Becoming more bearish

BananaRepublic

masonic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

itwasntme001 said:

BananaRepublic said:

itwasntme001 said:

It is what happens when you have 0% interest rates, massive fiscal and monetary stimulus in many major economies and human nature driven by greed.

The interesting question is why did we not do all this in previous recessions like 2008 or early 90s?  I think the answer is inflation and the political will to unleash it.  Now it seems inflation is not a concern so they have more room for stimulus.  So every trade is essentially a view on inflation and no one can forecast inflation well at all.

The covid recession is fundamentally differerent from the GFC. Back then credit dried up, people couldn’t borrow, it hit the economy quite widely. This recession is hitting some parts of the economy badly, others not at all. Cafes and restaurant jobs will bounce back quickly, even though some businesses will go under staff will be rehired by new owners. There are many people working from home or on furlough, spending less than usual. Trades have been busier than usual, DIY is booming, people are having house extensions, loft conversions etc. 

We have as a nation run up huge debt, and somehow we will have to pay for that. Some say a wealth tax is coming. Whatever happens, spending on public services may be squeezed. 

That is because 2008 was a financial crisis and everything was done to recapitalise banks (and QE was seen as a way to kick start the economy).  But my point was that why wasn't any fiscal stimulus done back then to encourage growth - it seems it was only monetary (QE) and even that was not nearly as forthcoming as we saw last March?  Now you have huge fiscal stimulus after 10 years of austerity in the UK and 5-6 years in the US (until Trump cut corporate taxes).

To me it seems like policy makers are becoming less and less concerned about inflation because they saw QE did not generate any, so why not push ahead with fiscal.

For me the question is why testing and track and trace were so royally messed up. 

Ever built something from scratch in a matter of weeks?  Unfortunately Alexa is actually pretty dumb. Other countries systems aren't a roaring success either. 

They had months, not weeks. Some countries such as South Korea managed it. China has the virus under control. It might be our inability to obey lockdown, or government projects.

South Korea has had viruses previously.  Chinese state control is something that many would object to. Not just the Covidiots either. There's objections in Singapore now as appears that the data is going to be used for other purposes. The grass is far from being greener taken as a whole.

Germany did quite a good job though. Not an example of a country with previous experience.

Some have said that obedient and conformist nations did best. It’ll be interesting if studies of our behaviour appear, to see if rule breaking had an impact. 

csgohan4

BananaRepublic said:

masonic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

itwasntme001 said:

BananaRepublic said:

itwasntme001 said:

It is what happens when you have 0% interest rates, massive fiscal and monetary stimulus in many major economies and human nature driven by greed.

The interesting question is why did we not do all this in previous recessions like 2008 or early 90s?  I think the answer is inflation and the political will to unleash it.  Now it seems inflation is not a concern so they have more room for stimulus.  So every trade is essentially a view on inflation and no one can forecast inflation well at all.

The covid recession is fundamentally differerent from the GFC. Back then credit dried up, people couldn’t borrow, it hit the economy quite widely. This recession is hitting some parts of the economy badly, others not at all. Cafes and restaurant jobs will bounce back quickly, even though some businesses will go under staff will be rehired by new owners. There are many people working from home or on furlough, spending less than usual. Trades have been busier than usual, DIY is booming, people are having house extensions, loft conversions etc. 

We have as a nation run up huge debt, and somehow we will have to pay for that. Some say a wealth tax is coming. Whatever happens, spending on public services may be squeezed. 

That is because 2008 was a financial crisis and everything was done to recapitalise banks (and QE was seen as a way to kick start the economy).  But my point was that why wasn't any fiscal stimulus done back then to encourage growth - it seems it was only monetary (QE) and even that was not nearly as forthcoming as we saw last March?  Now you have huge fiscal stimulus after 10 years of austerity in the UK and 5-6 years in the US (until Trump cut corporate taxes).

To me it seems like policy makers are becoming less and less concerned about inflation because they saw QE did not generate any, so why not push ahead with fiscal.

For me the question is why testing and track and trace were so royally messed up. 

Ever built something from scratch in a matter of weeks?  Unfortunately Alexa is actually pretty dumb. Other countries systems aren't a roaring success either. 

They had months, not weeks. Some countries such as South Korea managed it. China has the virus under control. It might be our inability to obey lockdown, or government projects.

South Korea has had viruses previously.  Chinese state control is something that many would object to. Not just the Covidiots either. There's objections in Singapore now as appears that the data is going to be used for other purposes. The grass is far from being greener taken as a whole.

Germany did quite a good job though. Not an example of a country with previous experience.

Some have said that obedient and conformist nations did best. It’ll be interesting if studies of our behaviour appear, to see if rule breaking had an impact. 

