Let's Go Brandon's Roaring Economy... ya

Down Jones Industrial Average down 1100+ points today.  Nasdaq down 4.&% and the S&P down 4%. All in one day. Q1 2022 GDP was in recession territory.  CPI Inflation is still at 8.3% and the PPI inflation is over 11%.

All systems go. Roaring economy. Somebody, somewhere, must believe this bull crap.  He'll probably vote Democrat in the fall midterms.

Making roller coasters out of speed bumps

 On a week when the Dow Jones had it's biggest single day crash percentage-wise, since Black Monday in 1987, and followed by the biggest single day gain in history panic seemed to permeate the collective conscious of North Americans.  At my local Walmart and other stores I visited for my weekly grocery shopping I witnessed it personally.  No bottled water was left on the shelves. Toilet paper was gone.  Who knew toilet paper was critical for the apocalypse?  Canned goods were in short supply.  The meat department was running on empty, except for the ham.  The stores were crowded.  Parking lots were crazy.  This all on the same day that president Trump declared a national state of emergency and the stock market was in the midst of its rebound day.

People panic.  There is a herd mentality to it.  This is definitely something of which people can take advantage if they are less than scrupulous.  My wife saw on Amazon someone selling 6 rolls of toilet paper for $36.  What's interesting is that if you separate yourself from it you are not immune to it.  We happen to be low on toilet paper right now, so we end up swept up in the panic (to an extent) and thereby adding to the chaos (to an extent).

The danger from the coronavirus while real, is clearly over-projected as a crisis.  It is not - it is a problem.   Problems can be managed, crisis need to be avoided or escaped.  People are making roller coasters out of speed bumps. This will pass.  Your 401K, like mine, has probably suffered a material setback, but it is of a transient nature.  The value will return.  You have probably lost 3 to 12 months of growth from this, just like most everyone else. 

Be this guy.

This is no time to panic.  In fact there is never a time to panic. Panic rarely helps, in fact probably never.  If you have extra cash, now would be the time to invest it.  I was saying that to my friends after the 2000 point DJIA loss, before the bounce back yesterday.  Calm and rational assessment leads to smarter decisions.

As of yesterday I believe there were 40 coronavirus deaths in total.  In the U.S. about 10 people a day die from drowning.  Since January 1st that would be 740 deaths.  But I bet I can still go buy a life jacket.  Why?  Because there is no panic over it, it is not a splashy headline.  More importantly I suppose is that my chances of drowning in a boating accident are about zero right now.  That's probably true for you too.  Look beyond the headlines.  Think.  Be rational.  Freaking out is beyond foolish, it's dangerous. 

This will pass.  It will not lead to a recession if people do not panic, and even if it does lead to a downturn it won't last more than one quarter.  President Trump will not suffer electorally from this, and if he is shrewd, he will even benefit from it. I suspect he will.  He is thinking and being rational.  That will never be acknowledged by the mainstream media but if you think about it, their reaction not only doesn't affect him negatively, it's actually a benefit.

Market rebounding. It's not because of Joe Biden

The reason the DJIA is rebounding again (up 500 as I write) this morning in the face of coronavirus fears, is not because anyone is enthused about Biden winning, it's about Sanders losing.

The markets are scared of Sanders, and rightfully so.  He's not a Democratic Socialist.  He's a Socialist and pretty much a communist if you look closely enough.  He's a destroyer of capitalism.  No one is thrilled about Joe Biden winning and looking like the nominee this morning, except perhaps president Trump.

Biggest DOW gain ever

Last week my retirement fund lost 10% of it's value, and I'm sure I'm not alone in that.  I'm not panicked because either the coronavirus wipes out half of humanity and investments are almost pointless, or else the panic selling will rebound, like it has started to do today.

This is not a full rebound yet but I wish I'd had extra money to buy over the last week because I think the DOW will hit 30,000 before the election.

#MAGA moment

Today the Dow Jones Industrial Average was up over 400 points today. What changed? Not the Facebook hearings. Not the Mueller probe or the raid on president Trump's lawyer by the DOJ. Nope. This:

Remember last week people were freaking out over a trade war? President Trump is still winning and there's your #MAGA moment.

Why the stock market is fine: jobs and taxes

More growth lies underneath.

Via Yahoo:

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits unexpectedly fell last week, dropping to its lowest level in nearly 45 years as the labor market tightened further, bolstering expectations of faster wage growth this year.

