Last night, the stock markets around the world decided to go lower. I am seeing headlines today that it’s the biggest two-day decline since that long ago halcyon age in June.
We have been in a bear market since Jan 1, or prior to that but whatever.
Senator Elizabeth Warren says these Fed rate hikes are going to put us in a recession. Shifting blame to the Fed is exactly the wrong thing to do. Maybe she needs to read the smoke signals differently. The reason the economy is in the tank is precisely because of the actions people like Elizabeth Warren voted for. Government spending is the fuel that causes inflation, full stop.
Master trader Jim Cramer said on CNBC this morning that the problem with the American economy is we don’t have enough engineers. Uh-huh. The Biden Administration just gave unconstitutional loan relief to all college loans and I bet there is a very small percentage of them that were engineers.
Lack of engineering talent isn’t a problem in our economy. Besides, with the internet, you can find plenty of engineers to work for you without them actually being physically in the United States. By the way, some Jewish students were unhappy with their US collegiate experience and despite being US citizens are emigrating to live in Israel.
The new wokeness Democrats have hitched their wagons to and are forceably oppressing free society with is not only ruining civil society, but it’s starting to cause a brain drain too.
Capitalism makes people’s lives better than any other system. My friend John Tillman wrote this.
When I perused Stocktwits and Twitter, I saw a lot of technical analysis touts talking about this support point and that support point. “If we go there, then we have to go here”. I have got news for you young whippersnappers that haven’t seen a bear market with teeth (and claws). Your technical points of support become Maginot Lines in a volatile market. They say that charts are found at the bottom of the ocean in bear markets. The only reason bear markets change course and run higher is the shorts are covering, or some information has fundamentally changed which causes them to change.
Tell me what has changed since January of 2021 that would cause you to get bullish?
A friend of mine in Vegas who manages money has a hedge fund, and trades said that 3200 in the S+P is 16x earnings for the market which is sort of the traditional multiple that it trades at. Ironically, my gut feel was that 3200 was the right price for it to trade down to before it can get organized for a rally.
How do I know it’s a bear market? I goof around with 3M ($MMM) calls. I own some 3M stock that I received when I worked there and I sell calls against it to learn about trading options. If I make a mistake it’s not fatal.
I sold some October 135 calls when the stock was trading in the 120’s. It rallied through my price all the way to $152. The stock started to break and was holding around $140. In two days the stock is down in the 120s.
In bull markets, you can almost always get your longs that you are underwater on back if you are patient. In bear markets, the opposite is true. But, in bear markets, you get them back a lot faster than you do in bull markets.
We are in for a rough ride in all markets from what I can see on the horizon. I remember earlier this year when the Goldman analysts were telling us the market would bottom in the Spring, and then be higher by December. I thought that was bullshit then and I think anyone calling for highs right now has brown eyes as well.
Chartists..the great backfitters of market action. The financial beatings will continue until morale improves or until enough idiotic voters are beaten down enough to cry Uncle!, and try something different. As Glenn Reynolds has so often put it...we're paying for our poor choices "good and hard". The markets as usual will sniff out a turn before its obvious, likely when or IF a Democratic mid-term drubbing is a fait accompli, but given the misdirection in our last national election, that may not happen until very late this time. Of course the leftists could turn it around with enough giveaways or steal it again with enough skullduggery, and maybe we'd end up seeing the S&P reach the 2000's
I think you should comment on the BRICS nations turning away from the dollar, along with the Saudis. This, IMHO, would be extremely ominous for the US economy.
There appear to be a LOT of dark clouds on the world's horizon, political as well as economic. Russia/Ukraine, China/Taiwan, F*** Joe Biden, all the internal corruption, the fact that we nearly increased the M1 supply 5 fold in less than a year in 2020, the fed seemingly committed to curbing inflation (wonder if it will blink, thank God J Yellen isn't still at the helm), so the markets are going to tank, including Bonds. Inflation is fixing to rage like we have never seen, even in the 70's, GDP is falling like a rock.
With all of these storm clouds brewing it would seemingly take a miracle for them all to pass without causing some serious storms.
It is possible that we are living our version of August of 1914, when WWI essentially blew up the existing world order. I am not saying we are facing WWIII, although that is certainly possible, but I do think we are entering a time when the world resets (hopefully not the way that the WEF wishes) and it certainly doesn't look like we in the US are poised to come out the better for it.
Top all of that off with the fact that our current elites and leaders, in both parties with rare exceptions on the R side, are filled with hubris and have no love of country and really believe they can control events on the world stage, and I think we are in for some rough waters.