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When do you expect the wheels to actually come off?
Posted on 12/21/22 at 8:26 am
Posted on 12/21/22 at 8:26 am
I feel like we said "2021, we are so screwed".
Then it was "with everyone flush with cash, 2022, we are so screwed".
Now we have 10 days left in 2022, daily household items are still sky high, vehicles are still off the charts, housing prices are still unsustainable even with the small tick down in areas like Austin, Denver, Phoenix, etc.
I'm just sitting here waiting for an "oh shite" moment, and outside of tech continuing to lay people off (unsurprisingly), we continue to be fed nothing-burgers.
Any new evidence out there that we are actually going to be in pain in 2023?
Then it was "with everyone flush with cash, 2022, we are so screwed".
Now we have 10 days left in 2022, daily household items are still sky high, vehicles are still off the charts, housing prices are still unsustainable even with the small tick down in areas like Austin, Denver, Phoenix, etc.
I'm just sitting here waiting for an "oh shite" moment, and outside of tech continuing to lay people off (unsurprisingly), we continue to be fed nothing-burgers.
Any new evidence out there that we are actually going to be in pain in 2023?
This post was edited on 12/21/22 at 8:26 am
13
Posted on 12/21/22 at 8:32 am to thegreatboudini
Not in my lifetime. We’ll carry on as a country like France. Free stuff for everyone and perpetual wars.
Posted on 12/21/22 at 8:34 am to thegreatboudini
My guess is it will mimic 2008-9. When people start to think the worst is over, it'll just be starting. I haven't seen the fear yet. When I start hearing the market is going to zero I will go back in headfirst. 
Posted on 12/21/22 at 8:35 am to thegreatboudini
The oh-shite moments are happening in real time.
The bond markets are fricked
Real Estate is fricked (not values but liquidity)
currencies around the world are fricked
The only thing holding up the stock market and to a greater extent the real estate market are employment rates.
This drop takes much longer. Look at how long it took to go from the start of the 2007/2008 financial crisis to peak unemployment. Almost 2 years!
If more layoffs happen, you will see even more people moving from stocks to cash and putting their homes on the market to get cash.
Right now it is all about the unemployement rate. If we can keep that shoe from dropping, we will have a soft landing. If we don't, buckle the frick up.
The bond markets are fricked
Real Estate is fricked (not values but liquidity)
currencies around the world are fricked
The only thing holding up the stock market and to a greater extent the real estate market are employment rates.
This drop takes much longer. Look at how long it took to go from the start of the 2007/2008 financial crisis to peak unemployment. Almost 2 years!
If more layoffs happen, you will see even more people moving from stocks to cash and putting their homes on the market to get cash.
Right now it is all about the unemployement rate. If we can keep that shoe from dropping, we will have a soft landing. If we don't, buckle the frick up.
Posted on 12/21/22 at 8:35 am to SmackoverHawg
quote:
My guess is it will mimic 2008-9. When people start to think the worst is over, it'll just be starting.
DING DING DING
Posted on 12/21/22 at 8:39 am to I Love Bama
The bond and precious metals markets have been fake for a generation, possibly two. I thought things were done in 08. Now I just shrug my shoulders.
Posted on 12/21/22 at 9:03 am to thegreatboudini
I don't. I've been through several market corrections past 20+ years. Keep buying if you're in accumulation phase and this too shall pass. I'm no longer accumulating and still not stressed because I've seen this before and learned not to panic or time market.
Posted on 12/21/22 at 9:05 am to thegreatboudini
Only thing that gives me pause is that this is the most predicted recession in history. When everyone thinks its going to happen, it usually doesn't.
Posted on 12/21/22 at 9:10 am to thegreatboudini
Slow death spiral would be preferred right?
Posted on 12/21/22 at 9:17 am to Triple Bogey
quote:
Only thing that gives me pause is that this is the most predicted recession in history. When everyone thinks its going to happen, it usually doesn't.
I'd say they're all predictable
Posted on 12/21/22 at 9:29 am to thegreatboudini
A lot of my confidential sources are saying 2044. Plan accordingly.
Posted on 12/21/22 at 10:08 am to thegreatboudini
Not alot is happening until late Jan when earnings come around again. I'm playing for a little turd of a bounce over next week and a half, and I'm unloading, might be too late already. Looks like it's trying to happen but people are looking thru to the issues of 2023, and every analyst and their mom is basically maximum bear, so we'll see.
Earnings start at end of Jan and they will be horrendous, but I think as soon as we get to 2023, someone is going to prewarn on earnings and take the market down before we get there. Prewarning seems to be the move these days.
Once people realize we are fricked no matter what the fed does because we are going to have an earnings recession regardless, I think we test the low, CPI and PCE will look better and better every release now because of the nature of yoy comp. Still extrapolating to a 3%+ number though so it's not like we are saved, oil going back up maybe turns that 3% into 4%. FED will have to revise their target quietly unless somehow we get participation rate up or productivity explodes; not happening with this whitehouse. Inflation is only a early battle of the war though, and I think we will realize that soon enough. The yield curve is telling you that.
There will be a point next year when he time comes to hold your nose and start DCA into market, but its not close imo. There will be a overlap between fed starting to be like, shite economy is in the tank, and when earnings actually turn around and bottom. You cant wait for earnings to actually bottom.
As an aside, seeing people finally capitulating on this board saying stuff like, man got into stocks 2 years ago, and I'm down big, and starting to second guess investing in stocks; is a very good thing to see. Maybe the look thru comes quicker than I'm anticipating. Haven't seen alot of that on any of the previous lows, buy the dip has still been strong mentality; maybe that's finally breaking.
Earnings start at end of Jan and they will be horrendous, but I think as soon as we get to 2023, someone is going to prewarn on earnings and take the market down before we get there. Prewarning seems to be the move these days.