...The labor market is near full employment, with the jobless rate at a 17-year low of 4.1 percent. The tighter labor market is starting to exert upward pressure on wage growth.

In another article on Yahoo:

President Donald Trump's $1.5 trillion tax overhaul, touted as major tax relief for individuals and corporations, is showing up in bigger paychecks and bonuses awarded to workers by companies whose tax bills are being slashed.

Despite the Yahoo spin, interviewing people who appreciate the cuts but still do not like president Trump, the underlying fundamentals are this: the job market is historically strong, wages are growing, companies are doing well and the tax cuts are making a difference.

The stock market correction is not unexpected, but the boom is just starting and therefore the stock market will be fine. I said it before and nothing has changed since; this is going to be a strong economic year, even as the bond market and hence investors adjust to the potential for inflation, the market will continue to grow.

The stock market is fine

Rush Limbaugh today said that the reason for the market volatility (yesterday the Dow Jones Industrial Average (DJIA) plunged over 1000 points) is a fear that they are trying to topple the Trump presidency.  I disagree.  While the Democrats may still be invested in ending the Trump presidency, the market is suffering a setback in that it has become, to a small extent, a victim of its own success.

The Trump presidency has seen a meteoric rise in the stock markets over the past year, and it's been accelerated by the passing of the Trump tax cuts.  When something changes so rapidly there is always a reverberation effect.  The stock market was due for a correction, but not a change of course.  True, the DJIA rise and the tax changes are likely going to have an inflationary effect, on wages, on interest rates as a result and then of course bond rates as a result of that.  That means money will shift towards the 10 year bonds (and others) with a better rate for those more interested in a secure long term investment.  That money has to come out of the stock market, therefore there's going to be a sell-off.  This is a temporary market correction, not a collapse.  Paul Krugman might try to convince his readers that the sky is falling like he did on election night in 2016.  It's not.

As the reverberation works it's way into the market, the buying will return, slowly at first but eventually once again apace.  The market cannot continue to rise at the rate it currently has been, corrections are necessary as is an eventual slowing of the torrid pace.  What is not necessary for investors is panic.

6 of top 10 fastest Dow 1000 point runs have been under president Trump

60% of the Top 10 fastest 1000 point runs for the Dow Jones Industrial Average (DJIA) have come under president Trump's tenure as president or president-elect. This is not Obama lag, t's a response to a promise, and then action, by the president and Republicans to fix the anti-business tax structure propped up by Democrats and the previous anti-business administration.

Click to enlarge.

That's no fluke.  Expect to see more records in 2018.

70 record Dow closes in one year under president Trump

The  Dow Jones Industrial average (DJIA) has closed 70 times at a record high in 2017, under president Trump - a record year after having risen from just under 20,000 in January to now on the edge of 25,000. A banner first year for the for the president on the stock market front, with a 25% DJIA rise. Impressive

President Trump himself had this to say, via Twitter;

70 Record Closes for the Dow so far this year! We have NEVER had 70 Dow Records in a one year period. Wow!

— Donald J. Trump (@realDonaldTrump) December 18, 2017

Granted, even Trump himself said that the Dow is not the bellweather of the economy. But it most certainly an indicator as well as robust GDP growth and decades-low unemployment. Liberals will say it was a delayed reaction to president Obama's economy. President Obama had eight years to fix things, and they're willing to believe he fixed it in his ninth year. But they are right, it is a delayed reaction to Obama's economy; it's a realization that the Obama economic malaise is over. It's all good news.

Is nobody asking this question about the stock market?

I'm no expert at the stock market watch, but this latest September-October downturn, while by no means on the scale of the 2008 crash, looks pretty bad. yet you go onto market watch TV shows and you see people arguing about whether this is a correction or nothing to worry about. With Japan slumping and now Germany and perhaps the rest of Europe slumping into recession territory, Chinese GDP getting softer, is it time to wonder whether there is another recession looming if not yet actually present?

Or is this just another case of protecting the president pre-midterm elections? I'm wondering why there isn't a healthy dose of skepticism here. Rose-colored glasses seldom work out.

I'm not suggesting that either protecting the president or unjustified optimism is the case but the level of optimism among the wealth-and-trading pundits does make it seem that they are trying to talk us into believing there's nothing to see here. Or perhaps it's themselves they are trying to convince.

Or maybe I've just been reading ZeroHedge too much lately.

