Economy crash =/= stock market crash?

Type_45

Prism said:

Type_45 said:

Prism said:

Type_45 said:

I listen to some serious analysts who are data-driven.

One example of that is Jamie Dimon, CEO of JP Morgan.  He has access to data which you nor I have access to.  And neither do any of CNBC's fake prophets such as Jim Cramer, who is the very epitome of a reverse indicator.

JP Morgan's chief economist disagrees with what Jamie Dimon (who is not an economist) says. Neither of them, nor anyone else really knows what will happen.

“An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.”

Agreed, they are all guessing. So why do you listen to Jamie Dimon since he is just guessing too?

"As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know."

What we do know is that we have unsustainable debt levels and all we can do is print more money.  It cannot possibly end well.

adindas

Type_45 said:

Prism said:

Type_45 said:

Prism said:

Type_45 said:

I listen to some serious analysts who are data-driven.

One example of that is Jamie Dimon, CEO of JP Morgan.  He has access to data which you nor I have access to.  And neither do any of CNBC's fake prophets such as Jim Cramer, who is the very epitome of a reverse indicator.

JP Morgan's chief economist disagrees with what Jamie Dimon (who is not an economist) says. Neither of them, nor anyone else really knows what will happen.

“An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.”

Agreed, they are all guessing. So why do you listen to Jamie Dimon since he is just guessing too?

"As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know."

What we do know is that we have unsustainable debt levels and all we can do is print more money.  It cannot possibly end well.

Do you mean the Fed will need to print more money now, like what they did during COVID-19 to be used to buy bonds, distributing stimulus cheque ??

Zola.

Type_45 said:

Prism said:

Type_45 said:

Prism said:

Type_45 said:

I listen to some serious analysts who are data-driven.

One example of that is Jamie Dimon, CEO of JP Morgan.  He has access to data which you nor I have access to.  And neither do any of CNBC's fake prophets such as Jim Cramer, who is the very epitome of a reverse indicator.

JP Morgan's chief economist disagrees with what Jamie Dimon (who is not an economist) says. Neither of them, nor anyone else really knows what will happen.

“An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.”

Agreed, they are all guessing. So why do you listen to Jamie Dimon since he is just guessing too?

"As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know."

What we do know is that we have unsustainable debt levels and all we can do is print more money.  It cannot possibly end well.

I don't disagree 

masonic

Type_45 said:

What we do know is that we have unsustainable debt levels and all we can do is print more money.  It cannot possibly end well.

'Unsustainable' usually means that it is not possible for something to stay as it is. It is not clear if you mean that bad things will happen if debt levels remain at this level, or you are merely suggesting that more money printing is inevitable. Clearly this level of debt could be maintained without bad things happening, but it behoves central banks to reduce it in order to give themselves options when the next crisis comes along. Though I have been looking out for it, I've not yet seen any news to suggest the previously announced policy of dealing with it has been materially changed. Only some isolated commentary hinting at a more dovish stance. Bond markets reacted to those comments briefly, but quickly returned to their original positioning, suggesting they don't believe anything has changed. Meanwhile, inflation has been chipping away at debts and will continue to do so.

It would take a lack of imagination to conclude that things cannot possibly end well. Even if there were an 80% crash in stockmarkets, or some of the other things you have predicted come true, the biggest resource many people have is their human capital. Historically this has been greatly undervalued and exploited by those in more privileged positions. We've come on in leaps and bounds since the industrial revolution, but even recently, I've never known a time as good to be selling your labour into a market with such labour shortages. It does go some way to explaining why policy makers have been emboldened to hike interest rates and tighten monetary policy even with the threat of recession on the horizon. But it is true to say there are many possible paths forward from here, and not all of them lead to good destinations. However, not all of them lead to poor endings either.

Zola.

It is somewhat fascinating though... are all nations just prepared for the debt levels to increase forever.. without ever paying these debts back in a meaningful way? 

How can that be the case? 

InvesterJones

Zola. said:

It is somewhat fascinating though... are all nations just prepared for the debt levels to increase forever.. without ever paying these debts back in a meaningful way? 

How can that be the case? 

They are paying them back, they're just taking out new debts at the same time. So people will continue to lend to them since they do get their money back + the agreed interest.

Zola.

Aren't "they" largely the same people? Central banks and government, for a large part? 

Feels like the world is taking out lots of new credit cards to pay off the slightly smaller credit card (yet still astronomically high debt).....and only ever getting into a deeper debt hole... there must be a tipping point at some stage?

masonic

Zola. said:

Aren't "they" largely the same people? Central banks and government, for a large part? 

Feels like the world is taking out lots of new credit cards to pay off the slightly smaller credit card (yet still astronomically high debt).....and only ever getting into a deeper debt hole... there must be a tipping point at some stage?

There is some separation, although how effective it is is questionable. Governments change with some regularity, so a bit of independence is required to prevent them from raiding the cookie jar in the knowledge the next lot will have to deal with the consequences. They do, however, often have control over who finds their way onto the steering committee, so are not without influence.

When you are debtor in your own sovereign currency, then you will always be good for your repayments, as you can create the money used for this. The consequence is inflation, which is borne by those who are holding your cash. This is also linked to exchange rates, if you are operating a looser policy than other nations. It becomes a concern when you start raising interest rates, as any new debt you issue costs you more money to service, so without increases in GDP to support it, inflation becomes difficult to control. It could be speculated that this is where we find ourselves today, but much of the current inflation is explainable by external factors. That doesn't mean to say self-inflicted inflation is not waiting in the wings. This is why central banks seem willing to risk a bit of economic stagnation in order to make at least some headway into tightening the money supply now that an opportunity to do so has presented itself.

Type_45

The markets currently puking at the prospect of the ECB raising rates must be a shock to the "it's priced in" brigade.

masonic

Type_45 said:

The markets currently puking at the prospect of the ECB raising rates must be a shock to the "it's priced in" brigade.

The "puking" must be happening in a parallel universe. No discernible impact on my investements, including my Vanguard Europe ETF.