Economics

[Wild Bill]

Just put $10,000 into an ETF. Should make about $300 on the correction tomorrow.

May be a bit early.

 

[Whiskeyjack]

Cass has been addressing his critics on Twitter all week. This thread is especially worth reading:

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Discussion seems to have moved on from plainly wrong analysis by "<a href="https://twitter.com/CaptainTako?ref_src=twsrc%5Etfw">@CaptainTako</a>" to this new chart.<br><br>This at least, as far as I can tell, has accurate data in it. But positing it as a refutation of COTI is downright cruel. Let's take a look at what it's actually saying... <a href="https://t.co/gt21ekWxlG">https://t.co/gt21ekWxlG</a></p>— Oren Cass (@oren_cass) <a href="https://twitter.com/oren_cass/status/1232115140453175296?ref_src=twsrc%5Etfw">February 25, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

 

[Ndaccountant]

Just another piece of information to add in....the emotional well being of stay at home mom's versus working moms. Interesting that this extends across all income levels, though economic pressure surely contributes to the bottom income levels.

In total, I don't think for all women (or even most) that staying at home is the best thing for them.

https://news.gallup.com/poll/154685/stay-home-moms-report-depression-sadness-anger.aspx

Summary:

Stay-at-home moms at all income levels are worse off than employed moms in terms of sadness, anger, and depression, though they are the same as other women in most other aspects of emotional well-being. Employed moms, however, are doing as well as employed women without children at home -- possibly revealing that formal employment, or perhaps the income associated with it, has emotional benefits for mothers.

However, low-income stay-at-home moms are struggling the most. Many in this group are likely staying home out of economic necessity rather than by choice, and they likely feel pressure from tight finances and the demands of motherhood. Even stay-at-home moms who are not looking for work are worse off emotionally than are their employed counterparts -- suggesting there may be other issues related to their higher levels of sadness, anger, and depression.

While many mothers are rightfully dedicated to parenting as an important and fulfilling vocation, those who desire to work should feel encouraged by these data to pursue it. And for those who choose to stay home, more societal recognition of the difficult job stay-at-home mothers have raising children would perhaps help support them emotionally.

Of course, for stay-at-home moms who wish to pursue employment, the cost of child care may be prohibitive. Increasing employer-sponsored or other types of subsidized and low-cost child care may be a means to helping create more choices for stay-at-homes.

Ensuring that stay-at-home moms are in good emotional shape is critical not only for the sake of these mothers, but also for the sake of their children's and families' well-being.

 

[Legacy]

How Millennials Could Make the Fed’s Job Harder
They love the idea of retiring early. That could diminish Federal Reserve’s firepower. (NYT, Business section)

Excerpts:

WASHINGTON — “They say millennials are lazy,” billboards plastered across 15 major cities declared last summer. “Retire early and prove them right.”

That sentiment, reflected in ads for the investment manager Prudential, is the stuff of a 30-year-old’s fantasy — and the Federal Reserve’s nightmare.

A young generation of aggressive savers could leave central bankers with less room to cut interest rates, which they have long done to boost growth in times of economic trouble.

To leave the work force early, millennials would need to build up massive retirement funds and consume less in the process. That hit to demand could slow growth and force rates to drop ever lower to entice spending. And if today’s workers actually managed to retire young, it would exacerbate the situation by shrinking the labor force, further weighing on the economy’s potential.

Millennials, who are roughly between the ages of 24 and 39 and have not lived through pronounced price spikes, already have the lowest inflation expectations of any adult generation. Their belief that costs will not increase could eventually slow actual price gains by making it hard for businesses to charge more. The Fed’s main interest rate includes inflation, so that would leave it with even less room to cut.

It may not come to this. Millennials could become more worried about inflation as they age, giving companies more room to lift prices. Their difficult post-recession entry into the labor market means many are laden with student debt, so it’s unclear if they will be able to retire young. But many indicate that they want to leave the work force early — an ambition that economists say could spell macroeconomic trouble if realized.

“It would lower interest rates — that’s certainly true,” said Joseph Gagnon, an economist at the Peterson Institute for International Economics. “It would be a double whammy: It directly raises savings” and “it would further reduce the need to invest in factories and offices for these people.”

Interest rates have been falling for decades, and demographics are a major factor in that decline, economists say. Once people are past middle age, they are living longer without working correspondingly later in life, so they have been saving heavily to fund extended retirements.

Millennials have grown up with dire warnings that Social Security will be exhausted by the time it is their turn to use it. They came of age in the worst downturn since the Great Depression, so they are no strangers to economic insecurity.

