Macro thread - Why is the market up/down?

[Sweet]

7 minutes ago, Gregmal said:

Which hilariously enough was the previous administration and Jerome Powells mission to stop such events from continuing lmfao. The smarty pants considered this a “problem”. Back to normal it seems.

Didn’t you say repeatedly that inflation had little to do with Fed policy because it was a result of Covid?  How can Powell get no credit yet get the blame lol.

[Gregmal]

1 minute ago, Sweet said:

Didn’t you say repeatedly that inflation had little to do with Fed policy because it was a result of Covid?  How can Powell get no credit yet get the blame lol.

Because wage growth isn’t inflation lol Meanwhile Powell specifically targeted the lower income workers wages and job availability as one of the things he wanted to kill. About as rigged as it get.

[rogermunibond]

[rogermunibond]

Real wages have grown but a lot more for women than men.

[Sweet]

Just now, Gregmal said:

Because wage growth isn’t inflation lol Meanwhile Powell specifically targeted the lower income workers wages and job availability as one of the things he wanted to kill. About as rigged as it get.

Yes, it was inflation that Powell was trying to stop, so why did you say wage growth lol?

[Gregmal]

1 minute ago, Sweet said:

Yes, it was inflation that Powell was trying to stop, so why did you say wage growth lol?

Because Powell said he equated wage growth and job availability as the cause of inflation…

Edited yesterday at 06:44 PM by Gregmal

[Gregmal]

It’s was all clearly supply chain and what wasn’t was housing. Yet how often did this establishment clown talk about seeing “wage growth slow” and “slack in the labor market”. As the haves cheered him on. Disgusting 

[Sweet]

19 minutes ago, Gregmal said:

Because Powell said he equated wage growth and job availability as the cause of inflation…

 

I don’t remember that but if he did that was dumb.  I know there was some concern that inflation would lead to wage growth and the so-called viscous circle.
 

18 minutes ago, Gregmal said:

It’s was all clearly supply chain and what wasn’t was housing. Yet how often did this establishment clown talk about seeing “wage growth slow” and “slack in the labor market”. As the haves cheered him on. Disgusting 

 

Agree most likely cause, although don’t blame Powell from pulling the only lever he had.

[Spooky]

1 hour ago, Gregmal said:

Only if you consider the acceleration of wealth inequality and inflation outstripping wage growth as working. 

 

Agree that these are huge issues - the top .1% of have accumulated so much wealth while most people are getting left behind. Isn't the solution to tax these people more rather than destroy the system? Also, on real wage growth, implementing protectionist policies isn't going to help that - we should be trying to drive the cost of goods and living down as much as possible. Personally, we should let China sell us solar panels, EVs and whatever else at ridiculously cheap prices.

[nsx5200]

IMHO, we should emulate how China bootstrapped/stolen US manufacturing and try to implement it here.  I suspect it wouldn't help as many people as the solution would require a lot of automation that Musk envisioned for his car factory, but at least it would keep a lot of leading edge manufacturing technology in-house/country (at the minimum, the Democratic alliances, similar to what ASML has done).  Straight up tariff probably won't cut it, but tariff with redirection of that fund to invest in technology, along with a hard schedule to wean off the tariff/subsidies might do the trick.  It should provide enough incentives to boot strap those manufacturing sectors again.

 

Well, like it or not, we're just passengers on this wild ride.  Might as well profit off it.

 

Addition: Buffet weight in on this about 20 some years ago.  It's calls for part tariff, but it is not a straight up tariff:

https://money.cnn.com/magazines/fortune/fortune_archive/2003/11/10/352872/index.htm

And again about 10 years ago:

https://fortune.com/2016/04/29/warren-buffett-foreign-trade/

Edited yesterday at 07:51 PM by nsx5200

[Gregmal]

19 minutes ago, Spooky said:

 

Agree that these are huge issues - the top .1% of have accumulated so much wealth while most people are getting left behind. Isn't the solution to tax these people more rather than destroy the system? Also, on real wage growth, implementing protectionist policies isn't going to help that - we should be trying to drive the cost of goods and living down as much as possible. Personally, we should let China sell us solar panels, EVs and whatever else at ridiculously cheap prices.

