Doc Posted June 21, 2022 Share Posted June 21, 2022 21 minutes ago, Irv said: Yank has no shot. They’re going to trot Hillary out there. What a mess. I meant last election. And Hilly? LOL! I hope they do. Link to comment Share on other sites More sharing options...
The Frankish Reich Posted June 21, 2022 Share Posted June 21, 2022 (edited) Your ECON 101 exam: The top line is the S&P 500 since Biden's inauguration. - 3% The middle line is the EAFE since Biden's inauguration. - 18% The bottom line is EEM since Biden's inauguration. - 28% Discuss. Extra Credit: Do the same for gas prices in the USA vs. Europe vs. Japan vs. Emerging Markets. Extra Extra Credit: Do the same for inflation rates. Edited June 21, 2022 by The Frankish Reich Link to comment Share on other sites More sharing options...
All_Pro_Bills Posted June 21, 2022 Share Posted June 21, 2022 (edited) 10 hours ago, The Frankish Reich said: Your ECON 101 exam: The top line is the S&P 500 since Biden's inauguration. - 3% The middle line is the EAFE since Biden's inauguration. - 18% The bottom line is EEM since Biden's inauguration. - 28% Discuss. Extra Credit: Do the same for gas prices in the USA vs. Europe vs. Japan vs. Emerging Markets. Extra Extra Credit: Do the same for inflation rates. On face value it might be concluded the US economy is doing "better" than the rest of the world. And that may be correct. The cleanest pig in the mud hole scenario. But the more important question on the price movements of the market indexes is "why" rather than "what". For me it boils down to interest rate decisions by various central banks and the relative changes in currency values and pairings. Most notably the US dollar vs. <other currencies> and the impact of economic sanctions as a result of the Ukraine war. The majors, the Euro, the Yen, the British Pound to mention a few are getting pummeled. The DOJ executed a market intervention overnight which only caused the Yen to sink further. These moves imply "money" coming out of these currencies and "into" the US dollar. Which partially explains the US markets over-performance. As the fed increases rates the Emerging Markets typically get hit the hardest. Most international loans are costed in dollars but they earn local currency on domestic sales. When the local currency falls it takes more local 'units" of currency to service borrowing. Professional investors normally flee these markets first. So crash, bang, boom goes their markets. The curious thing is one currency outperforming the US dollar is the Russian Ruble. Which for me implies the sanctions seeking to punish Russia are not working and are punishing allies and non-aligned countries more by sucking the life out of their economies and markets. A logical action might be to stop. But I'm not expecting that to happen anytime soon. My expectation is US Q222 GDP will print negative and given Q122 was negative the standard criteria of two consecutive quarters of negative GDP indicates a recession will be met. I don't know what these economists are talking about when they say they expect a recession in 2023 or 2024. Its here now. The fundamental question is how far is the Fed willing to go higher with interest rates and how high is high enough to blow everything up? My expectation is not much higher. Every one percent rise in rates adds about $300B to the annual interest expense on the US debt. So how is that going to be accounted for in the annual budget? Raise taxes? Doubtful. Cut spending somewhere else? Unlikely. Print more money? Winner! More inflation, higher unemployment, less output! I expect ultimately we're headed for an inflationary depression. One thing I've been accumulating lightly are larger capitalization gold and silver royalty and streamers like Franco-Nevada, Wheaton, and Royal Gold as I expect gold will be going much higher and these stocks will see capital gains along with generous dividend payments. Edited June 21, 2022 by All_Pro_Bills 1 Link to comment Share on other sites More sharing options...
