Economy crash =/= stock market crash?

sevenhills

InvesterJones said:

In short, their aim is stable prices (ie inflation target of 2%) and maximum employment.

I am sure stable and low inflation help the economy, but why single out employment?
The government are in charge of factors that help low unemployment, such as education, training and benefit rates.

InvesterJones

sevenhills said:

InvesterJones said:

In short, their aim is stable prices (ie inflation target of 2%) and maximum employment.

I am sure stable and low inflation help the economy, but why single out employment?

Are you asking me, or expecting Jerome Powell to come and answer?

I don't know why the fed have that as their target, I presume they consider it useful for the economy. BoE don't set such.

Type_45

InvesterJones said:

sevenhills said:

InvesterJones said:

In short, their aim is stable prices (ie inflation target of 2%) and maximum employment.

I am sure stable and low inflation help the economy, but why single out employment?

Are you asking me, or expecting Jerome Powell to come and answer?

I don't know why the fed have that as their target, I presume they consider it useful for the economy. BoE don't set such.

Employment is certainly being held forth as an indicator at the moment because of the current good numbers.

But employment is a lagging indicator of a recession.  Layoffs start AFTER a recession has begun.

Type_45

Prism said:

Type_45 said:

A pivot in policy could be as little as pausing tightening, all the way to QE.  It is a ceasing of tightening, which is their stated aim at this point.

And yes, decreasing rates will boost equities, which is the melt up I have been talking about for months.  It will be followed by a massive crash.

So if the central banks do manage to help us avoid recession and the general results of that like unemployment, lower taxes, lower company profits and failing companies - why would the equity markets crash? How about the bond markets?

I can see some form of crash if we do go into recession, but inflation and standard of living are not enough on their own.

I believe we are already in a recession.  And if not, we definitely soon will be.

Type_45

Since I bought VANECK UCITS ETFS VANECK VECTORS JNR GOLD MIN  (GJGB) on 19 April its lost 27.85% of it's value.  An absolute horror show.  Haemorrhages money pretty much every day.

I should have made the decision to have a certain stop on it and sold it before now.  I don't feel I can do that anymore.

It currently represents 13.40% of my portfolio, so it's not hurting too much.  It's just annoying.

Of course, it pales into insignificance compared to my crypto losses.

GSP

Type_45 said:

Since I bought VANECK UCITS ETFS VANECK VECTORS JNR GOLD MIN  (GJGB) on 19 April its lost 27.85% of it's value.  An absolute horror show.  Haemorrhages money pretty much every day.

I should have made the decision to have a certain stop on it and sold it before now.  I don't feel I can do that anymore.

It currently represents 13.40% of my portfolio, so it's not hurting too much.  It's just annoying.

Of course, it pales into insignificance compared to my crypto losses.

Well as long as you can still afford enough baked beans to keep you going between 3 months and what is it 24 months now of ‘rough times ahead’.
And also enough around you to protect your ‘wealth’ what’s left of it in a world where ‘currency’ has a new meaning and trades are done on a daily basis to stay alive.
Thinking something as bad as Zombie fleasheaters the impression you give how bad things will be.

incidentally, if you say nearly 15% of your portfolio is a horrow show, but this pales into insignificance of your cryto losses, just how well are you doing?

masonic

Type_45 said:

Since I bought VANECK UCITS ETFS VANECK VECTORS JNR GOLD MIN  (GJGB) on 19 April its lost 27.85% of it's value.  An absolute horror show.  Haemorrhages money pretty much every day.

I should have made the decision to have a certain stop on it and sold it before now.  I don't feel I can do that anymore.

It currently represents 13.40% of my portfolio, so it's not hurting too much.  It's just annoying.

Of course, it pales into insignificance compared to my crypto losses.

It's a shame I was unable to convince you to sell out at an 18% loss a month ago. Searching for gold to mine is an expensive venture and heavily dependent on inexpensive capital and the promise of jam tomorrow. One could draw comparisons to tech stocks. Then again, I was wrong about crypto, I thought $30k was around the bottom for BTC. I suppose this is the danger with some 'alternative assets'... frying pan --> fire.