But there’s a paradox to thrift: Saving, even if virtuous on an individual level, can cause economic trouble en masse. If ambitious cash stockpiling were to catch on, it could exacerbate secular stagnation, a term that the Harvard University economist Lawrence H. Summers repopularized to describe the low-growth, low-inflation state of many advanced economies.

When consumers save a big portion of their income, they are not spending as much on dinners out, movie nights and cars. Businesses respond by investing less in equipment and technology, and productivity stalls. Bosses are unwilling to pay their workers more for the same output, and weak pay gains further restrain spending.

Retirement saving behavior is not the only driver causing economic torpor and lower rates. Inequality has left a small number of people with more money than they can realistically spend. Slower labor force growth and more iterative technological improvements could also have an impact.

The lower interest rates that result from high and unequal saving might sound great — think cheaper mortgages — but they leave economies vulnerable to shocks.

 

[wizards8507]

Just put $10,000 into an ETF. Should make about $300 on the correction tomorrow.

This aged well.

 

[NorthDakota]

How Millennials Could Make the Fed’s Job Harder
They love the idea of retiring early. That could diminish Federal Reserve’s firepower. (NYT, Business section)

Excerpts:

It ain't gonna happen. Millenials dont save.

 

[Ndaccountant]

It ain't gonna happen. Millenials dont save.

 

[Bluto]

May be a bit early.

So in 1 week the “Trump” economy has been torpedoed. No one saw that coming. I have a feeling that this administration will completely bungle the response to address some of the underlying causes given they have fired everyone who was a semi competent bureaucrat:

 

[Wild Bill]

So in 1 week the “Trump” economy has been torpedoed. No one saw that coming. I have a feeling that this administration will completely bungle the response to address some of the underlying causes given they have fired everyone who was a semi competent bureaucrat:

People saw a sell off coming. Probably didn't predict the catalyst of it would be a Chinese virus, though.

 

[NDBoiler]

The market is a roller coaster, you gotta ride the waves and be in it for the long term. The only way you get hurt on a roller coaster is if you jump off

 

[Legacy]

Apple and Microsoft made up a bit over 8% of the S&P 500. Losses for all are detailed below.

Apple bounces after briefly dipping into bear market territory

 

[NorthDakota]

So in 1 week the “Trump” economy has been torpedoed. No one saw that coming. I have a feeling that this administration will completely bungle the response to address some of the underlying causes given they have fired everyone who was a semi competent bureaucrat:

Idk what you want...lmao worldwide virus man.

 

[Bluto]

Idk what you want...lmao worldwide virus man.

The reason you don’t vote for carnival barker morons like the current Commander in Chief is unforeseen circumstances like this. That’s the point. Trust me, if people start to panic over this it will not be a good thing for me personally so no I’m no rooting for the corona virus.

If you find this funny you’ll probably fall off your stool when climate change really kicks in and begins disrupting markets in catastrophic ways.

 

[Bluto]

People saw a sell off coming. Probably didn't predict the catalyst of it would be a Chinese virus, though.

This isn’t some big surprise. Scientists have been sounding alarms about this very thing for years. The big Ebola outbreak in Africa in 2013 came pretty damned close to becoming a contagion. This is exactly why foreign aid, funding the WHO, the State Department, CDC, various UN programs and on and on makes a whole lot of sense. It also seems like it was a major blunder by the Ubermensch who think they know it all to put the entire globes eggs in a Chinese basket. Anyhow, for better or worse we are all interconnected on a global scale and no amount of wall construction is going to change that fact.

 

[Irish YJ]

So in 1 week the “Trump” economy has been torpedoed. No one saw that coming. I have a feeling that this administration will completely bungle the response to address some of the underlying causes given they have fired everyone who was a semi competent bureaucrat:

This is dumb AF. Sorry dude, but it is. The US is by far the biggest traveler to China of all the Western countries. Even more than Russia which is a hop, skip, or jump away. Per captia and travel, we have far less cases than countries who travel far less to China.

We only have one person considered critical, and 7 already "recovered" which is over 10%. We have zero deaths while a socialist loving country like France already has 2 and has far less travel to China.... Italy, 21 deaths and far less travel.

Underlying causes? What, like preventing the Chinese from doing whatever the hell they did? We have zero clue how it started.

Hell, when Trump stopped travel from anyone visiting China last month, WAPO was OUTRAGED and called it over reach. Perhaps you think we should be world's hospital too? This is what Globalization gets you.

People saw a sell off coming. Probably didn't predict the catalyst of it would be a Chinese virus, though.

Corrections always occur eventually. Most predicted it would happen earlier with non-pandemic causes. Nothing you can do about this. I'm sure they'll find some way to make it Orange Man's fault...

