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There is a lot of uncertainty right now with the war, inflation, China’s recent lockdowns, and high energy prices. I think once these items stop being more unce

There is a lot of uncertainty right now with the war, inflation, China’s recent lockdowns, and high energy prices. I think once these items stop being more uncertain we’ll be back on track and growing. Some people think there will be a big recession but I haven’t heard a good argument other than finger pointing at current events.

boringg 4y ago
I think the good argument is that with the very high level of leverage in the market and people spending their money on the assumption of high equity/bitcoin/real estate values - as the fed shuts down access to cheap money and increases interest rates across the economy - those over levered people tip into getting margins-called, repo'ed, write offs to credit card companies and people losing their homes. I hope that isn't the case but that's the argument. The alliterative is inflation getting into double digits and then the fed having to do even more dramatic things such as increasing the federal funds rate to 20% (highest on record). There are some specific things right now but it feels like they aren't large enough to cause the systemic problems just temporary fires.
usrn 4y ago
No. Even with the high immigration rate our population is shrinking. We're about to enter a disintigrative phase. Things are going to get worse and they'll stay that way for quite a while.
boringg 4y ago
I would add that I haven't seen a strong bull case emerge on how we navigate the increased fed rate. My suspicion is most institutional investors and the fed is probably pretty happy with some of the hot air going out of the market as long as they can tame inflation. I think there is real fear at the fed that inflation is moving much faster than they thought and they haven't contained it yet. If it goes up higher than they expect after the big rate jump the market is going to step down again on an asset price basis - and we will move faster into a recession.

boringg 4y ago

I think the good argument is that with the very high level of leverage in the market and people spending their money on the assumption of high equity/bitcoin/real estate values - as the fed shuts down access to cheap money and increases interest rates across the economy - those over levered people tip into getting margins-called, repo'ed, write offs to credit card companies and people losing their homes. I hope that isn't the case but that's the argument. The alliterative is inflation getting into double digits and then the fed having to do even more dramatic things such as increasing the federal funds rate to 20% (highest on record). There are some specific things right now but it feels like they aren't large enough to cause the systemic problems just temporary fires.

usrn 4y ago

No. Even with the high immigration rate our population is shrinking. We're about to enter a disintigrative phase. Things are going to get worse and they'll stay that way for quite a while.

boringg 4y ago

I would add that I haven't seen a strong bull case emerge on how we navigate the increased fed rate. My suspicion is most institutional investors and the fed is probably pretty happy with some of the hot air going out of the market as long as they can tame inflation. I think there is real fear at the fed that inflation is moving much faster than they thought and they haven't contained it yet. If it goes up higher than they expect after the big rate jump the market is going to step down again on an asset price basis - and we will move faster into a recession.