On unemployment, I think the current shortage of labour has a lot to do with central banks taking their hawkish stance, since not only do we have full employment, there are more jobs than can currently be filled, so a mild recession will not see unemployment become a problem to the extent it might have done in the past. It is a dangerous game to play, though, as a deep recession will be more harmful than a period of high inflation, and interest rates will do little to impact the supply-side inflation we are currently facing. Gives them somewhere to go if it hits the fan, which is probably the main reason for the tightening. Either they play it right, and get to level off / pause, or overshoot and need to go into reverse.

InvesterJones

Type_45 said:

InvesterJones said:

sevenhills said:

InvesterJones said:

In short, their aim is stable prices (ie inflation target of 2%) and maximum employment.

I am sure stable and low inflation help the economy, but why single out employment?

Are you asking me, or expecting Jerome Powell to come and answer?

I don't know why the fed have that as their target, I presume they consider it useful for the economy. BoE don't set such.

Employment is certainly being held forth as an indicator at the moment because of the current good numbers.

No, that's been the fed's mandate for several years now, and it's still not in the BoE's mandate. Neither the fed or the BoE have recession/avoidance as part of their mandates, though of course recessions affect (and are affected by) their actual target indicators.

Type_45

GSP said:

Type_45 said:

Since I bought VANECK UCITS ETFS VANECK VECTORS JNR GOLD MIN  (GJGB) on 19 April its lost 27.85% of it's value.  An absolute horror show.  Haemorrhages money pretty much every day.

I should have made the decision to have a certain stop on it and sold it before now.  I don't feel I can do that anymore.

It currently represents 13.40% of my portfolio, so it's not hurting too much.  It's just annoying.

Of course, it pales into insignificance compared to my crypto losses.

Well as long as you can still afford enough baked beans to keep you going between 3 months and what is it 24 months now of ‘rough times ahead’.
And also enough around you to protect your ‘wealth’ what’s left of it in a world where ‘currency’ has a new meaning and trades are done on a daily basis to stay alive.
Thinking something as bad as Zombie fleasheaters the impression you give how bad things will be.

incidentally, if you say nearly 15% of your portfolio is a horrow show, but this pales into insignificance of your cryto losses, just how well are you doing?

What % is your portfolio down from its highest point?

Type_45

masonic said:

Type_45 said:

Since I bought VANECK UCITS ETFS VANECK VECTORS JNR GOLD MIN  (GJGB) on 19 April its lost 27.85% of it's value.  An absolute horror show.  Haemorrhages money pretty much every day.

I should have made the decision to have a certain stop on it and sold it before now.  I don't feel I can do that anymore.

It currently represents 13.40% of my portfolio, so it's not hurting too much.  It's just annoying.

Of course, it pales into insignificance compared to my crypto losses.

It's a shame I was unable to convince you to sell out at an 18% loss a month ago. Searching for gold to mine is an expensive venture and heavily dependent on inexpensive capital and the promise of jam tomorrow. One could draw comparisons to tech stocks. Then again, I was wrong about crypto, I thought $30k was around the bottom for BTC. I suppose this is the danger with some 'alternative assets'... frying pan --> fire.

On unemployment, I think the current shortage of labour has a lot to do with central banks taking their hawkish stance, since not only do we have full employment, there are more jobs than can currently be filled, so a mild recession will not see unemployment become a problem to the extent it might have done in the past. It is a dangerous game to play, though, as a deep recession will be more harmful than a period of high inflation, and interest rates will do little to impact the supply-side inflation we are currently facing. Gives them somewhere to go if it hits the fan, which is probably the main reason for the tightening. Either they play it right, and get to level off / pause, or overshoot and need to go into reverse.

The gold miners and crypto were a mistake, without which I'd be doing better in my portfolio than 99% of small investors.

And I'd be doing even better still had I stuck to my guns from September 2021 when I went into purely cash and gold.  But I was too much of a visionary, went too early, the market kept going up, and I jumped back in.

I had the right ideas but I was ahead of my time and my gambling instincts took over.  We live and learn.