UPDATE: As it turns out, not everyone thinks this is worth ignoring.

Now, in the last two weeks the stock market has undergone a substantial correction that may yet turn into a full blow crash. The Dow Jones Industrial Average has dropped by about 1300 points since October 1, falling from around 17,200 to 15,900 as of late afternoon on October 15. The S&P 500 and NASDAQ have fallen by similar proportions. All told, the U.S. stock markets have lost close to $1.6 trillion in wealth in the past two weeks. By all appearances, the correction has not yet run its course. The markets could fall still further on worries about slow growth in Europe and the United States, and a general sense that events are spiraling out of control.

So there's that.

As goes Greece, so goes the recovery.

Last week I recall telling a friend that the EU would not allow Greece to fail.  Sure, there would be strict austerity measures imposed.  Sure there would be massive protests in heavily subsidized, socialist Greece.  But in the end the countries in the European Union would be compelled to take a bit out of the crap sandwich that is the Greek bailout.  Sure enough it looked for a while that the deal was done.  For a while.  Today it looks like "not so fast".

Why Today's Dow Jones Recovery ISN'T Rainbows & Unicorns

The Dow Jones (DJIA) rebounded by over 400 points today after yesterday's Monday reaction to the Friday downgrading of the U.S. government's credit rating.  The market rebound is being attributed to the Fed's comments today that the interest rates will not change for the next two years.  Good news if you believe it.

Keeping score

As of this writing, it looks like the Dow Jones Industrial Average is down about 500 points, down over 10% over the last two weeks.  U.S. borrowing has exceeded 100% of GDP, European countries are in panic over sovereign debt.  That doesn't mean it's time to panic.  It's more keeping score.

What interests me though is whether things might have looked a little cheerier if Cut Cap and Balance had passed earlier this week.

Markets spooked tomorrow?

Already the Hang Seng is down 0.9% and the Nikkei is down 0.6% in early hours trading.  There was an earthquake of magnitude 6.2 off the coast of Honshu today, but some of it has to do with the potential for the absence of a deal on the U.S. debt ceiling.

How it looks in the U.S. tomorrow on the Dow Jones, NASDAQ and AMEX exchanges, likely will be the same.

U.S. Unemployment up to 9.7%

Mobile post.

Moments ago the August unemployment figures were announced. The numbers were not good, rising three tenths of one percent to 9.7%.

The number of lost jobs was lower than expected 216,000 instead of 225,000, but clearly the economy is not out of the woods yet.

Expect some sell offs today.

UPDATE: Corrected street estimate number to 225,000 from 233,000.

UPDATE 2: Looks like the market likes it so far. Right now the DJIA is up 10 points.

Market Recovery

Just a quick question for those of you touting Obama's economic recovery. Below is a chart of the Dow Jones Industrial Average (DJIA) for the last 10 years (1999 to 2009).

That's a recovery?

By that logic, a leg amputation for a hangnail is a successful surgery. Look at the chart. 2003-2004 is a recovery.

Recovery tipping point? Not just yet.

The economy could be rebounding. Or not;

NEW YORK (AP) -- Investors are having doubts about banks' profit reports, and wondering whether their better-than-expected performance mask larger problems with bad debt.

Stocks fell sharply early Monday as investors sold financial stocks and looked to lock in profits after a six-week rally. The major indexes slid about 2 percent, including the Dow Jones industrial average, which fell 175 points.

It's still too early to call. But if all we've seen from the Obama administration so far is smoke and mirrors (the smoke being burning money, the mirrors being their continual misdirection plays to the press and the public), then no one should expect the economy to recover unless it's actually doing so on it's own.

Sustainable Recovery?

Is the DJIA bounce the beginning of a sustainable recovery? I wouldn't bet on it just yet. Not if the administration keeps opening its mouth or keeps trying to OWN industries.

So far, it still looks dicey, despite the last few weeks. Not only for the markets, but for freedom.

But I'm feeling much better now

I was worried there for a while what with the plunging Dow Jones Industrial Average for a couple of months. We've had a few good days, so there's reasons to be cheerful, right? Right? I'm feeling much better now. Right?

Hello? That upturn over the last week has made it all better, right? Right?

Dow Up, a little...

Is it a rebound or a speed bump on the downhill trail? Looks like the latter when you look at this graph. But 1 day or 10 days do not make a trend.

But two months might be a trend...

Sure looks uni-directional to me.