Once people realize we are fricked no matter what the fed does because we are going to have an earnings recession regardless, I think we test the low, CPI and PCE will look better and better every release now because of the nature of yoy comp. Still extrapolating to a 3%+ number though so it's not like we are saved, oil going back up maybe turns that 3% into 4%. FED will have to revise their target quietly unless somehow we get participation rate up or productivity explodes; not happening with this whitehouse. Inflation is only a early battle of the war though, and I think we will realize that soon enough. The yield curve is telling you that.
There will be a point next year when he time comes to hold your nose and start DCA into market, but its not close imo. There will be a overlap between fed starting to be like, shite economy is in the tank, and when earnings actually turn around and bottom. You cant wait for earnings to actually bottom.
As an aside, seeing people finally capitulating on this board saying stuff like, man got into stocks 2 years ago, and I'm down big, and starting to second guess investing in stocks; is a very good thing to see. Maybe the look thru comes quicker than I'm anticipating. Haven't seen alot of that on any of the previous lows, buy the dip has still been strong mentality; maybe that's finally breaking.
This post was edited on 12/21/22 at 10:10 am
Posted on 12/21/22 at 10:24 am to thegreatboudini
In order for the wheels to come off... one of two things need to happen.
1) Credit to freeze up
2) Unemployment to spike.
"Price" doesn't mean anything today. Look at the car makrket. They don't even discuss price in the dealership anymore... it's all about the monthly. If the monthly is too high, play games on the trade in or play games with the term of the loan.
The number of people I know who are getting 84 month car loans, who are driving up their CC balances, etc, is skyrocketing.
As long as the credit is available, and as long as they have income to service the debt... nothing will happen. Now maybe they are sacrificing retirement savings but that won't impact for a long time.
1) Credit to freeze up
2) Unemployment to spike.
"Price" doesn't mean anything today. Look at the car makrket. They don't even discuss price in the dealership anymore... it's all about the monthly. If the monthly is too high, play games on the trade in or play games with the term of the loan.
The number of people I know who are getting 84 month car loans, who are driving up their CC balances, etc, is skyrocketing.
As long as the credit is available, and as long as they have income to service the debt... nothing will happen. Now maybe they are sacrificing retirement savings but that won't impact for a long time.
Posted on 12/21/22 at 10:50 am to LSUFanHouston
quote:
"Price" doesn't mean anything today. Look at the car makrket. They don't even discuss price in the dealership anymore... it's all about the monthly. If the monthly is too high, play games on the trade in or play games with the term of the loan.
Car dealers have been doing that for decades
Posted on 12/21/22 at 10:58 am to thegreatboudini
The wheels are off bruh
Only Putin or ye can put them back on
Only Putin or ye can put them back on
Posted on 12/21/22 at 11:02 am to I Love Bama
quote:
If more layoffs happen, you will see even more people moving from stocks to cash and putting their homes on the market to get cash.
Working people don’t put money in the market
The only people that have money of any significance in the market is boomers. Luckily the democrat slush fund known as vanguard has them brainwashed never to take money out but as things get more painful they’ll pull and never put it back in
The stock market is never going to recover and america will take its rightful place in the worlds economy rankings between France and Chechnya
Posted on 12/21/22 at 12:24 pm to Pendulum
I don't know what kind of seasonality there will be for rolling debt in Spring '23 but fixed income issues were down quite a bit this year. With falling top and bottom lines and squeezed margins ex energy that is going to be a bitch with rates up 400ish%. If enough ratings downgrades happen it could cause a systematic selling of bonds that freezes credit markets like 2018 and 2020.
Nontheless the corporations that most people invest in have not had any meaningful impact on their P&Ls from rate hikes at the short end. Some of them won't but could become casualties because of how the market is positioned.
SIFMA
Nontheless the corporations that most people invest in have not had any meaningful impact on their P&Ls from rate hikes at the short end. Some of them won't but could become casualties because of how the market is positioned.
SIFMA
Posted on 12/21/22 at 6:15 pm to thegreatboudini
It depends on what you mean by the wheels coming off. Do you mean another Great Depression? That's still a good ways off (depending on how spendy Congress is).
Do you mean just another big slump? I thought it would already be here over the Fall/Winter but I didn't expect so many consumers to go so ridiculously hard on their credit cards just to maintain their current lifestyles.
The next 6-8 months are going to be interesting. What *should* happen is that the jump in interest rates should finally ripple enough out through the market after the Christmas glow is over that we finally start seeing that long-expected rise in Unemployment. If we see it, expect also to start seeing more vehicle repos and homes going on the block for defaulting on home loans (especially those cars and homes bought over the last 2-3 years, when prices were spiking so they are now upside down as those prices come down).
The question then is how bad does Unemployment get before and how long does it last before things start turning around?
Do you mean just another big slump? I thought it would already be here over the Fall/Winter but I didn't expect so many consumers to go so ridiculously hard on their credit cards just to maintain their current lifestyles.
The next 6-8 months are going to be interesting. What *should* happen is that the jump in interest rates should finally ripple enough out through the market after the Christmas glow is over that we finally start seeing that long-expected rise in Unemployment. If we see it, expect also to start seeing more vehicle repos and homes going on the block for defaulting on home loans (especially those cars and homes bought over the last 2-3 years, when prices were spiking so they are now upside down as those prices come down).
The question then is how bad does Unemployment get before and how long does it last before things start turning around?
Posted on 12/21/22 at 6:17 pm to wutangfinancial
Backwards looking Financials will still probably be fine in next round of earnings, it's going to be the forward multiples/guidance/sales that spooks markets. The front end of business is already dying in my experience and conversations and opinion since about mid November, it will take a quarter to show up.
This post was edited on 12/21/22 at 6:22 pm
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