Massive pandemic caused by China. Orange Man Bad
Dog shits on the sidewalk. Orange Man Bad
Great economy. Obama good.

 

[Irish YJ]

This isn’t some big surprise. Scientists have been sounding alarms about this very thing for years. The big Ebola outbreak in Africa in 2013 came pretty damned close to becoming a contagion. This is exactly why foreign aid, funding the WHO, the State Department, CDC, various UN programs and on and on makes a whole lot of sense. It also seems like it was a major blunder by the Ubermensch who think they know it all to put the entire globes eggs in a Chinese basket. Anyhow, for better or worse we are all interconnected on a global scale and no amount of wall construction is going to change that fact.

Pandemics make walls and isolation much more attractive, no?
And all the liberals keep saying it's OK that we have trade imbalance and heavy reliance on China... LOL...

 

[Wild Bill]

This isn’t some big surprise. Scientists have been sounding alarms about this very thing for years. The big Ebola outbreak in Africa in 2013 came pretty damned close to becoming a contagion. This is exactly why foreign aid, funding the WHO, the State Department, CDC, various UN programs and on and on makes a whole lot of sense. It also seems like it was a major blunder by the Ubermensch who think they know it all to put the entire globes eggs in a Chinese basket. Anyhow, for better or worse we are all interconnected on a global scale and no amount of wall construction is going to change that fact.

I guess people predicted this. Science rules!

 

[Legacy]

At a campaign rally in S.Carolina yesterday, Trump said the coronavirus is the Democrats' "new hoax" to drive him out of office like the Mueller report and his impeachment.

“The Democrats are politicizing the coronavirus. They're politicizing it,” he said. “They don't have any clue. They can't even count their votes in Iowa…. One of my people came up to me and said, ‘Mr. President, they tried to beat you on Russia, Russia, Russia.’ That did not work out too well. They could not do it. They tried the impeachment hoax.”

and "This is their new hoax."

At the rally, he also blamed the media, saying coronavirus reports are "fake news" and the press is "in hysteria mode".

Mick Mulvaney told those gathered outside the nation’s capital at the Conservative Political Action Conference:

"The reason you're seeing so much attention to it today is [Democrats] think this is going to be what brings down the president.”

and

“I got a note today from a reporter saying, 'What are you going to do today to calm the markets?' I'm like, really, what I might do to calm the markets is tell people to turn their televisions off for 24 hours."

The Wall Street selloff of 11.5% last week was due to individuals watching the "hysteria" from the Fake News?

Goldman sees zero earnings growth for US companies this year because of coronavirus (CNBC)

“US companies will generate no earnings growth in 2020,” Goldman’s chief U.S. equity strategist, David Kostin, said in a note to clients Thursday. “We have updated our earnings model to incorporate the likelihood that the virus becomes widespread.”

“Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty,” said Kostin.

Donald Trump Jr. claimed on Fox News:

But for them to try to take a pandemic and seemingly hope that it comes here, and kills millions of people so that they could end Donald Trump's streak of winning, is a new level of sickness. You know, I don't know if this is coronavirus or Trump derangement syndrome, but these people are infected badly.

 

[yankeehater]

This is dumb AF. Sorry dude, but it is. The US is by far the biggest traveler to China of all the Western countries. Even more than Russia which is a hop, skip, or jump away. Per captia and travel, we have far less cases than countries who travel far less to China.

We only have one person considered critical, and 7 already "recovered" which is over 10%. We have zero deaths while a socialist loving country like France already has 2 and has far less travel to China.... Italy, 21 deaths and far less travel.

Underlying causes? What, like preventing the Chinese from doing whatever the hell they did? We have zero clue how it started.

Hell, when Trump stopped travel from anyone visiting China last month, WAPO was OUTRAGED and called it over reach. Perhaps you think we should be world's hospital too? This is what Globalization gets you.



Corrections always occur eventually. Most predicted it would happen earlier with non-pandemic causes. Nothing you can do about this. I'm sure they'll find some way to make it Orange Man's fault...

Massive pandemic caused by China. Orange Man Bad
Dog shits on the sidewalk. Orange Man Bad
Great economy. Obama good.

Most investment professionals look at things in the long term. Something like the Coronavirus is a short term phenomenon as even Tim Cook mentions in this interview when asked how Apple is dealing with it.

What I am hearing from people I trust with my money is the market is way more concerned with the strong possibility that Bernie Sanders will lead the ticket for the largest political party in this country. His plans will blow up the capitalist system and therefore cause harm to the economy which will be completely destructive to world financial mechanism. Who would want to invest in anything with a long term outlook with that as a possibility.

