Are things going to get better??
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Started by wglassfo - June 11, 2020, 12:42 p.m.

How many think the worst is behind us

Will employment  pick up as the lock down continues to open up

By what metric do you measure economic activity

Tim making profits on the stk market

Unemployment numbers

General GDP numbers

I don't really know what metric to measure other than the Great Depression and we don't think that will happen

I guess I will stick my neck out and say GDP will not equal pre corona virus any time in the next two yrs

Does anybody think GDP will be equal to pre corona virus in say 5 yrs

I guess GDP is as good a metric as any to measure economic health of the nation

I don't think GDP will equal anything close to pre corona in 5 yrs

Tell me what you think and why

The reason I post this is because I think a lot of people will be in for an unpleasant surprise as prices increase faster than wages or GDP

Then add in the social unrest, business large and small closing permantly, vast swaths of burnt out bricks and mortar, banks stuck with loans that won't be re-paid, all of which means we have a big problem. I probably missed a few problems, like dis- banding the police department, but any way??

Maybe Tim and most others on the forum will be okay but millions of americians won't be okay

Powell says he is there for the people. What a joke that will be. 

The GDP numbers are the best metric for my prediction.

Not good but you may disagree

If so then why???

We really need to think about the future now considering all that has happened

How you vote might decide a lot about the future so start thinking now, and tell us what you think about any of the above

You can't ignore what has happened

Comments
By TimNew - June 11, 2020, 1:16 p.m.
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Well Wayne,  I'm not sure why you feel the need to keep bringing up my name, Wayne,  but I think Wayne's prediction of GDP not being equal to pre-virus levels for 5 years is an example of Wayne being a bit more than cautious. And Wayne,  I am putting that as mildly as I can

There are too many unknowns to make solid predictions,   but I think the descent has leveled off.   I know cases are up and the Fed is saying we have a long road ahead..   But I think the increased cases are heavily influenced by the dramatic increase in testing and what people are ignoring is that it appears the fatality rate, the number that really matters,  is dropping. Also,   we have seen an economic hit far more acute than anything in history.  Absolutely devastating in the sheer numbers.  But is it chronic?    I think not. The infrastructure has remained intact,  unlike the results of a war.   There is plenty of money out there,  unlike following the sub-prime mortgage crisis when trillions evaporated out of the markets and properties over night.  So,  what needs to change is behavior. 

It appears to me, we have factions in society that are doing all they can to keep peoples confidence down.   Will they succeed?  We'll see.   But I see more and more skepticism out there. Right or wrong,  people have heard too many contradictions and suffered too much pain, economically and socially, to take this as seriously as they once did.  These protests pretty much sealed that deal. 

I think we'll have a good 3rd qtr and a fantastic 4th qtr.  If the GDP does not match/exceed the pre-virus levels in a year, I'll be very surprised.


By wglassfo - June 11, 2020, 3:47 p.m.
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Hi Tim

I am sorry about using your name

I think your name stuck because of your amazing results in the stk market

I am a bit of a contrarian over the long haul on equities as I wonder if fundamentals such as profits or P/E will affect the price. However, the market has proven me wrong for some time, so congrats on your stk market success

Re: the economy

It seems consumer confidence is some what lower than usual, which is a major driver for economic health

That plus damage due to business BK make me think it will be a long road back to pre-corona GDP

As I said GDP seems to me the best measure of economic health

By wglassfo - June 11, 2020, 6 p.m.
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Mcuchin says a new round of closing won't be necessary even if corona cases go up

I guess he thinks the cure was worse than the disease

After todays market one wonders what will drive the economy to recovery

Clearly Mcuchin doesn't want more BK to burden the banks non performing loan portfolio

By TimNew - June 12, 2020, 3:15 a.m.
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Can't judge the economy based on one day in the markets.  The markets are doing a lot of knee-jerk reactions to the "News Du Jour".  

Of course consumer confidence is down.  They'd have to be nutz to feel really confident right now.    But it's a little higher than it was.

Of course profits are down for a lot/most companies.  The economy shed all kinds of activity.   But there is more activity than there was.

