Bull Market officially over!! Year heading negative.

[Rasulis]

Are you talking about the Dot Com Bubble?

Yes. The one that Fed responded by slashing benchmark rate from 6.5% to 1%, and kept it there for 12 months. It also printed $125 billion, boosting the monetary base 19%.

[Breccia]

Yes. The one that Fed responded by slashing benchmark rate from 6.5% to 1%, and kept it there for 12 months.

I'm 87% certain I posted a picture of an inverted yield curve then, too. But even if I didn't the dot-com bubble bursting is hardly long-lost history.

Also, Investopedia has a recent article comparing now to then.

During the course of the Dotcom Crash, which ran from March 2000 to October 2002, the Nasdaq Composite Index (NDX) plummeted by 78%, and the S&P 500 Index (SPX) shed 49% of its value. This severe bear market decline in stock prices was already underway when the U.S. economy slipped into a recessionary contraction that lasted from March to November of 2001.

Erik Ristuben notes that the stock market historically is a fairly reliable predictor of an impending recession. While not every significant decline in stock prices has been followed by a recession, he adds that every recession in recent history has indeed been preceded by a stock market selloff. Since World War II, he finds that, on average, a U.S. recession has begun six months after a market peak, and never longer than 12 months thereafter. The Stock Market Crash of 1987 is a notable example of a bear market decline that neither was triggered by a recession, nor preceded one.

Based on his reading of history, and given the 14% drop in S&P 500 during the final quarter of 2018, Ristuben expects the next recession to begin by 2020. But, he expects it to be "very mild," similar in length and depth to the eight-month contraction in 2001, which occurred in the midst of the Dotcom Crash.

Looking forwards to the next rabid fanbase mating cry being "Trump only led us into a mild recession!"

[Rasulis]

I'm 87% certain I posted a picture of an inverted yield curve then, too. But even if I didn't the dot-com bubble bursting is hardly long-lost history.

Also, Investopedia has a recent article comparing now to then.



Looking forwards to the next rabid fanbase mating cry being "Trump only led us into a mild recession!"

This time we are prepared to take advantage of the next downturn. My wife and I already have a shopping list for the next stock market crash. Adobe, Church & Dwight (the people that makes Arm & Hammer), Danaher, Roper, Ecolabs, Nike, Apple, Alphabet, Ulta Beauty (My wife’s pick. Not mine) and UnitedHealth (I have mixed feeling about this one).

[Zan15]

Are..are we going to WebMD ourself into a stock market crash?

But never fear, Trump has the solution: if short- and long-term bonds aren't behaving, it's time to add ultra-long bonds!

"Har har. What's the real solution?"
Treasury Secretary Steven Mnuchin said issuing ultra-long U.S. bonds is “under very serious consideration” in the Trump administration, possibly setting up a move that would mark a historic revamp of the $16 trillion Treasuries market, Bloomberg News reports.

“If the conditions are right, then I would anticipate we’ll take advantage of long-term borrowing and execute on that,” Mnuchin said Wednesday in an interview with Bloomberg News’s Saleha Mohsin in Washington. He said officials held a meeting earlier in the day to review the possibility.


"How...will this help?"

It's the same idea as Trump's climate change policy, basically. Sweep the problem under the rug for 50 to 100 years, and let them deal with it. The rates would have to be higher to convince people to buy something that long-term, which I doubt individuals would do but investment companies might. Personally, if I'm worried that the US govt is spending poorly and turning the debt up to 11, I'm not sure I'm buying long-term anything. This looks like a desperate attempt to get a quick boost of cash into the federal budget, to pretend the deficit you signed multiple times isn't your fault. It won't work.

lol and SS will invest trillions in something that earns no interest.....or even negative...…

Nothing like baby boomers passing even more to their kids and kids kids.....

- - - Updated - - -

Yes. The one that Fed responded by slashing benchmark rate from 6.5% to 1%, and kept it there for 12 months. It also printed $125 billion, boosting the monetary base 19%.

The dot com really has very little comparison to our current market.

That bubble was caused by hundreds of companies that became billion dollar companies with next to no revenue and no projected earnings for infinity. You even had oodles of companies that were 10b+.

