Economists, Celebrities And Reals
Notwithstanding a tough session in Asia, there was no sign of an out and out global meltdown Wednesday, following Wall Street's worst day in two years.
As some were quick to point out, Tuesday's losses for US shares on the heels of another dire inflation report merely erased gains from the previous four sessions, when stocks rode a wave of mechanical flows to a rebound from a three-week slide.
Nevertheless, it'd be foolish to downplay the rout. It could just as easily continue over the balance
I can’t believe I’m writing this, but I would be all for chair Gundlach’s approach and purple corduroy suits at this point, whatever the Fed breaks this time will be a lot harder to repair and will give a bigger edge to demagogues around the globe. I will gladly wear purple corduroys if we can avoid the demise of our allies and the return of the Don.
You may not like Gundlach, he is not the most likeable character. But Danny Blanchflower has some credentials here and this is his take. I happen to largely agree with him, though I am more in Gundlach’s camp. The optics of a Fed halt at this point is too risky. But they really need to slow down…..
https://www.politico.com/news/magazine/2022/09/08/dangerous-groupthink-at-the-federal-reserve-00055324
It’s not that I “don’t like Gundlach.” It’s that anything you hear from any of this people in public is irrelevant because they’re just doing it to be on TV and the only reason CNBC wants them on TV (or Bloomberg wants to interview them) is because this is a business. A media business. When you engage with it, either by reading Bloomberg articles (other than the stuff that’s on the terminal), or watching CNBC, you’re not an “investor.” You’re a consumer. You’re being monetized. If you want to know what Gundlach thinks, you need to figure out a way to get invited to a party he’s at and speak to him in private or be a client. The only thing you’re going to get from listening to him in public is a bunch of made-for-TV / made-for-press soundbites because, again, this is a business and you’re the customer.
Very much agree. Discussions here and personal experience of loss and gain have much more value and help me to gauge the quality of my gut, inform my risk tolerance and investment decisions. CNBC is an utter distraction that I turned off in 2001. Bloomberg TV has more value, but it’s still not worth the investment of my time.
Maybe a better description would be you are the product. Who’s paying the bills? Not the viewer.
The GFC and a subsequent career change turned me from a minuscule active investor into more of a passive observer, but even I figured out that these folks are full of hot air. The first thing that really struck me, especially if you tune into CNBC during the trading day, is that hardly anyone ever mentions timeline. If you’re savvy enough to parse that from the conversation, that’s one thing, but I’d say there are a lot of viewers who just don’t get that the scale and timeline that the talking heads are into are too vastly different from your own.
When out in public, as a consumer, it just really doesn’t feel like a recession. A slow-down yes. But a situation out of the Great Depression no. The struggle to get by is a little tighter but I don’t sense a panic at all.
There are no long lines in today’s world like there were in the 1930s, but the cage holding the poor is no less strong. This winter is not going to be good for 15-20% of our population who lack housing, food, and energy security. There would be more lines now, but there are no good places to line up.
I do realize that I’m in one of the top markets in the country, being that I’m literally across the river from Manhattan. But I’ll agree with Tom, above. I’ve been waiting to see people ‘trade down’ in my wine shop, but the bottom shelf is still languishing while people spend up for the inflation-adjusted higher end goods like crazy.
I like your comment. I do not imagine that people with real money in New York or Chicago or LA are impacted at all by the current market state, though they may be lamenting paper losses. Bottom line, they’ be fine just riding the wave to recovery.
One difference in this cycle is that the world is changing. Russia is going down. Ukraine, no longer a Russian satellite, is rising. As is NATO. And if all goes well in the next five years, oil will be less of a thing and green energy will be more clearly evolving and getting closer to realization. I expect we’ll also be constructing new and much safer nuclear plants.