Japan although not formally under lockdown previously did well, their citizens on the whole obeyed and did the 'right' thing. Sadly some people in this country thought Covid doesn't apply to them and partied the night without thinking of the consequences and disobeyed the lockdown rules. Not to mention a certain Mr Cummings. 

On the same note, the track and trace system is only as good as the people using it. It isn't mandatory and people don't need to put their details in, real anyways.  Once you make it mandatory or linked to your own personal ID, people you would hope would adhere better. But not always, even Korea they had shut some of the hospitality sector due to rising cases. 

[Deleted User]

U.K. lost months because it initially rejected the AAPL/Googl model for its own which was so clunky it sucked the life out of phone batteries. It was a dismal failure, born of the worst of motives, quietly modified (abandoned) after the early summer Isle Of Wight fiasco.

MaxiRobriguez

There's not many alternatives for people seeking yield. Stocks will remain overpriced until bonds offer more people an alternative.

Type_45

NedS said:

Am I the only one becoming more bearish?

We all know stock markets are often dissociated from the economy, but prices are starting to look like real bubble territory to me. I can not see how valuations now can be significantly higher than they were at the start of the year, before Covid. That means, either valuations were cheap a year ago which I don't believe, or they are inflated now and in bubble territory.

What do others think? Do you have cash on the sidelines? What would be required for you to deploy that cash?

I'm increasingly thinking the Covid crash was the pre-crash to the main event. As Mr Buffett said, be fearful when others are greedy. For the moment I'm riding the gravy train higher but I'm starting to get pretty fearful. Maybe it's time to keep a close eye on the stop losses, especially as bonds no longer seem to be negatively correlated with equities nor offer much protection in a crash.

The answer to your question is that when central banks create new money via QE, it goes into the stock market.

So when the bank of England announces £200bn of QE, you can expect stocks to rise accordingly. 

There is a direct correlation.

There's a good YouTube video somewhere which explains this quite well.

BananaRepublic

csgohan4 said:

BananaRepublic said:

masonic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

itwasntme001 said:

BananaRepublic said:

itwasntme001 said:

It is what happens when you have 0% interest rates, massive fiscal and monetary stimulus in many major economies and human nature driven by greed.

The interesting question is why did we not do all this in previous recessions like 2008 or early 90s?  I think the answer is inflation and the political will to unleash it.  Now it seems inflation is not a concern so they have more room for stimulus.  So every trade is essentially a view on inflation and no one can forecast inflation well at all.

The covid recession is fundamentally differerent from the GFC. Back then credit dried up, people couldn’t borrow, it hit the economy quite widely. This recession is hitting some parts of the economy badly, others not at all. Cafes and restaurant jobs will bounce back quickly, even though some businesses will go under staff will be rehired by new owners. There are many people working from home or on furlough, spending less than usual. Trades have been busier than usual, DIY is booming, people are having house extensions, loft conversions etc. 

We have as a nation run up huge debt, and somehow we will have to pay for that. Some say a wealth tax is coming. Whatever happens, spending on public services may be squeezed. 

That is because 2008 was a financial crisis and everything was done to recapitalise banks (and QE was seen as a way to kick start the economy).  But my point was that why wasn't any fiscal stimulus done back then to encourage growth - it seems it was only monetary (QE) and even that was not nearly as forthcoming as we saw last March?  Now you have huge fiscal stimulus after 10 years of austerity in the UK and 5-6 years in the US (until Trump cut corporate taxes).

To me it seems like policy makers are becoming less and less concerned about inflation because they saw QE did not generate any, so why not push ahead with fiscal.

For me the question is why testing and track and trace were so royally messed up. 

Ever built something from scratch in a matter of weeks?  Unfortunately Alexa is actually pretty dumb. Other countries systems aren't a roaring success either. 

They had months, not weeks. Some countries such as South Korea managed it. China has the virus under control. It might be our inability to obey lockdown, or government projects.

South Korea has had viruses previously.  Chinese state control is something that many would object to. Not just the Covidiots either. There's objections in Singapore now as appears that the data is going to be used for other purposes. The grass is far from being greener taken as a whole.

Germany did quite a good job though. Not an example of a country with previous experience.

Some have said that obedient and conformist nations did best. It’ll be interesting if studies of our behaviour appear, to see if rule breaking had an impact. 

Japan although not formally under lockdown previously did well, their citizens on the whole obeyed and did the 'right' thing. Sadly some people in this country thought Covid doesn't apply to them and partied the night without thinking of the consequences and disobeyed the lockdown rules. Not to mention a certain Mr Cummings. 

On the same note, the track and trace system is only as good as the people using it. It isn't mandatory and people don't need to put their details in, real anyways.  Once you make it mandatory or linked to your own personal ID, people you would hope would adhere better. But not always, even Korea they had shut some of the hospitality sector due to rising cases. 