There is way more comparison to 1929 and dot com with the general public borrowing heavily to gamble on the stock market. Not to mention billion dollar companies having to borrow hundreds of billions just to pay their bills.



Once the market crashed, the economy imploded upon itself.

- - - Updated - - -

welp Last month Trumps GDP numbers for 2018 was revised down from 2.9% to 2.6%

Last week his employment numbers were revised down 540,000 for 2018.

Now his 2nd Q GDP is revised down to 2.0% from a poor 2.1%.


Not looking good for trump to hit that 3-4-6% he promised

[Dontrike]

Not looking good for trump to hit that 3-4-6% he promised

The fact Trump tried to hit 4% by shooting up the economy with these tax cuts like their steroids and he still couldn't get close to it shows this man doesn't know shit about business or the economy.

[Captain N]

The fact Trump tried to hit 4% by shooting up the economy with these tax cuts like their steroids and he still couldn't get close to it shows this man doesn't know shit about business or the economy.

Ya know I'm starting to wonder if all these major corporations who have benefited from the tax cuts are making a futile attempt to bolster Trump's numbers by laying off as many people as possible. I know it's a hypothetical but I can't remember (in recent memory) so many people being let go from jobs at once with the exception of the 2008 Recession.

[Breccia]

he still couldn't get close

In an earlier post, I showed that, if the CBO's predictions about 2.3% 2019 and 1.8% 2020 are correct, Trump's average GDP growth will be slightly lower than Obama's second term. The downtick just made that more likely.

Trump ran against Obama being the worst Pre...there's got to be an exact quote around here somewhere.

Q2 GDP Up 2.1% Not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck. Almost no inflation. USA is set to Zoom!

No...

Watch those GDP numbers. We started off at a very low number, and right now we hit a 3.2 (percent). Nobody thought that was possible

We rate this statement False.

We just announced that we hit 3% in GDP, it just came out. On a yearly basis, as you know, the last administration, during an eight year period, never hit 3%. So we’re really on our way. If we achieve sustained 3% growth, that means 12 million new jobs and $10 trillion of new economic activity over the next decade. That’s some numbers.

Closer...

We're bringing it (the GDP) from 1 percent up to 4 percent. And I actually think we can go higher than 4 percent. I think you can go to 5 percent or 6 percent.

HAH. No, that's too far. That was the Las Vegas Presidential debate. Promised the nation on live TV. But he backed off that after being elected, and it's around here somewhere...

We are looking at 3 percent, but we think it could be 5 or even 6

There we go. Welcome to 2016, when Trump wasn't in charge yet:

Many of Wall Street’s top economists aren’t seeing the booming growth that President-elect Donald Trump expects from his administration’s policies.

A CNBC survey of 13 top Wall Street economists finds the average forecast for next year rising from an estimated 1.7 percent this year to just 2.3 percent next year, and to 2.5 percent in 2018. That’s below what candidate Trump said his economic plans could generate when he unveiled them in September.

“We are looking at 3 percent, but we think it could be 5 or even 6,” the president-elect said.

The reasons economists don’t agree with the strong growth forecasts range from simply not having enough detail to model the effects, to the belief that Trump will get only a portion of what he’s proposing from Republicans in Congress.

Say, Wall Street economists, how did 2017 and 2018 actually do? 2.2 and 2.9 huh? So, Trump -- who didn't get 6 or 5 or 4 or even 3 -- got 0.4% over what economists predicted, due to his policies.

Obama is the first president in modern history not to have a single year of 3 percent growth

-- Trump, almost telling the truth

Trump's about to be the second.

For more on the topic, read The Trump economy is starting to look more and more like the Obama economy and/or
Fact check: How the Trump administration is spinning economic growth numbers and/or Top White House economist says Trump's GDP and unemployment claim was wrong or any of the literally hundreds if not thousands of articles that show, objectively, that Trump promised something he did not provide.

My favorite is Economic Growth Has Reached 3 Percent for the First Time in More than a Decade Thanks to President Donald J. Trump’s Policies which the White House can't legally take down, I think, and is forever a testimony to Trump's legacy: failure painted with lies.

