XJO - Bear Posts only (Factors which might cause the markets to fall), page-18010

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durmaz

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07/10/24

12:25

Post #: 76007931
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Originally posted by iminvestor101: ↑

i took your advice and bought some bbus at 4.60.

contrary to what you believe, i think the feds cut of .50 now creates an even bigger risk of a polkicy mistake. you say .25 recurring will mean soft landing but the rate of disinflation is plateauing, and as a result imo not tanking enough to justify a definitive trend change in favour of a new easing cycle. there is a real risk that jpow has made a bad gamble by starting the easing cycle with a .50 cut and not a .25 cut. fridays jobs numbers could be the very first signal that the fed could be out of pace with the natural interest rate. and while people can appreciate this could take some time, it risks anchoring inflation and thus capping the velocity of the easing cycle.

throw into the mix that currently, instruments like the sp500 have all of this covid excess and future growth expectations priced in and so a continuation of that would require accelerating growth and thus bring further price pressures, particularly if labour market begins to tighten again as a result of interesting structural changes in demographics such as ageing and greater dependence on big government.

big gov is a big reason why i believe your bulls horns could be blunt at best. the wsj recently wrote an article showing areas classified by government handouts as a percentage of personal income. now i dont remember the article exactly but from around 1970, with a us population of ~203m, the areas where government handouts as a percentage of personal income exceeded 25% were minute. today, those areas with 25% plus government money as a percentage of personal income have skyrocketed, based on the heat map provided and considering a population of ~333m. its clearly a significant increase in per capita government dependency. unless the us continues swiping its credit card, taxes are a real risk to future return expectations. add to that the changes of a higher rate environment and the risk premium on the sp500 starts looking expensive.

that and who knows what the clowns in the ME and other parts of the world willcook up. and they use a lot of oil in that cooking too, further adding uppward pressure to plateauing disinflation.

these are just some musings though which ive just concocted over my medicinal herb while sitting on yallingup beach licking my wounds as fridays us10 surge is going to hurt once i see the update in my portfolio tomorrow.

cest la vie

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you're gonna get rekt .... do you realise markets never crashed before or up to 3 to 4 months after an election in the us.... good luck coz I think your gonna need it

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XJO - Bear Posts only (Factors which might cause the markets to fall), page-18010

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XJO - Bear Posts only (Factors which might cause the markets to fall), page-18010

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