Economy crash =/= stock market crash?

sevenhills

There has been negative news about house buying this week, didn't a house price crash happen before the 2008 crash?

Type_45

Janet Yellen:  "I was wrong about inflation".

Theatre of the Absurd.


They are not this incompetent.  They are lying.

Yellen has a degree in Economics from Yale University.

sevenhills

Type_45 said:

They are not this incompetent.  They are lying.
Yellen has a degree in Economics from Yale University.

Just because economists have studied at university does not mean they will all come to the same conclusion.
Even Jeremy Corbyn had an economist that agreed with his policies.

Type_45

sevenhills said:

Type_45 said:

They are not this incompetent.  They are lying.
Yellen has a degree in Economics from Yale University.

Just because economists have studied at university does not mean they will all come to the same conclusion.
Even Jeremy Corbyn had an economist that agreed with his policies.

Jeremy Corbyn's economist was never in the leadership team of the most powerful economic entity in the history of humanity.  Yellen is.

I, and many other ordinary people with no Economics qualifications, called this inflation many months ago.  Yellen et al claim they didn't see it coming.

They should resign immediately if that is the case.  And if they DID see it coming they should also resign.


They are either incompetent or lying.  One or the other.

Type_45

$200 oil is in play.

adindas

Type_45 said:

I, and many other ordinary people with no Economics qualifications, called this inflation many months ago.  Yellen et al claim they didn't see it coming.

Even a monkey could do a guess work like what you did. High Inflation is either coming or not. Like toss a fair coin, you have 50% probability of getting it right.

It is not just Yellen but the whole FOMC (Federal Open Market Committee) got it wrong (or not telling the truth) when November 2021 they said the inflation is just transitory and not there to stay. FOMC which include Powell and Brainard is the Federal Reserve committee makes key decisions about interest rates and the growth of the United States money supply

But who could know that Russia eventually invaded Ukraine causing Oil/Gas to skyrocketing, Food/Wheat supply shortages. The EU banned the Russian Oil causing trouble for themselves to find another alternatives of Russian oil and gas supplier.

Inflation such as shown by UBS that I posted previously is very difficult to model as they are a lot of unknown variables.

What is also difficult to know is how low the stock market could dive in this bear market. You have continuously claim it 80%, while no other experts have ever claim that. Without modelling  it is just a prophecy work.

Let see if you get it right. It might be right if China really Invades Taiwan.  A prophet get it right all the time.

bd10

Be it the Fed, BoE or the ECB, they've been way behind the curve, team transitory. Now I fear they risk a policy mistake. But having said that, if we assume that monetary policy is as much about actual policy decision as it is about signalling, I'd venture to speculate that the game plan was to hit us with an inflation surprise to skim off the first 5-10% of the debt pile we're sitting on with us - hopefully - not realising.

The LSE hosted a panel discussion many months back, think may have been first covid summer, anyways, subject was debt sustainability of EM countries. IMF's Zettelmeyer was on that panel. During the Q&A I raised the question whether it would not be the best solution for governments and central banks not to take inflation targetting too seriously for a while. Economists are usually never that shy of words, but Zettelmeyer and the others really tried not to answer my question. So it was obvious to me at least that the game plan is likely to be financial repression. Ironically, a key paper on that, which even includes a checklist and worked examples was published by none other than the IMF in 2011.

Now that the genie is out of the bottle, this strategy of debt liquidation comes at a cost: Marginally lower growth rates aside, central bank stability is at stake, that's serious, making the de facto wealth tax imposed on us almost look benign.

bd10

apologies, typo above: I meant to say central bank credibility is at stake...

wmb194

CNBC and Bloomberg TV are both available as part of my Virgin Media cable TV package and I think on Sky, too. You can also watch Bloomberg in the UK via its website and apps.

adindas

https://edition.cnn.com/2022/05/12/investing/stocks-bear-market/index.html

More than $7 trillion has been wiped out from the stock market this year By Paul R. La Monica, CNN Business May 12, 2022

There is also another article that about $2T+ of this money is currently sitting in saving account. The rest  is rotated to other safer assets or will disappear paying the debt, interest.

This money will be flowing back into the stock mark once the confidence in the stock market is restored. Sensible investors know keeping money in treasury Bond, Savings is a definitive money losing strategy in the long run. So the money will have to flow at some points into the stock market.

Smart money are waiting for the signal where the market is very close to  "capitulation"

https://www.investopedia.com/terms/c/capitulation.asp