- - - Updated - - -

Ya know I'm starting to wonder if all these major corporations who have benefited from the tax cuts are making a futile attempt to bolster Trump's numbers by laying off as many people as possible.

No.

They're laying off people because it's economically advantageous to do so. We've seen enough business CEO's and groups begging Trump to take off the tariffs, and he's not budging. They owe him nothing.

[jeezusisacasual]

I am not that fearful of automation and similar plans due to our current economic outlook but an ex-coworker sent me this article to read and it has some real ideas but i am not the most knowledgeable on the problems outside of my time doing analyst work for a Union.

https://www.washingtonpost.com/us-po...will-be-ready/

TLDR the coming recession will increase the amount of automated services etc. I have long supported people constantly increases their skills to adapt to an ever evolving job market. For instance while i have a masters in finance i am looking at expanding my education to another field perhaps education.

Also Best Buy today was a nasty hit which further pushes the idea that retail is in the toilet. I am not very hopeful for the rest whom report this week either.

[Breccia]

Also Best Buy today

What? Not Best Buy! I like those guys!

Consumer electronics retailer Best Buy (BBY) on Thursday beat Wall Street's target for earnings in its fiscal second quarter, but came up short on sales. Its full-year guidance also missed views. The Best Buy earnings report sent BBY stock reeling.

The Richfield, Minn.-based company earned an adjusted $1.08 a share on sales of $9.54 billion in the quarter ended Aug. 3. Analysts expected Best Buy earnings of 99 cents a share on sales of $9.57 billion, according to Zacks Investment Research. On a year-over-year basis, Best Buy earnings rose 19% while revenue climbed 2%.

For the current quarter, Best Buy expects to earn an adjusted $1.03 a share on revenue of $9.7 billion. That's based on the midpoint of its guidance. Analysts were looking for Best Buy earnings of 96 cents a share on sales of $9.82 billion, Zacks said.

For the full year, Best Buy guided to adjusted earnings per share of $5.68 on revenue of $43.35 billion. Wall Street predicted Best Buy earnings of $5.75 a share on revenue of $43.68 billion, Zacks said.

Best Buy is one of the leading American tech retailers. Those numbers aren't crippling, but if they're having trouble, it's not just them.

Hopefully the holiday season has some better news.

[jeezusisacasual]

What? Not Best Buy! I like those guys!





Best Buy is one of the leading American tech retailers. Those numbers aren't crippling, but if they're having trouble, it's not just them.

Hopefully the holiday season has some better news.

Yea i posted earlier that i was somewhat optimistic due to the scale and size of their operations in the nation. I figured they would be the one retailer who would have seen some growth but alas that was a big fat ass no. Oh yea they are not crippling but this will push higher and higher expectations on the holiday season which i am wondering if it will stagnate or not meet expectations.

[Rasulis]

These are the most important sectors of the stock market. Not because of the market caps which combined is much smaller than tech or finance. But because of what these sectors represent – American consumers confidence in the economy. When these crash, that's when we are going to see a really bad recession.

[Breccia]

I wonder if anyone mentioned the DOW going neg--

Something has the markets spooked...
Could it be consumer confidence dropping to 2012 levels? Could it be that data is indicating that the next round of tariffs might be enough to push out consumers? Or could it be Trump opening his big fat mouth?
https://www.cnbc.com/2019/08/30/us-c...019-final.html

Kaelleria-ninja'd!

Until recently, consumer confidence was very high, for reasons I'm honestly not sure about. A massive drop, putting them back in line with the economic situation, was "when" not "if". For it to happen all at once...well, August hasn't been a great month, has it?

[Zan15]

These are the most important sectors of the stock market. Not because of the market caps which combined is much smaller than tech or finance. But because of what these sectors represent – American consumers confidence in the economy. When these crash, that's when we are going to see a really bad recession.

LOL YTD results after the worst dec drop in 85 years.