Your first paragraph is based on assumptions. I would want to see a proper analysis, before drawing conclusions. 

As for the second, no the UK government screwed up big time, as per most big UK government IT projects cf the NHS IT project that was a miserable and expensive failure. 

csgohan4

BananaRepublic said:

csgohan4 said:

BananaRepublic said:

masonic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

itwasntme001 said:

BananaRepublic said:

itwasntme001 said:

It is what happens when you have 0% interest rates, massive fiscal and monetary stimulus in many major economies and human nature driven by greed.

The interesting question is why did we not do all this in previous recessions like 2008 or early 90s?  I think the answer is inflation and the political will to unleash it.  Now it seems inflation is not a concern so they have more room for stimulus.  So every trade is essentially a view on inflation and no one can forecast inflation well at all.

The covid recession is fundamentally differerent from the GFC. Back then credit dried up, people couldn’t borrow, it hit the economy quite widely. This recession is hitting some parts of the economy badly, others not at all. Cafes and restaurant jobs will bounce back quickly, even though some businesses will go under staff will be rehired by new owners. There are many people working from home or on furlough, spending less than usual. Trades have been busier than usual, DIY is booming, people are having house extensions, loft conversions etc. 

We have as a nation run up huge debt, and somehow we will have to pay for that. Some say a wealth tax is coming. Whatever happens, spending on public services may be squeezed. 

That is because 2008 was a financial crisis and everything was done to recapitalise banks (and QE was seen as a way to kick start the economy).  But my point was that why wasn't any fiscal stimulus done back then to encourage growth - it seems it was only monetary (QE) and even that was not nearly as forthcoming as we saw last March?  Now you have huge fiscal stimulus after 10 years of austerity in the UK and 5-6 years in the US (until Trump cut corporate taxes).

To me it seems like policy makers are becoming less and less concerned about inflation because they saw QE did not generate any, so why not push ahead with fiscal.

For me the question is why testing and track and trace were so royally messed up. 

Ever built something from scratch in a matter of weeks?  Unfortunately Alexa is actually pretty dumb. Other countries systems aren't a roaring success either. 

They had months, not weeks. Some countries such as South Korea managed it. China has the virus under control. It might be our inability to obey lockdown, or government projects.

South Korea has had viruses previously.  Chinese state control is something that many would object to. Not just the Covidiots either. There's objections in Singapore now as appears that the data is going to be used for other purposes. The grass is far from being greener taken as a whole.

Germany did quite a good job though. Not an example of a country with previous experience.

Some have said that obedient and conformist nations did best. It’ll be interesting if studies of our behaviour appear, to see if rule breaking had an impact. 

Japan although not formally under lockdown previously did well, their citizens on the whole obeyed and did the 'right' thing. Sadly some people in this country thought Covid doesn't apply to them and partied the night without thinking of the consequences and disobeyed the lockdown rules. Not to mention a certain Mr Cummings. 

On the same note, the track and trace system is only as good as the people using it. It isn't mandatory and people don't need to put their details in, real anyways.  Once you make it mandatory or linked to your own personal ID, people you would hope would adhere better. But not always, even Korea they had shut some of the hospitality sector due to rising cases. 

Your first paragraph is based on assumptions. I would want to see a proper analysis, before drawing conclusions. 

As for the second, no the UK government screwed up big time, as per most big UK government IT projects cf the NHS IT project that was a miserable and expensive failure. 

While I don't have figures and only anecdotal evidence, just looking at the news over year, countless fines awarded to individuals and business flouting lockdown rules, that is undisputable. 

How does one analyze behavior which cannot be objectified? who is going to admit in a survey they flout the rules?

Also Covid is not spread by people staying at home generally, but by people mixing and no obeying social distancing and rules at the time. Japan has among the lowest death rates in the world, not to mention infection rates, why is that? same with Singapore and Korea. Test and trace may play a part, but not all. 

quirkydeptless

According to the Chinese zodiac, 2021 is the Year of the Ox. Could this imply a Bull market, well at least in China?   

As for myself, although I might have got a bit grumpier and hairier during the lockdowns, I'll only know for sure about this question if I start heading to the woods for a …

dunroving

csgohan4 said:

BananaRepublic said:

csgohan4 said:

BananaRepublic said:

masonic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

itwasntme001 said:

BananaRepublic said:

itwasntme001 said:

It is what happens when you have 0% interest rates, massive fiscal and monetary stimulus in many major economies and human nature driven by greed.

The interesting question is why did we not do all this in previous recessions like 2008 or early 90s?  I think the answer is inflation and the political will to unleash it.  Now it seems inflation is not a concern so they have more room for stimulus.  So every trade is essentially a view on inflation and no one can forecast inflation well at all.

