The Economy

Songbird · Jan 7, 2023

doctorquant said: ↑

This "stage" of capitalism is called the "Math" stage.
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When do Adam and Eve join the stage?

Azrael · Jan 7, 2023

TrooperBari said: ↑

The logic seems to be that a strong jobs market = wage growth likely to continue = inflation likely to continue = Fed likely to keep raising rates = investors likely to flee to safety.
Stocks surge after better-than-expected jobs report
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The Big Ragu said: ↑

Bingo. "Good news" = bad news.

It's all tea leave reading, though, and one day-fluctuations based on random economic reports are more often that not getting reversed quickly, because underlying it all is still. ... obviously high consumer price inflation.

Also, the Fed raising rates isn't the big threat to risk assets (including the equity market) at this point. It's the balance sheet, which they have talked a big game on, but are reducing at a slower than slow pace. If they actually follow through, that is when the stock market will collapse (which is why there is a lot of money betting they are not serious).

They have spent almost a decade and a half creating money out of thin air and using it to buy treasury and mortgage debt, which has been the main mode of suppressing interest rates. The cheap money that unleashed has blown the mother of all equity bubbles. The size of their balance sheet topped at around $9 trillion worth of asset purchases. They are not expanding the balance sheet, which is why the stock market has buckled. But to deal with their inflation problem, they need to actually let the bonds they bought mature and roll off their books rather than reinvesting the principal. They have talked about it, tried to prepare markets for it, are still talking a big game. ... but if they follow through, things are going to break. Worse than they did in 2008 when the bubble they had blown was much smaller.

Unfortunately, they are backed against a wall, because of the pressure to deal with the consumer price inflation (which was a consequence of the monetary inflation behind that huge balance sheet). But if they do it. ... there are going to be credit defaults and a lot of failure, and people are going to hear "too big to fail" talk again. The only question is what area the first explosion occurs, because they are so many leveraged areas of the economy on the back of a decade and a half of mispriced debt markets. It's impossible to predict, but the corporate leveraged loan market is a prime candidate. A lot of that debt has relied on rolling over their debt every few years, which wasn't a problem in a zero interest rate policy environment. ... In the coming year, if the Fed keeps it up, their funding costs are going to have risen dramatically, and the sudde ncredit concerns that the distorted markets pushed into neverland are going to make it much more difficult for them to find that funding. I suspect we're going to find that 1) there are a lot of people swimming naked, and the tide is about to go out, and 2) the amount of bad debt is going to make 2008 look relatively quaint.

Which is why markets (the bond market is the smart money, and the inverted yield curve says it all -- it is cheaper to borrow for 30 years than for 2 years) are actually betting that the Fed is going to do what the Fed always does, and try to kick the can down the road. ... they will turn tail rather than deal with the economic chaos they are reponsible for, and at this point if it means runaway consumer price inflation, they will prefer to try to inflate away the debt (on the back of all of us) rather than let the defaults happen.
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doctorquant said: ↑

This "stage" of capitalism is called the "Math" stage.
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My first thought was "vaudeville stage."

The Aristocrats!

garrow · Jan 12, 2023

JP Morgan Says Startup Founder Used Millions Of Fake Customers To Dupe It Into An Acquisition

The Big Ragu · Jan 12, 2023

garrow said: ↑

JP Morgan Says Startup Founder Used Millions Of Fake Customers To Dupe It Into An Acquisition
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Why this link?

britwrit · Jan 13, 2023

Interestingly enough, in the Disney case, Mickey Mouse goes into the public domain next year. Just the Steamboat Willie version but still.

wicked · Jan 13, 2023

britwrit said: ↑

Interestingly enough, in the Disney case, Mickey Mouse goes into the public domain next year. Just the Steamboat Willie version but still.
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They have continually changed the copyright law to protect Mickey. Time for another 25-year extension.

dixiehack · Jan 13, 2023

wicked said: ↑

They have continually changed the copyright law to protect Mickey. Time for another 25-year extension.
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But will the GOP play along now that Disney has allegedly caught Teh Woke?

Della9250 · Jan 13, 2023

Anybody able to explain the 43 cent gas increase over the past two days?

MileHigh · Jan 13, 2023

Della9250 said: ↑

Anybody able to explain the 43 cent gas increase over the past two days?
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We have a refinery here that is offline for three months to repair equipment damaged in a super-deep freeze we had here just before Christmas and to work on maintenance to machinery used to make gasoline, diesel, jet fuel and asphalt.

Neutral Corner · Jan 14, 2023

Della9250 said: ↑

Anybody able to explain the 43 cent gas increase over the past two days?
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More like a week here, but yeah.

Della9250 · Jan 14, 2023

Neutral Corner said: ↑

More like a week here, but yeah.
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I filled up for 2.56 on Wednesday and today it spiked to 2.99

Driftwood · Jan 14, 2023

It's been consistently with 2.89 or 2.99 here since the first of the year.
It was in the 2.60s before Christmas.

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The Economy

Songbird Well-Known Member

Azrael Well-Known Member

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The Big Ragu Moderator Staff Member

britwrit Well-Known Member

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Della9250 Well-Known Member

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The Economy

Songbird Well-Known Member

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wicked Well-Known Member

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