Stock market today

[The-Shoveler]

Yea that’s going to happen.

I think the fed and other PTB will not go gently into the night LOL

China has kind of already proven

He who out prints and out spends wins.

[livinincali]

[quote=The-Shoveler]
He who out prints and out spends wins.[/quote]

No, they create the biggest bubble, which eventually comes crashing down.

[The-Shoveler]

sure, OK.

[spdrun]

Interesting — looks like the Fed is staying the bubble-popping course for now. Keep on keeping on cutting by $10 billion per session regardless what it does to the markets. Question is, would they have been better tapering in September, when the markets didn’t have another 10% extra to fall?

HSBC is down below 52 — if it gets below 45 or 50 without other banks doing same, I might start to worry.

Anyway, what the Fed is doing is commendable. Stock markets and real estate should be driven by the economy at large, not the reverse. Anything else leaves us vulnerable to a crash — the big joke was that 50% of the Phoenix economy consisted of building itself, and when that stopped, what was left?

[The-Shoveler]

“the economy at large” is the question.

That starts to tank, they will start stimulating

[spdrun]

Big unknown as to how, though. Pushing money into speculation diverts it from productive activities. Remember that the Fed tightened and KEPT tightening even after the NASDAQ bubble started deflating in 2000.

Real change needs to come from DC. And possibly from the Fed buying state infrastructure bonds directly — infrastructure investment is one area that’s sorely lacking in the US. Rebuilding it, modernizing it will keep a lot of people employed and help the economy for 50 years to come.

Housing? We have a glut. People willing to play the markets? Samesville.

[livinincali]

[quote=spdrun]Big unknown as to how, though. Pushing money into speculation diverts it from productive activities. Remember that the Fed tightened and KEPT tightening even after the NASDAQ bubble started deflating in 2000.
[/quote]

I think the fed’s committed to completing the taper no matter what happens to the stock market or the economy. Their ego’s are too big and they are slow to act. The economy could enter recession later this year and QE reboot probably wouldn’t come until mid 2015 at the earliest. Even if QE or some other stimulus did come back quickly after the economy declined it will be too late. The confidence in the fed will already be eroded at that point.

Most of the bullish analysts are betting on heads I win tails you lose kind of logic right now. I.e. if the economy does poorly it’s ok to be long because the fed will be there to bail out the market, or it’s ok to be long because the economy is getting better.

[The-Shoveler]

I would like to see something like that.

“infrastructure investment”

completing the train along the 15 would get a lot of cars off the road, or even just completing riverside to San Diego Via OceamSide station (the missing link) would be a massive change for the better for both counties.

(already goes to OC and LA).

[livinincali]

[quote=The-Shoveler]I would like to see something like that.

“infrastructure investment”

completing the train along the 15 would get a lot of cars off the road, or even just completing riverside to San Diego Via OceamSide station (the missing link) would be a massive change for the better for both counties.

(already goes to OC and LA).[/quote]

Additional light rail would be good and hopefully reasonably cost effective. Of course instead we’re going to waste 10 billion dollars building high speed rail between cities in the central valley that don’t make any sense. Of course in today’s world of campaign finance we don’t get good infrastructure investment we get hand outs to campaign contributors to build useless stuff at a massive cost.

[spdrun]

I wasn’t even talking about light or high-speed rail, BTW.

I was talking about that there are thousands of bridges that are ancient and no longer quake/storm/heavy-traffic safe out there.

That it would be lovely if the FREIGHT tracks were electrified with 25kV AC to allow the use of non-fossil power from the grid.

EV charging stations. Massive investment in renewable energy. Desalination plants where there are water shortages (.il has been using them for decades, .san-diego.ca.us is just starting now).

Medium-speed passenger rail where appropriate. Use existing tracks and upgrade them to 100 mph standard for electric tilting trains — it’s a lot faster than driving and cheaper than HSR.

Investment in manned space travel and exploration. We don’t want to be stuck on this rock forever…

[FlyerInHi]

The fed is not ending monetary stimulus. They are just buying less.

Doesn’t seem like we have a lot to worry about.

[CA renter]

[quote=livinincali][quote=The-Shoveler]The ones left holding the bag will be anyone who is holding renminbi (RMB).
They have far far far out printed the whole world.
This is how we are losing the stimulus game LOL
They build infrastructure, we make enemies destroying it.
Turning dollars into smoke, noise and ash.[/quote]

No we are losing the stimulus game because demand is local and supply is global. In addition the stimulus game doesn’t work when you’re already deeply in debt (i.e. Japan). There is no fiscal solution to the too much debt problem we face. The solution is to embrace default and deflation and get back to a point where we can grow the economy again.

Granted that destroys plenty cities and pension funds but that already happened. There’s nothing you can do to change the fact that those plans are unfunded and there’s no way to make good on them. We just haven’t decided to realize that yet.[/quote]

Reducing pension benefits wouldn’t be a problem if we could eliminate all of the speculative price increases in the economy. One of the reasons that benefits have gone up is because costs have gone up so dramatically. Official CPI numbers are absolutely meaningless.

If we could roll everything back to say ~1995 levels — all wealth, income, purchasing power, pension benefits (and contributions), etc. — we would be much better off.

[spdrun]

The fed is not ending monetary stimulus. They are just buying less.
Doesn’t seem like we have a lot to worry about.

The current plan is to cut by $10 bln per meeting, and Yellen’s accession aside, it’s supported by a more conservative set of voting members next month.

I’m not “worried” — I’m actually rooting for some normalization in asset prices. If it nails emerging markets which lived on credit and boomers who used their homes as ATM’s, so be it.

[The-Shoveler]

I must run with a conservative crowd,

I really don’t know a single Boomer who used their home as an ATM (and lost it).

I think it was more an X-gen thing.

“If we could roll everything back to say ~1995 levels — all wealth, income, purchasing power, pension benefits (and contributions), etc. — we would be much better off.”

I really don’t think that is likely to happen.

[scaredyclassic]

1995. what an awesome year. i graduated law school. had well over 100k negative net worth. first son was born. iwas so young and happy. lets roll it all back to 95.

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