Throw just one more month in there and poof goes your entire chart showing anything but a flat to down result

[Vash The Stampede]

People always talked about the impact of the 2008 recession, but most people barely remember the 2000 recession. Yet, in term of absolute dollar, the 2000 recession financial losses were bigger than the 2008 recession.

The difference between the Dot Com Bubble and 2008 was that people lost homes in 2008 while investors lost money in 2000. The 2008 recession hit much closer to home than 2000.

It was brutal. My wife and I were heavily invested in the market. Our portfolio and retirement accounts values were at least halved. We were putting money into the accounts and they were still going down. Oracle was not the only one. Everybody were in the same position, Apple, Microsoft, Google, Intel, Amazon, etc.

Stock market working as intended. People who buy stocks get to deal with the failures of a company while the company walks away just fine, maybe even richer. Of course you get to also benefit from the companies success as well. The idea of the stock market is that companies get money they need to expand but most business ventures tend to fail, and if you borrowed money from the bank and your business fails then you're in deep shit. A stock though gives you all the benefits of getting money without needing to pay it back.

So that part was bad. However, what was the impact to people’s daily lives?

Surprisingly minimal. Output only shrank for two, non-consecutive quarters, and in each the rate of contraction was barely over 1%. The nation’s unemployment rate never got above 5.9% during the recession. San Diego was booming because of the start of the housing boom in California. My wife is a real estate broker, and back then she was making money like crazy. My firm had a contract with a local agency to perform engineering and testing services for Developer’s projects that encroach within their right-of-way. Our billing on that single as-need contract was around $1M per year between 2001 and 2006. We did many public work projects that were funded entirely by developers. We billed the agencies, and the agencies billed the developers.

The Dot Come Bubble Pop was not a recession. That's like saying the Black Dildo market is failing so therefore there's a recession. We would call it the Black Dildo Anal bust.

The 2008 recession was a different story. It had minimal impact to the tech sector which we were heavily invested in. In fact, that was the start of the rapid rise of the tech sector. However, if you were invested in the financial sector, then you are shit out of luck.

I personally believe the 2008 recession was not caused by the housing market but because a lot college graduates can't find good paying jobs. The banks took advantage of what they thought was a booming economy and gave out a lot of bad loans thanks to George Bush's administration who deregulated the banking industry. Meanwhile the good paying jobs were leaving the country and they brought in workers from other countries under temporary visa's. It wasn't just the housing market that was going bad.

Given a choice, a recession caused by the stock market collapse is actually one of the better scenario.

Make no mistake, we're still in the 2008 recession. What got fixed since 2008, lower unemployment? Now we have people working in Walmart, Amazon, FedEx, UPS, and etc. Sure people have jobs but those people are getting paid jack for those jobs. To make matters worse inflation still continues to climb and rent nearly doubled since 2008. So most American's put more than half of their pay towards rent, while the rest goes towards food and basically staying alive. God forbid you get sick and don't have health insurance.

What has been happening lately is that people have reached max debt and are no longer able to afford things like a Playstation 5 or a black dildo. Sales are down all over but isn't reflected in stock market because of stock buy back. Smart phone sales are down, Semi-conductor sales are down, and of course auto sales are down. So what's holding up their stocks?

The worst part is when the stock market does crash the companies will most likely replace people with robots to do their jobs because they'll do anything for short term profits.

[jeezusisacasual]

The difference between the Dot Com Bubble and 2008 was that people lost homes in 2008 while investors lost money in 2000. The 2008 recession hit much closer to home than 2000.

Stock market working as intended. People who buy stocks get to deal with the failures of a company while the company walks away just fine, maybe even richer. Of course you get to also benefit from the companies success as well. The idea of the stock market is that companies get money they need to expand but most business ventures tend to fail, and if you borrowed money from the bank and your business fails then you're in deep shit. A stock though gives you all the benefits of getting money without needing to pay it back.

The Dot Come Bubble Pop was not a recession. That's like saying the Black Dildo market is failing so therefore there's a recession. We would call it the Black Dildo Anal bust.