The point is..  I believe we have been through the worst.   Lots of indicators tell me the descent has ended and some areas are showing early signs of growth.   Further, the depths that we feared we'd see, (as priced into assorted markets), were never reached. Quite simply,  things just don't suck as bad as they did and they never sucked as bad as we'd feared.   

That can all change,  but for now,  the above statement is what is driving the long term markets. Day to day?  Depends on the "News du jour" and they like to sell bad news.


By wglassfo - June 12, 2020, 8:55 a.m.
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Something I've wondered for a long time

Do markets [equities] support the economy or is the equity market and the economy separate??

Certainly if your house and personal paper wealth increases you have a sense of confidence to purchase things, especially at super low int rates. We buy machinery on the farm at super low int rates also.

However, most of those people on the streets this last few days probably own very few stks, other than the new robinhood day traders

The equity market does not produce any real wealth, just paper wealth. I don't think equity markets as of late have used capital to expand wealth producing factories and such to produce the needed jobs. Instead buy backs and dividends are the result of higher equity markets.

I don't know if video seen during demonstrations  is a accurate cross section of America, as I see several different skin colors in video I have see. Does skin color indicate a cross section of America, I don't know if this is a proper comparison

However, I wonder how many of these people will go back to work some day soon, and many others such as these people, will also have a job waiting.

I wonder if this is frustration against racist actions or has become a deeper frustration of not participating in the americian dream. Thus if rich people own the jewlery stores and rich people buy their jewelry, then burn down what we will never have a chance to participate. Same with other places of looting and burning. What motivates such action.?? Is it A sense of some have plenty and we have very little so now is the chance to get some of the plenty, we see in these stores but can not afford to buy??? I don't know

Just pondering the future of America and trying to make sense of all we have seen

Will this pass and return to normal or has this affected our economy in any way???

I especially ponder the equity markets and the wealth producing effect for the few while the many do not participate.

I have an idea these demonstrations have no real purpose other than a feeling that the system is broken or has been broken for a long time and now I am venting my frustration at a broken system.

Which makes me think, change will come slowly as will economic recovery if frustration can be linked to the economy

That linkeage is some thing I don't know, if it is true or not

By wglassfo - June 12, 2020, 1:47 p.m.
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If you look at the equity markets you might be encouraged to think the worst is behind us

Unless you have a neck injury. That was funny and I don't mean to bring you into the post, except for such a funny remark, I could not help myself

However, back to the recovery. If equities mean recovery than the above applies

But I don't think equities can carry a recovery. Not with unemployment increasing, if my info is correct on unemployment.

The other thing I forgot and should have a big effect on recovery is local tax revenues will be down. Add to that the burnt out land scape of cities and who will support services. Not enough tax revenue is a problem

If the Federal gov't passes a bill for state and local assistance, will this be the answer??? to recovery

Congress, the Fed and treasury have to be careful about how much liquidity they create to pay for all this spending. State and local gov't will need an aggregate of trillions of new dollars, to meet their expense deficit

In additional Powell stated he will support every unemployed person, which means millions of people expecting a new stimulus cheque

I don't think the equity market will be a measure of recovery. Equities have a history of not producing new and better, cheaper goods. Now it must be admitted that the supply chain will be severely tested with a lot of new suppliers starting to produce in the USA

I think demonstrators are just having a good time, and will not be a part of the work force.

 So who will do the work [there should be plenty of willing people to work] but jobs require skills which should also have a good supply of workers

The problem is the unemployment numbers will have to perform miracles, for everybody to find a job. Also, consumer sentiment, for those with jobs is not as robust as before all this happened

Adding the plus and minus column up may have a good recovery but I remain doubtful;

If the Fed gets too carried away with stimulus money then add in a reluctance of foreign investment to buy the treasury bonds. Now that would really stop a recovery, if we have to buy our own bonds, in quantity

One thing that puzzles me is why are USA central banks buying gold??? I thought USA banks hated gold, to put it mildly

Sorry no link to banks buying gold so that is not confirmed. That was from many days ago I read that bit about gold which may not be true. I have not even looked up any info, but I will after this post