re: Soft landing: Did the Fed really somehow achieve the impossible?

quote:

---

If prices contracted back to where we would have been with 3% inflation, would that be bad?

---

If demand dropped so much to justify a 8%+ decrease in prices we are mega fricked

Linking to an interesting chart here. It is the S&P, but it allows you to inflation adjust with real inflation numbers. The takeaway is that even though we are matching the S&P numbers from 2021, the value is actually down 10%. I see the market with plenty of upside based on the fact that inflation adjusted, it still has a bunch of catching up to do.

https://www.macrotrends.net/2324/sp-500-historical-chart-data

(make sure to check "Inflation-Adjusted" and go for a 5 year view)

quote:

---

march 2024 will be interesting.

Fed created Bank Term Funding Program (BTFP) and gave out loans to banks to use for liquidity during the banking crisis earlier this year. Those loans have to be paid back March '24

there's over 120b in loans out there.

---

You don't see a reissuance of debt as a likely scenario?

most likely they'll just extend the program so there isnt another liquidity crisis.

quote:

---

Is anybody buying the 2024 crash that Harry Dent is predicting? Is he full of crap or does he have a feel for what's going on?

---

So a rate cut will indicate trouble for market participants. But a crash probably won't happen without a huge spike in unemployment or corporate credit. If you want to bet on it it's extremely cheap right now for a high convexity payout.

quote:

---

But a crash probably won't happen without a huge spike in unemployment or corporate credit

---

What does Google say about bankruptcies and current and predicted layoffs....? You may not like it

quote:

---

But a crash probably won't happen without a huge spike in unemployment or corporate credit

What does Google say about bankruptcies and current and predicted layoffs....? You may not like i

---

Will mass retirement prevent mass layoffs? 75 million boomers are set to retire by 2030.

Money printer go brrrr

quote:

---

I have eaten at a breakfast place for years, generally getting the same thing every time. The other day my two eggs, bacon, hash browns and OJ came to $19 and change. $24 and change with tip. It wasn’t that long ago that the whole thing cost $15 or less. This is everywhere, including the grocery store. This is killing the working class. Our currency is being debased and it isn’t getting better.

---

And what has happened to your net worth over the same time period.

Also, groceries on average are NOT up 60%.

quote:

---

I get what you are saying, but if we get serious deflation the working class, assuming it holds significant debt, is going to get destroyed.

---

I agree with the sentiment, but I think the presentation is a bit backwards. Deflation comes from there being too much of a surplus of goods while there is also too little currency in the economy. You need some serious cuts to consumer spending to get there and the US consumer has shown that many aren't willing to make cuts like that unless absolutely forced to by shutting off the credit spigot.

With so much consumer debt at such high interest rates, if we get into a deflationary period it will be because we have already been in a recession long enough for unemployment to spike high and/or long enough for many consumers to default on their credit cards.

So if we see serious deflation, the middle class (and likely others) will have already been getting hammered.