Yea I think made in China has been wonderful for lower and middle class America. No better quality of life improvement than Nikes, big screen TVs, and iPhones, all courtesy of the folks in big bad China. 

[rogermunibond]

If you're low/middle class workers in the US in non-tradeable sectors, you've done fine.  HVAC, plumbing, trades, auto mechanics etc.  They can't be competed against by Chinese service sectors.  Govt, healthcare, education - those sectors have done even better.  Finance, insurance, financial technology have all done great.

 

The tradeable sectors have hurt but where the US is competitive globally (highly engineered, high value add) those products are fantastic.  But even here the lead in competitiveness is eroding.

 

The issue is that the HS-educated or less white/black/Latino male or female worker has no chance.  But they have to upgrade their skills or they have to move to a place where they can get work.

 

Putting in tariffs to have a lot of unskilled low value added manufacturing work in the US makes no sense.

Edited yesterday at 08:00 PM by rogermunibond

[Spekulatius]

6 hours ago, Gregmal said:

Or, best case scenario when things are ripped up and reversed the same as what just happened here after the past 4 years. This is why the system is broken and unfixable.

Biden did not rip up any trade agreements from the first Trump administration. USMCA stayed intact, the China tariffs remained and were even added to later. Tell us any trade agreement implemented under Trump that Biden ripped up.

Edited 22 hours ago by Spekulatius

[Gregmal]

16 minutes ago, Spekulatius said:

Biden did not rip up any trade agreements from the first Trump administration. USMCA stayed intact, the China tariffs remained and were even added to later. Tell us any trade agreement implemented under Trump that Biden ripped up.

lol everything from border security measures to climate accords and even regulations related to how much water comes out of the faucet of your shower…but yea, none.

 

https://www.usnews.com/news/the-report/articles/2021-01-29/biden-spends-first-week-issuing-orders-reversing-trumps-orders

[Gregmal]

4 minutes ago, Sweet said:

And when it comes to politics, and specifically China, wee have enriched a country which aren’t our friend.  Not exactly wise.

Well, for one, it’s largely western elites and the powers that be whom insist on having an adversarial relationship with them? How bout toning that down? Oh no, then we re cozying up to dictators! Until our friends north of the border go “oh wait, dictators are ok if we have to get around tariffs!”, at which point the circle of chaos implodes.

[cubsfan]

15 minutes ago, Sweet said:

 

Regarding the Canadians, you seem to be forgetting who started the fight, so it no wonder you don’t understand why they are pissed off.  Imagine a friend you have been loyal to stabbing your in the back.

 

True friends pay their bills equally.  Canada's NATO contribution is 1.3%, the lowest of all.

That's disgraceful.

[rogermunibond]

[Gregmal]

14 minutes ago, rogermunibond said:

 

Have to LOL at the fact that there was more "uncertainty" around Trump term 1 or 2 than COVID, 9/11 or the GFC....people are such sheep. 

Edited 8 hours ago by Gregmal

[rogermunibond]

CPI came in tame.  Looks good for a Fed cut in May.

 

CR in the House maintains Biden admin spending levels of $2T deficit.  Bad.  Only Rep Thomas Massie is opposing it.

 

Better to dump the tariff mess, cut the Federal budget, and extend TCJA.

 

If the above happens markets rally.

[Sweet]

this is a long term trend that is unsustainable.  I don’t get some of the tariffs, but longer term the shrinking of government should put the US in stronger footing.

[treasurehunt]

1 hour ago, Sweet said:

this is a long term trend that is unsustainable.  I don’t get some of the tariffs, but longer term the shrinking of government should put the US in stronger footing.

 

The government being responsible for 85% of job growth in 2024 does not pass the smell test. Just to verify, I posed the question to both Grok 3.0 and Gemini Deep Research. Grok came back with 25-30%; Gemini said 23%. Any idea what the original source is for the 85% (what this RIC report is based on, that is)?

