My concern is that we have switched from a very bearish outlook to a bullish outlook when the fed has been aiming for a soft landing. A soft landing shouldn't be mistaken for a bullish narrative. I feel like we have gone from a 85%+ chance of a serious recession to a 45%. Personally I think it is much higher. I still haven't seen a solid report of the jobs numbers, but it seems most of these jobs are in service, government and health. None of these three make me feel warm and fuzzy. Service is unlivable wages, government requires debt/taxes and healthcare costs are still way above nominal GDP. None of this screams bullish and instead make for great headlines. A healthy economy should have majority of sectors doing well, not just one specialized sector. The AI boom is starting to feel like the dot com boom and the usual suspects may not fair well. I am still asking what makes Meta so valuable, outside of their potential stock buy back and offering dividends. NVIDIA's net profit is a fraction of its market cap. Money is made it software and finance, not hardware and advertisement. Google is falling behind at a marginal pace. For whatever weird reason, Tesla and Bitcoin still trend together. Short term, Microsoft, Apple and Amazon are the safe plays. And if we are on the subject of AI, I don't hear much from Amazon and Apple. The market is not very clear at this point and I certainly wouldn't have people YOLO'ing into any of this. From here, we get into the macro environment. Biden vs Trump is a massive difference. While I don't fall into TDS, I do believe that dipshit will send the rates to near zero again. If that happens, all bets are off. I expect the world to stable under Trump, not because Trump is the second coming of Jesus, but that he sells long term strategy for short term gain. If Biden gets re-elected, I expect continued pressure from anti-west regimes. And regardless, nobody has a solution for the growing debt-to-gdp. TLDR; Currently there is data going both ways instead of being one way a few months ago.
I think the AI boom is real. Nothing like the dot-com boom with its crazy speculation. Microsoft is already profiting from it. The upside potential is at minimum very solid. The risk is the exceptionally high cost associated with it. Expect the AI market boom to ease up, but it's unlikely to turn negative like the dot-com bubble. (The speed of new AI productization and innovations is unlike anything I've witnessed in the last 25 years).
The job market gain is not confined to one sector; it's much broader, with very healthy wage growth. The story that it's not strong or that it is narrow is not true.
bluntly put, u have no idea what a soft landing is if only you’d identify the data that doesn’t point to a strong economy
Debt-to-gdp at 120%. How many times must I hammer it into your tiny skull that is not a healthy number.
Nobody gives a **** about debt as long as the economy is growing at a steady amount. We're on pace for 4% gdp growth this quarter. What's yalls obsession with debt
just the opposite is true, w Debt at greater than GDP, entities are still more than willing to buy US debt; it underscores the good health the US economy, relative to all others when entities are not willing to buy a country's debt, it points to a weak economy. that is not the case w US debts SG, it apperas that this common sense stuff is above your head !
As to the macro environment, Fortunately, Biden allows the Fed to do its job, and the indications are that the Fed will err on the side of deferring rate cuts and err on the side of taming inflation and letting the economy prove its worth. The idea that Trump will deliver better “stability” or economic results than Biden is hilarious. If you are tying “stability” to Trump, whether approach or results, you need to get yourself checked.
PCE inflation (measures good) is already at the fed target. Waiting for CPI to come down is dumb as housing inflation is getting worse with higher rates. The issue with housing inflation is the lack of supply which will only help when rates come down and builders construct more buildings. Fed needs to cut NOW
that is way above my pay grade. Powell has proven to be a capable Fed chair, as evidenced by his Captain Sully-esque "soft-landing" of the US economy
Maybe it's a bit of all those things? Rates are normalizing and these are the consequences. Things are cyclical over the longer term as I would imagine rates normalizing and government industrial policy/spending means a different type of boom/economy. It would seem the case for a softer landing is a bit stronger as companies downsizing is being buoyed by other companies hiring and expanding. Stock prices aren't probably the best reflection of the economy
Wage growth is still going well and the bottom 40% always feel it first and always have it the worst.
This is such a lie that I see folks spreading. In the 2023 1Q FOMC meeting powell stated intention was creating a recession. The idea that powell engineered a soft landing is bs and not grounded in facts. Powell repeatedly said that his goal was to hike unemployment and get wage gains under control. If it wasn't for bidens legislation that pumped trillions in the economy we would've had a recession by now. Fed deserves zero credit
Bidenomics deserves all the credit to create the demand to grow the economic pie, Powell's part was to reduce the money supply in circulation [derided by the sources of Invisible's false narrative as wrecking the Fed's balance sheet) in order to contain PCE It takes a two-prong attack, fiscal & monetary, to make a soft landing
I understand you believe the Fed is the man behind the curtain, capable of steering the market wherever it needs to go. Personally I view the Fed as maneuvering the Titanic through an iceberg field. They certainly have the best minds behind the curtain, but they can't control unforeseen events. The US economy is tightly interwoven in the global economy and the Fed can't navigate through everything. No, what I stated was Trump will do whatever it takes to light the economy on fire and keep it hot, including dropping rates to near zero.
I am not going to claim I know all things happening in the economy. If the SP493 has marginal growth, the jobs probably aren't coming from there. All I am saying is look deep into those job numbers and it may not look so rosy. Mag 7 having record stock growth and layoffs should raise some flags. If the economy was indeed blister hot, as some keep saying, rate cuts wouldn't be in the discussion. Again, the economy isn't crashing and burning, but signs do suggest we are not in a long term bull market.
We are here debating the state of the economy when there is no credible argument that Biden’s administration has delivered anything other than a P95 to P50 result in the face of difficult inflation and global unrest. @Space Ghost you want to focus on whether the mag 7 run is healthy, whether the right jobs are being created. Given where this country has been in the last few years, one might want to celebrate the improved state of affairs. I mean if you’re going to be objective in any way,