The covid recession is fundamentally differerent from the GFC. Back then credit dried up, people couldn’t borrow, it hit the economy quite widely. This recession is hitting some parts of the economy badly, others not at all. Cafes and restaurant jobs will bounce back quickly, even though some businesses will go under staff will be rehired by new owners. There are many people working from home or on furlough, spending less than usual. Trades have been busier than usual, DIY is booming, people are having house extensions, loft conversions etc. 

We have as a nation run up huge debt, and somehow we will have to pay for that. Some say a wealth tax is coming. Whatever happens, spending on public services may be squeezed. 

That is because 2008 was a financial crisis and everything was done to recapitalise banks (and QE was seen as a way to kick start the economy).  But my point was that why wasn't any fiscal stimulus done back then to encourage growth - it seems it was only monetary (QE) and even that was not nearly as forthcoming as we saw last March?  Now you have huge fiscal stimulus after 10 years of austerity in the UK and 5-6 years in the US (until Trump cut corporate taxes).

To me it seems like policy makers are becoming less and less concerned about inflation because they saw QE did not generate any, so why not push ahead with fiscal.

For me the question is why testing and track and trace were so royally messed up. 

Ever built something from scratch in a matter of weeks?  Unfortunately Alexa is actually pretty dumb. Other countries systems aren't a roaring success either. 

They had months, not weeks. Some countries such as South Korea managed it. China has the virus under control. It might be our inability to obey lockdown, or government projects.

South Korea has had viruses previously.  Chinese state control is something that many would object to. Not just the Covidiots either. There's objections in Singapore now as appears that the data is going to be used for other purposes. The grass is far from being greener taken as a whole.

Germany did quite a good job though. Not an example of a country with previous experience.

Some have said that obedient and conformist nations did best. It’ll be interesting if studies of our behaviour appear, to see if rule breaking had an impact. 

Japan although not formally under lockdown previously did well, their citizens on the whole obeyed and did the 'right' thing. Sadly some people in this country thought Covid doesn't apply to them and partied the night without thinking of the consequences and disobeyed the lockdown rules. Not to mention a certain Mr Cummings. 

On the same note, the track and trace system is only as good as the people using it. It isn't mandatory and people don't need to put their details in, real anyways.  Once you make it mandatory or linked to your own personal ID, people you would hope would adhere better. But not always, even Korea they had shut some of the hospitality sector due to rising cases. 

Your first paragraph is based on assumptions. I would want to see a proper analysis, before drawing conclusions. 

As for the second, no the UK government screwed up big time, as per most big UK government IT projects cf the NHS IT project that was a miserable and expensive failure. 

While I don't have figures and only anecdotal evidence, just looking at the news over year, countless fines awarded to individuals and business flouting lockdown rules, that is undisputable. 

How does one analyze behavior which cannot be objectified? who is going to admit in a survey they flout the rules?

Also Covid is not spread by people staying at home generally, but by people mixing and no obeying social distancing and rules at the time. Japan has among the lowest death rates in the world, not to mention infection rates, why is that? same with Singapore and Korea. Test and trace may play a part, but not all. 

Although some individual aspects of behaviour are difficult to quantify accurately, it is possible to develop some indicators at least, using existing technology:
ANPR technology to calculate the % of cars on the street that are outside of their registration area.
Data from Google maps and other route-mapping technology showing searches for routes outside of the area of the start point, or more than a certain distance from the start point.
CCTV - % of people not wearing masks in places they should (food stores, etc.).
In-person credit and debit card use outside of x miles from account address.

All of these data could be anonymised, but even then I think UK society would not support what they see as a Big Brother approach.
[Sorry, just realised this takes the discussion of-topic. My own take on the OP is that paradoxically, I get nervous every day I log in and see that the value of my investments have increased day after day]

bowlhead99

dunroving said

[Sorry, just realised this takes the discussion of-topic. My own take on the OP is that paradoxically, I get nervous every day I log in and see that the value of my investments have increased day after day]

Yes, if you were thinking that the world markets were pretty much fully / fairly valued at the start of last year, with some areas looking 'a bit toppy', and we know this year has been a bit of a write off in terms of productivity and governments needing to borrow a lot of money and drop interest rates and taxes to keep things afloat, it's a natural reaction to breathe a sigh of relief that actually the portfolio has been able to get back to where it had started without taking years to do it.

But then if the portfolio still  keeps on going up and up while the world hasn't fixed its problems or reversed its QE or interest rates or paid off its debts or got everyone back working, I can well imagine some people will be thinking 'haha, I'm great at picking funds and allocating my portfolio' while more circumspect investors may be feeling almost guilty that their portfolios are still going up and expecting it to reverse at any time.