy in the process,” DWS Group Head of Trading and COO George Catrambone said in a note.
“The market may want to be looking ahead to these cuts, but many companies will not be able to escape demand destruction, margin pressure, reduction in hiring and job cuts, and foreign exchange headwinds that restrictive monetary policy and an increasingly gloomy global environment will bring.” Some better-than-expected earnings reports, particularly from heavyweights Apple (AAPL) and Amazon (AMZN), have so far kept sentiment afloat, but second quarter figures are lackluster. Among S&P 500 companies that have reported results so far for Q2, companies are reporting earnings that are only 3.1% above estimates, below the five-year average of 8.8%, according to data from FactSet Research.
Washington has been quick to point out that despite two consecutive quarters of negative GDP, the National Bureau of Economic Research (NBER) has official say over whether the U.S. economy is in a recession or not. The organization defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months." White House Council of Economic Advisers Member Jared Bernstein emphasized on Yahoo Finance Live last week that the labor market continues to be an “important buffer” to recession. But that buffer appears to be showing signs of weakening. Initial jobless claims held near an eight-month high at 256,000 in the week ended July 23 after the prior week’s reading was revised up by 10,000 to the highest level for first-time unemployment insurance filings since November. And economists expect the broader employment report this week to show 250,000 new jobs were created in July, which would mark a noted decrease from the 372,000 jobs added in June.
“There are growing signs that labor market momentum is cooling from a pretty elevated level,” economists at Bank of America led by Michael Gapen said in a recent note, citing an increase in initial jobless claims and news of company layoffs. BofA said that although data on job openings from Indeed suggest the latest data to show another solid month of job growth, “the labor market should slow quickly, soon” amid strong hiring and falling GDP creating “an unsustainable collapse in productivity.”
Federal Reserve Chair Jerome Powell said in a statement last week following the U.S. central bank’s decision to bump up interest rates another 75 basis points that the labor market is “moving back into balance” and is only at “the beginning of an adjustment” rather than weakening. “I would say, there's some evidence that labor demand may be slowing a bit – labor supply, not so much,” Powell said. “Nonetheless, I would say some progress on demand supply getting back in alignment.”
Elsewhere on the economic calendar, investors will digest ISM manufacturing data, job openings data, and durable goods orders, among other reports. Federal Reserve Bank presidents Charles Evans, James Bullard, and Loretta Mester are also scheduled to give speeches this week as the central bank rolls out of its blackout period after last week’s policy setting meeting.
Earnings in the spotlight this week will come from Caterpillar (CAT), Block (SQ), CVS Health (CVS), Starbucks (SBUX), and Uber (UBER), among other big names.
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Economic Calendar
Monday: S&P Global U.S. Manufacturing PMI, July final (52.3 expected, 52.3 during prior month), Construction Spending, month-over-month, June (0.3% expected, -0.1% during prior month), ISM Manufacturing, July (52.0 expected, 53 during prior month), ISM Prices Paid, July (73.5 expected, 78.5 prior month), ISM New Orders, July (49 expected, 49.2 during prior month), ISM Employment, July (48.2 expected, 47.3 during prior month)
Tuesday: JOLTS job openings, June (10.994 million expected, 11.254 million during prior month), Wards Total Vehicle Sales (13.5 million expected, 13 million during prior month)
Wednesday: MBA Mortgage Applications, week ended July 29 (-1.8% during prior week), S&P Global U.S. Services PMI, July final (47 expected, 47 during prior month), S&P Global U.S. Composite PMI, July final (47.5 during prior month), Durable Goods Orders, June final (1.9% during prior month), Nondefense Capital Goods Orders Excluding Aircrafts, June final (0.5% during prior month), Nondefense Capital Goods Shipments Excluding Aircrafts, June final (0.7% during prior month), ISM Services Index (54 expected, 55.3 during prior month), Factory Orders Excluding Transportation, June (1.7% during prior month), Durables Excluding Transportation, June final (0.3% during prior month)
Thursday: Challenger Job Cuts, year-over-year, July (58.8% during prior month), Trade Balance, June (-$80.0 billion expected, -$85.5 billion during prior month), Initial Jobless Claims, week ended July 30 (258,000 expected, 256,000 during prior week), Continuing Claims, week ended July 23 (1.359 during prior week)
Friday: Change in Nonfarm Payrolls, July (250,000 expected, 372,000 during prior month), Change in Private Payrolls, July (225,000 expected, 381,000 during prior month), Change in Manufacturing Payrolls, July (20,000 expected, 29,000 during prior month), Unemployment Rate, July (3.6% expected, 3.6% during prior month), Average Hourly Earnings, month-over-month, July (0.3% expected, 0.3% during prior month), Average Hourly Earnings, year-over-year, July (4.9% expected, 5.1% prior month), Average Weekly Hours All Employees, July (34.5 expected, 34.5 during prior month), Labor Force Participation Rate, July (62.2% expected, 62.2% during prior month), Underemployment Rate, July (6.7% prior month), Consumer Credit, June ($25 billion expected, $22.347 billion during prior month)
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Live Long and Prosper....
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Post by Deleted on Aug 2, 2022 1:50:42 GMT
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Post by mozart522 on Aug 2, 2022 3:06:39 GMT
I hope he is correct, but I don't see the Fed slowing down much until inflation has clearly come down quite a bit. The danger of stopping too soon may be more powerful, than fear of over doing the hikes. And I don't think we have seen the bottom yet. But I hope I'm wrong.