With that being said, I think Trump will beat him so I am seeing this short term phenomenon as a buying opportunity and am looking to get back into stocks I sold years ago that still have strong fundamentals, but now are no longer priced at their market highs.

https://cntechpost.com/2020/02/29/t...-only-make-small-adjustments-to-supply-chain/

 

[yankeehater]

At a campaign rally in S.Carolina yesterday, Trump said the coronavirus is the Democrats' "new hoax" to drive him out of office like the Mueller report and his impeachment.

and "This is their new hoax."

At the rally, he also blamed the media, saying coronavirus reports are "fake news" and the press is "in hysteria mode".

Mick Mulvaney told those gathered outside the nation’s capital at the Conservative Political Action Conference:
and


The Wall Street selloff of 11.5% last week was due to individuals watching the "hysteria" from the Fake News?

Goldman sees zero earnings growth for US companies this year because of coronavirus (CNBC)





Donald Trump Jr. claimed on Fox News:

He is referring to crap like this where the NY Times and others are trying to pin the virus on him and are even naming it after him. You tell me the left and the media are not trying to politicize it!

https://www.nytimes.com/2020/02/26/opinion/coronavirus-trump.html

 

[Bluto]

Pandemics make walls and isolation much more attractive, no?
And all the liberals keep saying it's OK that we have trade imbalance and heavy reliance on China... LOL...

No. Because the worlds economies are already interconnected and that is not going to change. That being the case the idea of “isolation” is a delusional pipe dream. Since we are all interconnected it would seem that some sort of coordination and or cooperation would be the pragmatic dare I say “conservative” approach.

Also, per one my previous posts (that you quoted oddly enough) I did point out that it was stupid for many economies to become overly reliant on China. “Conservatives” pushed that idea as much as anyone. Remember the hissy fit that erupted on the right when Solindra was being subsidized to produce solar tech in the US?

 

[Bluto]

I guess people predicted this. Science rules!

“Predicted” no. Stated very strongly that something like this was inevitable in the short term. Yes. Maybe we should listen to scientists when they reach a consensus on something?

Or we could put ruby red slippers on Larry Kudlow and have him tap the heels together while chanting “everything’s fine, everything’s fine, everything’s fine”.

 

[NorthDakota]

He is referring to crap like this where the NY Times and others are trying to pin the virus on him and are even naming it after him. You tell me the left and the media are not trying to politicize it!

https://www.nytimes.com/2020/02/26/opinion/coronavirus-trump.html

You can learn a lot about a person by how they interpreted the Donald's "hoax" statement.

Best to not even bother

 

[Bluto]

This is dumb AF. Sorry dude, but it is. The US is by far the biggest traveler to China of all the Western countries. Even more than Russia which is a hop, skip, or jump away. Per captia and travel, we have far less cases than countries who travel far less to China.

We only have one person considered critical, and 7 already "recovered" which is over 10%. We have zero deaths while a socialist loving country like France already has 2 and has far less travel to China.... Italy, 21 deaths and far less travel.

Underlying causes? What, like preventing the Chinese from doing whatever the hell they did? We have zero clue how it started.

Hell, when Trump stopped travel from anyone visiting China last month, WAPO was OUTRAGED and called it over reach. Perhaps you think we should be world's hospital too? This is what Globalization gets you.



Corrections always occur eventually. Most predicted it would happen earlier with non-pandemic causes. Nothing you can do about this. I'm sure they'll find some way to make it Orange Man's fault...

Massive pandemic caused by China. Orange Man Bad
Dog shits on the sidewalk. Orange Man Bad
Great economy. Obama good.

Perception is everything. People believe this is a huge problem therefore it is a huge problem. Sociology is a bitch sometimes. As is humanities penchant for irrationality.

Now as to Donald and blame. Again it’s all about perception. He has spent his entire presidency taking credit for the economy and markets. Now that the markets have tanked? Well, he owns that as well because he spent so much time and energy overstating his case.

From a messaging standpoint the 3D chess master Donald had ample time to get out in front of this. Instead he chose to ignore the possibility that the developing outbreak could tank global markets and possibly the economy, which is the one thing that has propped up his already low approval ratings Seems to me he was too busy tweeting about irrelevant bullshit, developing lists of people who hurt his feelings and golfing. Good for him.

Orange man bad? Ehhh
Orange man stupid? Definitely

 

[Bluto]

As to the whole idea of “globalization” can people please go read a couple of history books? Globalization and large scale interconnected trade between the various continents is not some new fangled phenomena that arose with the internet and Amazon Prime.

