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Surely the crash of the US economy has to be soon

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Re: Surely the crash of the US economy has to be soon

#541

Post by le-mark »

mmaunder wrote: post #522

What is different about this time is how much a crash is expected, which is reflected in the run up in the gold price, for one. It’s also reflected in the public discourse about the high probability of a crash - as with this post and many others over the past couple years. 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most. If we crashed today it would have been expected by mo…

> 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most.

In both those events there was clearly a bubble, and although no one could predict exact dates, corrections were expected.

Exactly the situation now. The problem is predicting the top. Example;You might estimate now is a good time to pull your assets out of the markets, but then the markets go up another 10%. Then a 20% correction happens and you attempt to time the bottom but miss it. Best case you buy back in at about the same point you left. With transaction fees and capital gains you’ve lost money anyway.

I did this in 2007, bought some rentals and missed a lot of gains post 2008.

Re: Surely the crash of the US economy has to be soon

#543

Post by bootsmann »

tossandthrow wrote: post #434
zeckalpha wrote: post #260

A declining dollar will look like a good economy for those who think the economy is the stock market.

From an EUR perspective the s&p500 has flatlined over the past year while the msci Europe is up by almost 30% in eur terms. Needless to say, as an outsider from the inflation bubble, American stocks are not a good investment. There is a good reason to believe that us stocks will not outperform in inflation adjusted terms over the next 10 years.

If you’re an US investor (dollar-based) who bought stoxx 600 on the day trump took office youre eating very well right now.

Re: Surely the crash of the US economy has to be soon

#544

Post by anukin »

oceanplexian wrote: post #414
mndgs wrote: post #410

Earlier quoted context omitted.

Nonsense. If 27% of GDP is suddenly gone, how US economy could be the largest? (rest of the world can substitute US trade between itself)

The US Economy is 53% larger than the next largest, China, in terms of real GDP (Not fake PPP nonsense). 28T vs 18T.

PPP is more relevant than gdp nominal.

Re: Surely the crash of the US economy has to be soon

#545

Post by bootsmann »

0xDEAFBEAD wrote: post #419
gpt5 wrote: post #371

Earlier quoted context omitted.

This is true - all the global multinationals that essentially make the US stock market earn a good portion of their revenue in foreign currency, so their revenue and profits will increase. In addition, they are all cheaper when priced in USD, so their stock will go up regardless. This is just counting short term effect of currency devaluation. Long term there are also effects around trade balance and jobs.

Declining USD makes US exports more competitive.

Depends very much on the product, it also makes inputs more expensive to buy.

Re: Surely the crash of the US economy has to be soon

#546

Post by xivzgrev »

mmaunder wrote: post #522

What is different about this time is how much a crash is expected, which is reflected in the run up in the gold price, for one. It’s also reflected in the public discourse about the high probability of a crash - as with this post and many others over the past couple years. 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most. If we crashed today it would have been expected by mo…

There's also the fact that US equities are now consistently best asset class. Used to be all over the map. But with rise of passive investing and global markets, capital flows to the winner. Success begets success.

If something changes and suddenly foreign equities start consistently beating out US then capital would flow accordingly. But the US still has a massive advantage from passive flows propping it up in perpetuity.

Re: Surely the crash of the US economy has to be soon

#547

Post by bayarearefugee »

0xDEAFBEAD wrote: post #415
bayarearefugee wrote: post #158

Earlier quoted context omitted.

> 'this time it's different' I remember reading this a lot in 2000-2001 and 2007-2008 That said, overall I sort of agree with your assessment except for having any optimism that the US changes course. The current looming problems with the US economy are almost entirely unforced errors of the Trump administration (they could have done basically nothing and taken credit for the Biden soft landing and economic growth) b…

>Trump has no ability to admit mistakes even to himself Whatever happened to 'TACO'

TACO is not the same as admitting a mistake.

Admitting a mistake involves some amount of learning not to make the same mistake again.