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Post by Deleted on Aug 2, 2022 9:30:52 GMT
mozart522 , I hope he is correct as well. But even if he is, that doesn't mean the Fed would slow down, only that they should. No idea if we have seen the bottom either and don't think I will know for sometime! Any thoughts on what a 1.5% neutral funds rate - no expansion/no contraction - would imply for the economy/markets?
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Post by Deleted on Aug 2, 2022 11:17:10 GMT
Siegel reminds me of Abby Joseph Cohn another perma bull blast from the past. Somehow he has hung on to public attention and she has faded away. I would not take either despite their academic credentials seriously.
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Post by Deleted on Aug 2, 2022 11:46:22 GMT
Siegel reminds me of Abby Joseph Cohn another perma bull blast from the past. Somehow he has hung on to public attention and she has faded away. I would not take either despite their academic credentials seriously. I know. And isn't is amazing that such a non-serious-to-be-taken person has regular discussions with Fed officials, studied/collaborated with arguably the greatest monetarist of all time, wrote a book that is in its 6th edition and lauded by prominetn financiers/economists, taught finance at arguably the greatest business school in the world, and as an aside - managed to get this inflation situation - arguably the most dramatic economic consequence since the GFC - exactly right? What did Cohn do to compare just out of curiousity?
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Post by racqueteer on Aug 2, 2022 12:14:37 GMT
Oooo... Food fight! Where's my popcorn?
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Post by Deleted on Aug 2, 2022 12:16:08 GMT
Getting inflation right???
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Post by mozart522 on Aug 2, 2022 13:14:33 GMT
mozart522 , I hope he is correct as well. But even if he is, that doesn't mean the Fed would slow down, only that they should. No idea if we have seen the bottom either and don't think I will know for sometime! Any thoughts on what a 1.5% neutral funds rate - no expansion/no contraction - would imply for the economy/markets? Short term it might be good for the economy/markets. Longer term it is too low IMO. It forces investors into riskier assets than they are comfortable with. I prefer to see a balance where I can get 3-4% in IG fixed income, which then might allow me to feel beter about a somewhat higher equity allocation. I would suspect higher rates would also help with inflation. But I accept the fact that I don't know much, although I have learned from the mistakes of those who have taken my advice
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Post by johntaylor on Aug 2, 2022 14:02:25 GMT
Siegel also has the benefit of talking with his friend, Nobel winner Shiller. They met while grad students.
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Post by Deleted on Aug 2, 2022 14:13:34 GMT
Siegel also has the benefit of talking with his friend, Nobel winner Shiller. They met while grad students. Revised this on second thought - for those who didn't follow other forum inflation debates over the last 18 months or so, they are there if you want to look for them. I am not going there again.
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Post by Deleted on Aug 2, 2022 14:27:17 GMT
mozart522 , I hope he is correct as well. But even if he is, that doesn't mean the Fed would slow down, only that they should. No idea if we have seen the bottom either and don't think I will know for sometime! Any thoughts on what a 1.5% neutral funds rate - no expansion/no contraction - would imply for the economy/markets? Short term it might be good for the economy/markets. Longer term it is too low IMO. It forces investors into riskier assets than they are comfortable with. I prefer to see a balance where I can get 3-4% in IG fixed income, which then might allow me to feel beter about a somewhat higher equity allocation. I would suspect higher rates would also help with inflation. But I accept the fact that I don't know much, although I have learned from the mistakes of those who have taken my advice That makes sense. The idea I get is that inflation that is in the pipeline (money supply increase) will work through the system and increase in rates won't stop that and it has some time still to filter through. So I am not sure one way or another if higher rates would help the cause. If there is increasing inflation, I would think so too - higher rates would help.
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Post by FD1000 on Aug 2, 2022 19:25:57 GMT
Siegel reminds me of Abby Joseph Cohn another perma bull blast from the past. Somehow he has hung on to public attention and she has faded away. I would not take either despite their academic credentials seriously. I know. And isn't is amazing that such a non-serious-to-be-taken person has regular discussions with Fed officials, studied/collaborated with arguably the greatest monetarist of all time, wrote a book that is in its 6th edition and lauded by prominetn financiers/economists, taught finance at arguably the greatest business school in the world, and as an aside - managed to get this inflation situation - arguably the most dramatic economic consequence since the GFC - exactly right? What did Cohn do to compare just out of curiousity? Haven? exactly right. Siegel? he got the direction of inflation right, but he never predicted anything close to 9+% He also got many things wrong, especially when he gives accurate predictions, or talk about other things than just "hold stocks forever". Bogle told you to hold 2-3 funds forever, but he wasn't a clown. Examples: His predictions for 2021 were terrible ( link). He missed on 1) 10 year rate 2) growth was better than SC+EM+value 3) Dollar was up, not down 4) Oil was much higher 5) The virus was substantial, not back room noise. 6) Didn't have any advice on bonds, sell bonds isn't good for many retirees. 2008-he missed the biggest decline (in several months) since 2000. It's pretty easy to say hold stocks forever when they usually go up, and almost every time they go down, he misses. He doesn't have any solution for bond holders, unless they are high-rated such as treasuries or total US index. But, he has charisma, he loves to be on TV, and the TV guys always look for interesting personalities. But he is not alone, there are many analyses on CNBC, some on daily shows with 50/50 accuracy.
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