'The Sky is Falling' Narrative

[Tim The Enchanter]

Thank you Chicken Little.

Layoffs are a sign the sky is falling. Twice in my life in this biz the sky has fallen on my head. I'm still standing.
Air does not weigh enough to do any damage, and I don't think my head is much harder than the average member here.
Many of whom have heads as hard as rock it seems.
Or is it full of rocks?

 

[George Hatch]

The market psychology is one of the fundamentals, so it very much does matter what perceptions people have of the situation.

 

[Tim The Enchanter]

The market psychology is one of the fundamentals, so it very much does matter what perceptions people have of the situation.

And it's a crazy world. Put that in your pipe and smoke it a while.
No wonder there are so many opinions out there.

 

[Pittsburgh Pete]

That's actually not the case. A lot of people who now have work, KNOW they wouldn't have without Trump. And, just as - if not more importantly, that is what they believe ... and I'd have to be in agreement.

Unemployment about 1% lower than when previous administration left office--and all it cost was a huge ding to the deficit and giving away the farm to the wealthy and corporations. They are still low paying jobs--crumbs to the lower income folks while top 10% singing all the way to the bank.

 

[Elliott]

WSJ opinion by Andy Puzder and Jon Hartley, 8/21/19:

"In addition to quantitative easing, $16 trillion in sovereign bonds with a negative yield are weighing down longer-term Treasury yields, as even low-yield U.S. bonds are a more desirable option for foreign investors. Moreover, the Treasury has elected to fund the rapidly increasing U.S. debt by issuing a high volume of short-term Treasury bills, putting significant upward pressure on the short end of the yield curve.

This combination of downward pressure on long-term rates and upward pressure on short-term rates is distorting the yield curve, wholly apart from the strength of the underlying economy, rendering it an unreliable harbinger of recession.

At this point, without materially worsening data from the real economy, an inverted yield curve should not be causing the exaggerated reaction we’re seeing in the stock and bond markets. Someday we’ll have a recession, but not soon. "

 

[Elliott]

 

[Joe Flacco]

The bond market is wrong.

They are going to see stocks going higher and higher and eventually they are going to get FOMO and sell bonds and buy equities. That would signal to me that global stocks are close to putting in a major top. Entering a period similiar to 2000-2015.

 

[Gobears81]

I always told myself that when one says "this time it's different", that is when you take cover. But in regards to the yield curve, I'm thinking that this time it's different, as the 2008 recession really did a number on a lot of people and it is too close in the rear view mirror for them to be anything but skeptical of the economy's success at this point. The flood of money into treasuries and bonds would differ than what it might be 20 or 30-years after a recession similar to what was seen in 2008. Not quite as bullish as Flacco, as I think the production metrics are sign of concern, as is world growth slowing and trade issues. The deficit doesn't offer much comfort either, although that is probably a longer-term issue. There's so much caution that it is already accounted for in prices though. Not sure if we are entirely out of the woods in the stock market as the Fed is probably going to disappoint on rate cuts, or the trajectory of rate cuts with evidence of inflation heating up. But the skepticism is creating some solid deals. Plus, I've seen something that hasn't been noticed in my town in recent memory - now hiring signs. Personally, I think the economy chugs along for the next year or two, not falling into a deep recession and not booming either.

 

[Randolph Kinney]

U.S. created 500,000 fewer jobs since 2018 than previously reported, new figures show

 

[Pittsburgh Pete]

U.S. created 500,000 fewer jobs since 2018 than previously reported, new figures show

That's got to be "Fake News!"