The reason this is important practically speaking can be seen in situations like chaotic tariffs and threatening allies.

The TACO move might allow us to step back from the cliff in these situations but the fact that we keep being on the cliff on a weekly basis means every other world actor has no choice but to make plans to have us committed in the long term, and this is going to cause huge, long term problems for the US economy.

Re: Surely the crash of the US economy has to be soon

#548

Post by Propelloni »

JPLeRouzic wrote: post #462
cjfd wrote: post #377

Earlier quoted context omitted.

Incorrect. The rules based order was first attempted after the first world war and then created after the second one. These are lessen that have been bought with blood. Lots of blood. Megaliters of it. The incredible stupidity of throwing that away is absolutely disgusting.

I acknowledge that the 20th century was marked by much bloodshed, but this wasn't limited to the world wars and it continues violently into the 21st century. If the world is governed by rules, why does the United States maintain a considerable number of military bases around the world, far exceeding the total number of military bases of all other countries combined? Why is the American military budget so much higher…

> If the world is governed by rules, why does the United States maintain a considerable number of military bases around the world, far exceeding the total number of military bases of all other countries combined?

It's the other way around. Rules are tools of peace. No peace, no rules. But if you want peace then you have to be ready to wage war. It's called deterrence and the EU is learning this just now, again. That's also one reason why the USA has been called the world police... because it was true.*

If nobody enforces the rules any more, things break down and we close in on violence. It is plain to see on the global scale, e.g. Russia's war against Ukraine, and also the domestic scale, e.g. ICE's violence against their own citizens in the USA.

> Why is the American military budget so much higher than the combined military budgets of all other countries?

The US military budget is about three times that of the EU or China's, or about a third of all military spending on the globe. Obviously, this is much higher than any single entity, but not all other countries combined.

* Frankly, being the world police has had a lot of benefits for the USA. Why they are abdicating this position to run a protection racket instead is for wiser people than me to answer.

Re: Surely the crash of the US economy has to be soon

#549

Post by bootsmann »

zahlman wrote: post #228
tock wrote: post #69

Stocks might go down if AI doesn't bring in enough revenue. The real risk seems to be currency depreciation though. The USD is already down 15% this year compared to the Euro. I'm worried about what the next FED chair appointee will do. JPow has stuck to his principles so far.

> The USD is already down 15% this year compared to the Euro. It's down 12% since a year ago , but that's largely a reaction to the tariffs. It's been fairly stable since July or so and has only seen a small dip (and partial recovery) in the last couple of weeks. https://finance.yahoo.com/quote/USDEUR=X/

Tariffs cause a currency appreciation (they reduce imports, driving down the supply of the currency outside the country)

Re: Surely the crash of the US economy has to be soon

#550

Post by r_lee »

xivzgrev wrote: post #536
mmaunder wrote: post #522

What is different about this time is how much a crash is expected, which is reflected in the run up in the gold price, for one. It’s also reflected in the public discourse about the high probability of a crash - as with this post and many others over the past couple years. 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most. If we crashed today it would have been expected by mo…

What if the rise in index funds is a bubble on its own? It's massive and increasing amounts of money that is not price sensitive and keeps growing. There's an underlying bubble message: "the stock market always bounces back, so keep plowing your money into it even when it's down". Apparently passive funds are 60% of mutual funds / ETFs now https://www.avantisinvestors.com/avantis-insights/has-passiv... Even more insi…

It absolutely is.

With the rise of ETFs and 401ks people are incentivized (literally) by the US Gov to put their money in the S&P500

And the "instead of picking a needle in the haystack, just buy the whole haystack" only works if there is actual stock picking going on and you get to ride that, but now when there's so much passive investing, it's just everybody buying the haystack, even if there is no needle

Like with the ETFs and 401ks, they will happily buy as much NVDA at its ATHs, it's quite literally massive liquidity feeding orders all the time, coming from retail's monthly paychecks

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