re: Does the Dow finish the year above or below 30k?

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Really? If it goes down 6%, that'll be super meaningful?

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First, let's correct something: per the Dow's closing yesterday, dropping below 30k would require a drop of 8%.

Second, "super meaningful" is your poor interpretation of what I said. It would be another indicator of incoming economic problems. If you consider that "super meaningful" or not is up to you.

Next, the Dow usually goes up from 11/01-01/01. This means that a drop of 6% over the course of that period would be very abnormal.

Now add to this that we're looking at a likely recession starting in Q4 2023 or Q1 2024.

All that taken together, yes. The Dow dropping 8+% during the busiest time of the year with a possible recession looming would indeed mean "there are bigger things to worry about than the Dow."

Equal weight SP already took out the March lows. The SPY will eventually once the generals follow the soldiers.

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I believe you have been saying this since 2021. You do back a lot of it with data but what does it mean if you have been crying wolf for last few years? Do you figure if you keep saying it that you can eventually say i was right? I'm not saying in 2024 there wont be a recession but you saying it over and over again kind of takes the shine off of your post.

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That's very fair, and I get it. I've posted before (and will many times again ) that I severely underestimated the desire of consumers to maintain their lifestyles in the face of constant high inflation by loading those increasing costs onto the backs of their credit cards. The problem is that we are starting to hit the breaking point for more and more consumers, as witnessed by the rise in credit card delinquencies and sub-prime car loan defaults. With credit card interest rates running north of 20%, student loan repayments starting back and continued inflation (especially in food and shelter still rising and gasoline/diesel still high) and wages continuing to be outpaced by inflation, the longer this is the status quo, the more those delinquencies and defaults are going to expand (throughout the lower brackets and then rise upward). There's simply no other option than a strong economic downturn from the popping of the credit bubble that's been created. It's not "if", but rather "when".

I'm willing to listen objectively if someone can see a path forward that leads to Yellen's "soft landing" and wants to take the time and effort to explain it.

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First, let's correct something: per the Dow's closing yesterday, dropping below 30k would require a drop of 8%.

Second, "super meaningful" is your poor interpretation of what I said. It would be another indicator of incoming economic problems. If you consider that "super meaningful" or not is up to you.

Next, the Dow usually goes up from 11/01-01/01. This means that a drop of 6% over the course of that period would be very abnormal.

Now add to this that we're looking at a likely recession starting in Q4 2023 or Q1 2024.

All that taken together, yes. The Dow dropping 8+% during the busiest time of the year with a possible recession looming would indeed mean "there are bigger things to worry about than the Dow."

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I mean, the S and P just went down ~10% since August 1st. What are we to make of that? Recession? Meaningful negatives?

I'm just ETA: "not" as confident as you that seemingly random volatility is so clearly telling us anything. I submit that the Dow could easily go down that amount and it essentially be meaningless.

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First, let's correct something: per the Dow's closing yesterday, dropping below 30k would require a drop of 8%.

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Sure, I was only responding to the numbers you posted, I didn't go check them.

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Except that I'm not doing that. I even explained that I would consider it as nothing more than another indicator of upcoming economic problems, but you seem to be hellbent on framing it some other way. It's concerning that my giving of such a benign answer seems to have triggered you like a Gazan getting a Menorah as a Christmas gift.

Do you a hug? Maybe an intervention?

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Wait what? You said it would be a terrible harbinger if the Dow were down 6% in 2 months. (You've since clarified 8%, but at the time you said going from 32K to 30K, so I just did the math on that - as I don't track the Dow at all ever.)

I'm not triggered, I'm merely saying I'm confused about where you are deriving such certainty of meaning about such a mundane move in an equity index over not that short a period of time. I'm also saying I don't agree with that view point.

What am I mis-framing? Maybe 8% would get my attention a little more, but 6% is just random noise in my world.

I would submit that you see a recession signal around every corner. That's fine, I've been there before.

Maybe we should discuss if the DOW will end the year above or below 34,000.

OK, sounds like wires are crossed here. Here is exactly what you said:

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If it drops below 30k by the end of this year, there will be far bigger things to worry about than the Dow.

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It really doesn't seem like I'm exaggerating what you were implying here, but...I guess I am? I mean, I do agree that - almost by definition - we ALWAYS have "far bigger things to worry about" than random market noise. But I don't think that's what you meant?

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There's no one signal but rather looking at multiple indicators and taking them in context. As I stated to FLO, I am all ears to hear how someone (like yourself, I guess) sees us not going through a recession in the coming months.

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Coming months? That's awfully broad. Care to dial that in some?

A recession is certainly possible. As I've said, I was definitely expecting worse things to happen WAY before now. But I think you are off on some of your (personal) debt analysis. Median, real net worth is up a lot in the past few years, blunting the effects of inflation.

It would not surprise me at all if we had a soft (or no) landing.

On the other side of it, I am seeing some pretty severe weakness in multifamily - but not from the standpoint of occupancy...rather, from the standpoint of bad owners who bought at the peak with massive leverage. So, I think there's going to be a lot of bloodletting as the distressed guys (me) move in for the kill. But there is A LOT of cash sitting in PE funds on the sidelines for such things, so my bigger worry is that the distress won't be nearly as bad as I am hoping for.

This is true in corporate credit as well. People seem to like to point to the levered loan market and say "disaster coming!". But, even better fundamentals there. No maturity wall to speak of until at least 2025. And any companies facing real headwinds - there's literally $1 trillion+ of PE money standing by to shore these cos up.

etc.

TL;DR - I can see asset price difficulties (opportunities) - but that's more a capital structure problem than an actual economic problem.

Oh my goodness! Scrolling thru my Ric Flair .gifs