by Summary:
Very oversold markets will bounce, but conditions are not there for a sustained rally.
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Mike Norman considers the following as important:
This could be interesting, too:
Very oversold markets will bounce, but conditions are not there for a sustained rally.
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
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| Very oversold markets will bounce, but conditions are not there for a sustained rally. |
Well Mike, they think you have to sometimes drain the pool to repair the pool. Another great video.
These rollercoasters are bear market like… Lets see
The flows dont help
Companies hit by this correction, like Peloton, have started talking about layoffs.
Really , Market drops a few points and start laying off workers. That shows you how strong the Companies really are.
@John D Blame investors. Blackwells Capital is the one pushing for this.
Mike, is this officially stagflation? I feel like we are headed back into the 70s
The inflation is temporary, and the economy is growing, so different to the seventies.
@marktlog did u watch the video at all? How about the yield curve? The economy is slowing….globally….particularly as countries start to raise rates. What do you consider temporary….like when does the fed get back to 2% CPI prints?
@Tom S I don't think it's true that there will be global slowdown. There might be slow GDP growth in the US, but countries like South Korea and Taiwan who are major exporters and also running fiscal deficits, will most likely see strong growth.
@Robert South Korea and Taiwan probably represent 2% of world GDP. China is definitely slowing down….still growing at 4% mind you but anything less than 6 is basically considered recession there. US is slowing….100% there is a global "slowdown" occuring but the question is does it lead to recession?
Come on Mike, this is sooooo obvious. This is Wall Street having a stand off with the Fed, akin to the tamper tantrum.
Wanna see supply issues ..Canada truckers
will Tesla ever see $1,200 again?
Not as long as rates go up like they are supposed to.
Thanks for the Mike Norman inflow report . Appreciate it.
Here’s a genuine question for someone. We’ve had trillions of dollars wiped out from market caps. What will people do with the money from stock liquidations? They could either spend it or reinvest in something else. If it’s spent, could be bullish for future earnings.
I’m open to any viewpoint.
@marktlog I clarified my question. I mean what will people do with the money after liquidating their stocks.
@marktlog A logical lifecycle of money liquidated out of the stock market could be that the money is spent and goes to earnings which then go to salaries which then go to 401k accounts and back to stocks.
Since prices are bid up with either savings or margin on savings, I don’t think your example really applies either. There was enough credit+money to sustain a certain price level at some point. That should be doable again. I guess this is why Mike is saying draining of savings is so bad.
Not 100% sure about this though 🤔
It probably depends but most will just be in cash. If you take a legit investor like Warren Buffet he is holding 150 billion in cash waiting for the next opportunity. Some might buy less risky assets like bonds instead. I doubt many would spend their portfolio on consumer goods however so you wont really.get the effect you talk about with this money flowing into corporation's revs
@Tom S It's hard to say. $150B is like 35% of the Berkshire portfolio, which is a reasonable percentage of liquid assets. If money goes to safe assets like bonds, yields go down and people will seek higher yielding stocks.
Also, the money doesn't have to be spent on consumer goods to appear back in earnings/dividends. If money goes into new home constructions that money appears in home builder earnings. The money could be invested in a new business that grows wealth for those involved.
It seems like most roads for money lead back to public corporate stocks either directly or indirectly.
@Robert @Robert how many people have liquidated a part, or all of their portfolio, to put that money toward "home construction". I suppose that could happen in some unique cases but the guy asking the question was suggesting that people liquidating their portfolios would somehow ultimately be bullish for companies because now all these people have money to spend and boost corporate earnings. This clearly does not happen
Its been a year since I got you notification
How can we have a surplus when we are 29 Trillions in Debt.
Debt is the total value of the money that the gov has created thru deficit spending.
@Jari Rutanen Thanks for clearing that up. I know the US is not running a surplus or balance budget as stated in the video. Otherwise, why would we be borrowing money. We have not had a balanced budget since Clinton and I suspect that was smoke and mirrors and shady accounting. Thanks for the reply.
@John D , actually there is no borrowing at all: It is basic mmt: Gov spending creates money and taxation destroys money. The surplus money is saved in treasuries by banks and (pension)funds. In other words treasuries are gov created money that pays interest. Treasury issuance (i.e. "borrowing") an unnecessary in a fiat system and just a relic from the gold standard. The interest could be paid directly to the excess reserve accounts of the banks.
@Jari Rutanen Interesting, Makes me wonder why we have to pay Federal income taxes if Gov can just print money out of thin air, or create it on computers with a push of a few buttons. Thanks for the reply
@John D , you are welcome! "Taxes drive money" i.e. generate forced demand for gov money. Taxes can also be used to diminish income inequality and punish harmful behaviour like pollution. The basic function of taxation is for the state to provision itself with the goods from the private sector. A plain english description of mmt is in Stephanie Kelton's book "The deficit myth".
premarket mmt man premarket hahahahahah
People were not dying like crazy. You can pull up a few trucks to hospitals around a big city and take out a bunch of courpses that died for all kinds of reasons. At any time of the year, you can stage that pandemic. U can even load bagpacked dolls for that matter. Wealth transfer!
Negative change cannot be ignored.