The Frankish Reich Posted June 21, 2022 Share Posted June 21, 2022 36 minutes ago, All_Pro_Bills said: On face value it might be concluded the US economy is doing "better" than the rest of the world. And that may be correct. The cleanest pig in the mud hole scenario. But the more important question on the price movements of the market indexes is "why" rather than "what". For me it boils down to interest rate decisions by various central banks and the relative changes in currency values and pairings. Most notably the US dollar vs. <other currencies> and the impact of economic sanctions as a result of the Ukraine war. The majors, the Euro, the Yen, the British Pound to mention a few are getting pummeled. The DOJ executed a market intervention overnight which only caused the Yen to sink further. These moves imply "money" coming out of these currencies and "into" the US dollar. Which partially explains the US markets over-performance. As the fed increases rates the Emerging Markets typically get hit the hardest. Most international loans are costed in dollars but they earn local currency on domestic sales. When the local currency falls it takes more local 'units" of currency to service borrowing. Professional investors normally flee these markets first. So crash, bang, boom goes their markets. The curious thing is one currency outperforming the US dollar is the Russian Ruble. Which for me implies the sanctions seeking to punish Russia are not working and are punishing allies and non-aligned countries more by sucking the life out of their economies and markets. A logical action might be to stop. But I'm not expecting that to happen anytime soon. My expectation is US Q222 GDP will print negative and given Q122 was negative the standard criteria of two consecutive quarters of negative GDP indicates a recession will be met. I don't know what these economists are talking about when they say they expect a recession in 2023 or 2024. Its here now. The fundamental question is how far is the Fed willing to go higher with interest rates and how high is high enough to blow everything up? My expectation is not much higher. Every one percent rise in rates adds about $300B to the annual interest expense on the US debt. So how is that going to be accounted for in the annual budget? Raise taxes? Doubtful. Cut spending somewhere else? Unlikely. Print more money? Winner! More inflation, higher unemployment, less output! I expect ultimately we're headed for an inflationary depression. One thing I've been accumulating lightly are larger capitalization gold and silver royalty and streamers like Franco-Nevada, Wheaton, and Royal Gold as I expect gold will be going much higher and these stocks will see capital gains along with generous dividend payments. Thanks for the intelligent/informed comment. I think I agree with everything you said. I do continue to hold some gold (about 5-7% of my portfolio combined, both in the “already mined” ETFs and in the “still underground” gold mining corps) because I agree that the Fed will soon lack the will to go full Paul Volcker this time around. Link to comment Share on other sites More sharing options...
T&C Posted June 21, 2022 Share Posted June 21, 2022 On 6/20/2022 at 9:06 AM, Irv said: I won't stoop to your level and call you names. Demented Joke Biden's record: Stock Market FAIL! Inflation FAIL! Crime FAIL! Gas Prices FAIL! Supply Chain FAIL! Ukraine FAIL! Afghanistan FAIL! Iran FAIL! North Korea FAIL! China FAIL! Border FAIL! Energy Policy FAIL! COVID FAIL! Race Relations FAIL! Baby Formula FAIL! Build Back Better FAIL! Labor Shortages FAIL! Hunter FAIL! Supreme Court Appointment FAIL! Transgender Athletics FAIL! 2022 Midterms FAIL! What a mess. You left out bicycle riding. 2 Link to comment Share on other sites More sharing options...
Irv Posted June 22, 2022 Author Share Posted June 22, 2022 (edited) 21 hours ago, T&C said: You left out bicycle riding. Right! Updated list: Stock Market FAIL! Inflation FAIL! Crime FAIL! Gas Prices FAIL! Supply Chain FAIL! Ukraine FAIL! Afghanistan FAIL! Iran FAIL! North Korea FAIL! China FAIL! Border FAIL! Energy Policy FAIL! COVID FAIL! Race Relations FAIL! Baby Formula FAIL! Build Back Better FAIL! Labor Shortages FAIL! Hunter FAIL! Supreme Court Appointment FAIL! Transgender Athletics FAIL! 2022 Midterms FAIL! Saudi Foreign Relations FAIL! Bicycle Riding FAIL! Picking a Press Secretary FAIL! Picking a Cabinet FAIL! Reading a Teleprompter FAIL! Speaking Coherently FAIL! Completing a Full 40-Hour Work Week FAIL! Following Instructions From Whoever is Running The Executive Branch FAIL! Edited June 22, 2022 by Irv Link to comment Share on other sites More sharing options...
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