91–100 of 157 posts
I hold 50% of my assets in shares and 50% in money. I cannot decide if I should hope for the stock market to go up or down. What do the wise people of HN think?
Earlier quoted context omitted.
Tiny bit of data? I can only say this - check out some older NFP releases and see what happens when there is a huge difference between the expected and actual data. During Greenspan's era there was another data point which was monitored a lot. I forgot the exact data point name. In the current NFP consensus on this one was 181k while the report was 200k which is nearly 10% variation from the expected value. As for tr…
I hear you, but it's still interesting to think that high inflation expectations means both bonds and stocks down, but much higher inflation expectations means stocks crash and therefore bonds is safe so they go up :-) Put differently, I could also argue that bonds up is irrational given higher inflation expectations and this move up will be short lived. Time to short bonds ;-) Will check out older NFP, thanks. > Tin…
The bigger concern is on the interest rate hikes. Low rates were expected to help kickstart the economy and prices and wages to increase. What has happened instead is that all the cheap money has caused asset inflation. US companies now have record amount of debt. Too fast increase in interest rates will cause their debt obligations to balloon and lower profitability. Though this will take couple of quarters to fully…
I think people are going to be surprised about the coming global growth, just like they said the Fed moves would cause massive inflation, or that interest rates would never go beyond zero.
Earlier quoted context omitted.
You see, the problem that I have with these kind of "explanations", is that those facts have been around for a long time. Why is it that precisely today (well, yesterday) was the day that everyone decided "right guys, we're selling equities"? The things you describe explain why people keep their finger hovering over the "sell" button, they don't explain why precisely today they decided to press it.
The 10 year treasury yield has recently strongly overtaken the S&P 500 dividend yield. That aggressive shift is guaranteed to end such a bubbly bull market run. https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i9Zchv.nY_N... The treasury move since September is one of the most aggressive of the last five years. What happened is simply an inflection point. Markets operate heavily by trigger points. Those are getting t…
I hold 50% of my assets in shares and 50% in money. I cannot decide if I should hope for the stock market to go up or down. What do the wise people of HN think?
If you don't want the money right now then you want a stock market to go down so that you can buy stocks at a discount.
The bigger concern is on the interest rate hikes. Low rates were expected to help kickstart the economy and prices and wages to increase. What has happened instead is that all the cheap money has caused asset inflation. US companies now have record amount of debt. Too fast increase in interest rates will cause their debt obligations to balloon and lower profitability. Though this will take couple of quarters to fully…
> Too fast increase in interest rates will cause their debt obligations to balloon and lower profitability Its not so bad for companies that export with a weaker dollar. Also for primarily domestic businesses where higher inflation correlates to a higher top line. In fact is advantageous to be in such a situation.
Earlier quoted context omitted.
I hear you, but it's still interesting to think that high inflation expectations means both bonds and stocks down, but much higher inflation expectations means stocks crash and therefore bonds is safe so they go up :-) Put differently, I could also argue that bonds up is irrational given higher inflation expectations and this move up will be short lived. Time to short bonds ;-) Will check out older NFP, thanks. > Tin…
Taking that line of thought further, that means if bonds and stocks are both down, then cash is a good place to be...when inflation is up? Investing is hard.
Of course, real decisions are made on figures. The actual way of making this decision would be to compare the bond yield with the expected inflation. If expected inflation is higher than the bonds yields I'm going to sell my bonds for cash and so will a lot of people, so the bonds price will drop and the yields will raise until a point where they're attractive again.
But yes, it is hard.
The bigger concern is on the interest rate hikes. Low rates were expected to help kickstart the economy and prices and wages to increase. What has happened instead is that all the cheap money has caused asset inflation. US companies now have record amount of debt. Too fast increase in interest rates will cause their debt obligations to balloon and lower profitability. Though this will take couple of quarters to fully…
>Low rates were expected to help kickstart the economy and prices and wages to increase. You're confusing the sales pitch used to justify low interest rates with what they were expected to do. They were expected to bail out insolvent banks and save them from the consequences of their collective bad decisions. Not raise wages. Not kickstart the economy. Fiscal stimulus is how you do that and they knew that. Had politi…
The fact that you call out Jamie Dimon as a criminal with no evidence exposes you.
Thankfully most people can discern between reality and populist tripe.
Earlier quoted context omitted.
You see, the problem that I have with these kind of "explanations", is that those facts have been around for a long time. Why is it that precisely today (well, yesterday) was the day that everyone decided "right guys, we're selling equities"? The things you describe explain why people keep their finger hovering over the "sell" button, they don't explain why precisely today they decided to press it.
"everyone decided" It takes very few people to move the market. To dramatically oversimplify, if there are 1 million buyers and 1 million and 1 sellers, the market goes down until the number of buyers and sellers are equal again.
The bigger concern is on the interest rate hikes. Low rates were expected to help kickstart the economy and prices and wages to increase. What has happened instead is that all the cheap money has caused asset inflation. US companies now have record amount of debt. Too fast increase in interest rates will cause their debt obligations to balloon and lower profitability. Though this will take couple of quarters to fully…
You see, the problem that I have with these kind of "explanations", is that those facts have been around for a long time. Why is it that precisely today (well, yesterday) was the day that everyone decided "right guys, we're selling equities"? The things you describe explain why people keep their finger hovering over the "sell" button, they don't explain why precisely today they decided to press it.
When things avalanche like this, the size of the response is determined by the size of the instability, not the size of the triggering event. Consequently, you cannot understand the event by looking at its trigger, but if you would like to know what sort of considerations the trigger was comprised of, the fact that the new Federal Reserve chairman is avowedly more determined to raise interest rates than his predecessor is as good as any.