Given an economy that was supposed to be rebounding strongly from the pandemic, this probably comes as a surprise to mainstream politicians and their media lapdogs. For SDA readers, not so much.
According to preliminary data, the S&P 500 lost 148.70 points, or 3.51 per cent, to end at 4,149.31 points, while the Nasdaq Composite lost 635.21 points, or 4.90 per cent, to 12,329.65. The Dow Jones Industrial Average fell 1,033.07 points, or 3.03 per cent, to 33,027.99.
Only a small number of the S&P 500’s constituents were in positive territory, one of which was Twitter Inc.
I can still remember Jan 2020 … when the Trump economy was setting new records for prosperity. In the Stock Market, in the jobs Market, in steady economic growth. Things were simply spectacular.
Then … COVID
GEE, I wonder why China and Dr. Fauxci … HER #1 sycophant … released it then? Err … “accidentally leaked”
I am a retired economist with a small, self-directed investment portfolio, so I follow the business news closely. Much like in politics, buiness news is segregated into the establishment media (who downplayed inflation, the stock market crash and a recession) and the small, independent media (who called the inflation, the stock market crash and the forthcoming recession). E.g., multimillionaire Jim Cramer at CNBC has been calling for strong stock market. The independent business media are relegated to web sites and YouTube.
The rosy forecasts from establishment media are tied to supporting Trudeau and Biden.
Jerome Powell hinted at interest rates increasing by half a percent. The markets reacted accordingly.
But, as I’ve said before, this time of year has, historically, been turbulent (“Sell in May and go away,” as the saying goes). There’s always something that makes investors twitchy.
It doesn’t help, of course, that Janet Yellen, who, as Fed chairman, was inept in that job, is the American treasury secretary. Powell, the current chair, isn’t a whole lot better.
Cramer, on the other hand, is simply a windbag.
I drank away my retirement funds 15 years ago, so I have the clarity that comes with having no money in the market.
Last September, I sent a note to my daughters (28 and 26) telling them that the market would top out in the next three months, and this would be a good time to position themselves for the upcoming bear market. I recommended closing out all margin positions, all short positions, buying LEAPS against long positions, and especially, look at commodities. I have no idea if they paid any attention or not.
Huh. Apparently you can’t turn the economy off and on at will without lasting repercussions for months and years. Who knew?
Now that the major central banks have pledged to cease providing cheap money to the markets, the entire thing is on the precipice of complete collapse as interest rates soar. It happened in the late 20’s when the Federal Reserve cut off cheap money to markets, and its going to happen here.
One can expect a series of market ups followed by heavy market downs. It was once buy the dip, now its sell the rally.
I’m wondering-
If the stock market tanks and all the imaginary money dissapears, will inflation slow down?
Eventually.
Took several years, and a deep recession, in the late 1970s and early 80s.