I personally believe the 2008 recession was not caused by the housing market but because a lot college graduates can't find good paying jobs. The banks took advantage of what they thought was a booming economy and gave out a lot of bad loans thanks to George Bush's administration who deregulated the banking industry. Meanwhile the good paying jobs were leaving the country and they brought in workers from other countries under temporary visa's. It wasn't just the housing market that was going bad.

Make no mistake, we're still in the 2008 recession. What got fixed since 2008, lower unemployment? Now we have people working in Walmart, Amazon, FedEx, UPS, and etc. Sure people have jobs but those people are getting paid jack for those jobs. To make matters worse inflation still continues to climb and rent nearly doubled since 2008. So most American's put more than half of their pay towards rent, while the rent goes towards food and basically staying alive. God forbid you get sick and don't have health insurance.

What has been happening lately is that people have reached max debt and are no longer able to afford things like a Playstation 5 or a black dildo. Sales are down all over but isn't reflected in stock market because of stock buy back. Smart phone sales are down, Semi-conductor sales are down, and of course auto sales are down. So what's holding up their stocks?

The worst part is when the stock market does crash the companies will most likely replace people with robots to do their jobs because they'll do anything for short term profits.

Oh i posted earlier about the spike in automation from a washington post article and i think the next recession will speed it up in drastic fashion. I am also looking into the Copper/ Iron market as they are other decent indicators on a global scale but we also know that the global economy is on a tilt. Also something to be said about the 2008 recession is that the majority of Americans have not recovered to their household value to what it was before the 2008 recession but that is to be expected with wage stagnation and the rise of the gig workforce.

I still think that the best way to improve the bottoms lot is to index the min. wage to inflation on a state by state basis instead of a nation wide flat rate increase, they could use metrics they already have to figure out how much it would be per state etc. I will speak more on this once i am settled in my new home.

[Vash The Stampede]

I still think that the best way to improve the bottoms lot is to index the min. wage to inflation on a state by state basis instead of a nation wide flat rate increase, they could use metrics they already have to figure out how much it would be per state etc. I will speak more on this once i am settled in my new home.

I don't agree with this since products aren't priced by a state by state basis. Also by adjusting the minimum wage based on the state where you live you prevent people from moving out of that state, or make things worse by going by county by county. A $15 minimum wage for the entire USA would be the best solution, but then you'd need to deal with small business who can't pay those wages. We need to attack rent because businesses pay a lot for rent. Best thing to do is increase taxes for the 1% while also lowering taxes for the middle class and poor. That alone won't solve the rent issue, so we ultimately need a Universal Basic Income. That way people can move into mostly empty areas like Wyoming and spread out more, thus forcing renters to lower prices. Rent stabilization law like what NYC implemented recently would also go a long way as well.

Bottom line there isn't a magic bullet that'll fix this economy. Even if we were to increase the minimum wage and fix rent costs, we still have millions of people with high debt they'll never shack off. The list of problems are endless, and the only solution is to do what Obama failed to do and that's put the burden of this recession on the 1%. Get money out of politics so that these people can stop influencing our democracy. Just so many problems that need solving.

[Rasulis]

Talking about giants of the past, Schlumberger stock is now below what it was during the 2009 crash.



Haliburton is just short of that.



Philadelphia Energy Solutions LLC, owner of an oil refinery that supplies more than a quarter of the U.S. east coast’s crude refining capacity, filed for bankruptcy with a plan that could allow it to shed some environmental costs.

Shale-oil driller Halcon Resources filed for pre-packaged Chapter 11 bankruptcy in Houston. About 67.3% of the holders of its unsecured notes got a haircut of $750 million. This was Halcon’s second bankruptcy filing in three years.

In July, it was oilfield services giant Weatherford International that filed for pre-packaged Chapter 11 bankruptcy in Houston.

Eight oil companies have declared bankruptcy this year.

Fun year. The once mighty oil and gas industry is now down to almost only 2% of the stock market.

The question becomes why do people keep investing and lending money? Because oil companies pay high dividend yield. Schlumberger pay 6.1% dividend yield and Haliburton 4%. Which are much higher than the 2.2% average dividend yield of S&P 500 companies. BTW, Schlumberger current dividend payout is larger than its net revenue. Chew on that for a second.