 

[Irishize]

Tweeted by Richard Engel of NBC News:

Two virologists I’ve spoken to say coronavirus is not an end of days virus. They say take precautions/work for a vaccine, but emphasized this isn’t “the big one.”

Perspective from an American w/ coronavirus:

https://www.washingtonpost.com/outlook/2020/02/28/i-have-coronavirus-so-far-it-isnt-that-bad/

 

[Irish YJ]

Perception is everything. People believe this is a huge problem therefore it is a huge problem. Sociology is a bitch sometimes. As is humanities penchant for irrationality.

Now as to Donald and blame. Again it’s all about perception. He has spent his entire presidency taking credit for the economy and markets. Now that the markets have tanked? Well, he owns that as well because he spent so much time and energy overstating his case.

From a messaging standpoint the 3D chess master Donald had ample time to get out in front of this. Instead he chose to ignore the possibility that the developing outbreak could tank global markets and possibly the economy, which is the one thing that has propped up his already low approval ratings Seems to me he was too busy tweeting about irrelevant bullshit, developing lists of people who hurt his feelings and golfing. Good for him.

Orange man bad? Ehhh
Orange man stupid? Definitely

Purely my opinion, but this crash is actually "good" for Trump. He didn't cause it, and there's nothing he could have done to keep it from happening. A correction was bound to happen eventually, and a natural correction (recession) would have been easier to hang on Trump (even though it's typically a natural economic happening). A crash due to a pandemic can't be pinned on him. If anything, he can use this occurrence to further bash globalization and heavy reliance on a country like China.

As to the whole idea of “globalization” can people please go read a couple of history books? Globalization and large scale interconnected trade between the various continents is not some new fangled phenomena that arose with the internet and Amazon Prime.

The term "Globalization" is a late 20th century term used to describe the ups and downs of "globalism", and was more specific to the impacts of technology on travel and communication (leading to increased globalism). "Globalism" as a term was really first used post WW2 as a means of discussing the "West's" plan for the world. Both are linked a lot to neoliberalism, world capitalism, etc..

But yes, the term can be applied to different areas and time periods probably going back to Roman Empire (although that was not really "global". Anyway, it's a lot more than just large scale interconnected trade like you referenced. Trade is only one component (you have ideas, ideology, culture, etc..)

 

[Legacy]

To be clear, it's stupid to attribute the COVID 19 coronavirus to Trump nor the market slump. We just have to be prepared from a public health standpoint. This is an emerging virus, which will happen in the future with something else new. Vaccines take some time to develop and require funding as well as a nation sharing samples. Many of the scientists at the CDC have left over the last few years. He proposed a 16% decrease in funding to them in his 2021 budget as every year, which has been ignored by Congress, so funding has remained the same.

Almost half of Americans are not in the stock market so those are impacted only by slowing growth. Those with more wealth will buy on the dip. I don't mind a President who says "it's not my fault" and calms concerns. IMO, he should be above the Blame Game just as some media reports should.

He owns the effectiveness of the response only if his budget cuts have impacted it and that federal structural for the response has been damaged. Trump could declare an emergency to shift funds from Defense as he did with funding the Wall. Congress can - and seems to be - appropriating funding for the response. Supply chains can be disrupted. People can get on planes without symptoms and be communicable.

There will always be opinion articles that are extreme and irresponsible. In this day and age with a global economy and global travel, we'll see these emerge regularly. We'll learn from this and adapt.

 

[Legacy]

A good overall review of the proposed changes in the sudent loan program proposed in Trump's 2021.

Trump Student Loan Forgiveness Changes and 2020 Proposals

A quick review from CNBC on student loan forgiveness:

Trump looks to kill student loan forgiveness program

Key Points
- The Education Department’s budget would be slashed under Trump’s 2021 budget.
- Cuts include the end of subsidized student loans and the popular public service loan forgiveness program.

As student debt continues to climb, President Donald Trump on Monday released a budget for 2021 that would slash many of the programs aimed at helping borrowers.

Student loan spending would be cut by $170 billion in Trump’s plan, titled “A Budget for America’s Future.” The reductions include “sensible annual and lifetime loan limits” for graduate students and parents and the end to subsidized loans, in which the government covers the interest for borrowers who are still in school or experiencing economic hardship.

It would also reduce the number of repayment options for borrowers and nix the popular, if challenged, public service loan forgiveness program....

 

[koonja]

I refi'd 6 months ago, but with the corona-craziness I'm considering again now.

Currently on 20 year, 3.875%. Wells Fargo is offering 15 year, 3%.

Should I jump now? Or are these going to drop even further in the weeks to come?