As for why banks still lend them money? Because they get to charge 10% plus interest rate. Why loan money to homeowners for 3-4% when you can get 10% plus.

[jeezusisacasual]

I don't agree with this since products aren't priced by a state by state basis. Also by adjusting the minimum wage based on the state where you live you prevent people from moving out of that state, or make things worse by going by county by county. A $15 minimum wage for the entire USA would be the best solution, but then you'd need to deal with small business who can't pay those wages. We need to attack rent because businesses pay a lot for rent. Best thing to do is increase taxes for the 1% while also lowering taxes for the middle class and poor. That alone won't solve the rent issue, so we ultimately need a Universal Basic Income. That way people can move into mostly empty areas like Wyoming and spread out more, thus forcing renters to lower prices. Rent stabilization law like what NYC implemented recently would also go a long way as well.

Bottom line there isn't a magic bullet that'll fix this economy. Even if we were to increase the minimum wage and fix rent costs, we still have millions of people with high debt they'll never shack off. The list of problems are endless, and the only solution is to do what Obama failed to do and that's put the burden of this recession on the 1%. Get money out of politics so that these people can stop influencing our democracy. Just so many problems that need solving.

I am leaving Wyoming and i was born and raised here ( right outside of Cheyenne ) with that being said more people need to utilize the land we have. I think a UBI would be a great idea given the situations in which it is used and how it is used. When you want everything at once you get nothing at all either and is a lesson that should be understood. I agree with alot of the problems and the solutions to them but it will take years upon years to undo the systemic bullshitery that was caused before the majority of us were born, similar to baseball its not a race its a marathon.

[Vash The Stampede]

I am leaving Wyoming and i was born and raised here ( right outside of Cheyenne )

Wyoming was picked because it's the 10th largest state with the lowest population. Something like half a million people. Tiny little New Jersey here has nearly 9 million people.

I think a UBI would be a great idea given the situations in which it is used and how it is used. When you want everything at once you get nothing at all either and is a lesson that should be understood. I agree with alot of the problems and the solutions to them but it will take years upon years to undo the systemic bullshitery that was caused before the majority of us were born, similar to baseball its not a race its a marathon.

If we take too much time to fix these things then it'll just get worse and become a bigger problem to fix. Like the Irish Potato famine where the government ignored the situation and just called the people lazy. The symptoms of the recession can be felt from the lack of children being born, and the abuse of opoiods people take, and the recent mass shootings we're seeing. People are clearly depressed and stressed out and need relief. The issue with solving this problem is that we need the stock market to go fuck itself, because implementing things like Medicare for All, a UBI, and higher taxes on the wealthy to pay for all this will not do the stock market any favours. Unemployment rates will go up with something like a UBI as some people will quit their shitty jobs. The healthcare industry will be ruined once a Medicare for All is implemented. If we only look at employment and the stock market to determine the economy then we're looking at a very narrow part of the economy.

[Kokolums]

It is possible that the yield curve no longer works as a signal.

The reason is the following. It used to be that the Fed only controlled short term interest rates. Long term yields were left to the free market. So seeing long term yields fall below short term yields became a recession indicator because it usually meant smart money was locking in long term yields now at any cost because smart money knew a recession was on the way.

However, under the Obama administration we got something NEW called QE (quantitative easing). Basically, under Obama we drove short term interest rates to zero and held them there for YEARS (which never happened before). It was MAX stimulus to keep the economy going under Obama. And that wasn't enough. So they created this new program called QE. QE is where the Fed buys long term bonds and other securities for the express purpose of driving down interest rates on the long end and thus create liquidity. Furthermore, banks in the EU have been doing the same. So the ENTIRE yield curve now gets manipulated because the short term rate hit zero.

So that throws into question what the inverted yield curve really means anymore. The entire thing gets manipulated. The EU could manipulate its long term yields too low and that could drive buyers to devour US long term yields. That could invert the yield curve but it wouldn't signal a recession.

We're kinda in new territory. Linking to a study that says the inverted yield curve has been correct x number of times doesn't really apply because the rules changed under Obama.