 

Budget deficits (and I guess government spending, by extension) have been abnormally high lately for a non-recessionary environment and are not sustainable over a long period, but I don't see any alarming trends in government employment. I asked Grok to analyze the last 20 years of government employment (fed + state/local) and its answer was that the share has actually gone down from about 17% in 2004 to 15% in 2024. Gemini Deep Research came back with slightly different numbers but a similar trend. I am sure there is a lot of waste in government and some housecleaning sounds fine, but the employment trends don't support taking a hatchet to so many jobs seemingly with very little deliberation.

 

[flesh]

44 minutes ago, treasurehunt said:

 

The government being responsible for 85% of job growth in 2024 does not pass the smell test. Just to verify, I posed the question to both Grok 3.0 and Gemini Deep Research. Grok came back with 25-30%; Gemini said 23%. Any idea what the original source is for the 85% (what this RIC report is based on, that is)?

 

Budget deficits (and I guess government spending, by extension) have been abnormally high lately for a non-recessionary environment and are not sustainable over a long period, but I don't see any alarming trends in government employment. I asked Grok to analyze the last 20 years of government employment (fed + state/local) and its answer was that the share has actually gone down from about 17% in 2004 to 15% in 2024. Gemini Deep Research came back with slightly different numbers but a similar trend. I am sure there is a lot of waste in government and some housecleaning sounds fine, but the employment trends don't support taking a hatchet to so many jobs seemingly with very little deliberation.

 

More hatchet please. On another note… I can’t find it but maybe deep research can.. I read a few months ago an article that included growth in jobs that result from govt spending.. contractors and the like, the growth was massive last four years.. 

 

also, I keep hearing sensible financial types saying yes we need to cut spending.. often they agree it needs to be cut a lot, then they say but not this way or that way… without offering their own presumably better ideas. 
 

What is it you’re going to cut (not just you the poster) that’s not going to piss off everybody? If your answer is defense, fine.. cut it 10-20% hypothetically, the deficit is still 1.8-1.9t what else? 
 

Dalio says get the deficit to 3% of gdp or about 1t a year, rates will come down as a result saving 100’s of bs of interest. That’s his magic number. If we don’t get close he says usa is stage 5 of 6 iirc of a failing leading nation state and reserve currency. 
 

Some say grow the economy. Great except that the only reason the economy appeared robust in the first place was massive deficit.. you can’t project the fake growth of the last years into the future. You can’t expect similar growth while also cutting massively and you can’t run these deficits much longer, compounded by the ss/Medicares massive costs growing in the next 10 years. You certainly can’t expect the left to do it at all except  by raising taxes massively which will reduce growth and it’s four years until they could. 4 years is too long. 
 

This must happen now. 

Edited 4 hours ago by flesh

[treasurehunt]

13 minutes ago, flesh said:

More hatchet please. On another note… I can’t find it but maybe deep research can.. I read a few months ago an article that included growth in jobs that result from govt spending.. contractors and the like, the growth was massive last four years.. 

 

That's a good point that some jobs are indirectly the result of government spending. I'll try and ask Deep Research about this tomorrow. Not sure how to phrase the question exactly; I'll think about what to ask, but if you have anything in mind, do share.

[Sweet]

1 hour ago, treasurehunt said:

 

The government being responsible for 85% of job growth in 2024 does not pass the smell test. Just to verify, I posed the question to both Grok 3.0 and Gemini Deep Research. Grok came back with 25-30%; Gemini said 23%. Any idea what the original source is for the 85% (what this RIC report is based on, that is)?

 

Budget deficits (and I guess government spending, by extension) have been abnormally high lately for a non-recessionary environment and are not sustainable over a long period, but I don't see any alarming trends in government employment. I asked Grok to analyze the last 20 years of government employment (fed + state/local) and its answer was that the share has actually gone down from about 17% in 2004 to 15% in 2024. Gemini Deep Research came back with slightly different numbers but a similar trend. I am sure there is a lot of waste in government and some housecleaning sounds fine, but the employment trends don't support taking a hatchet to so many jobs seemingly with very little deliberation.

 

 

I don’t have the link to the full report, so I don’t know how the data was cooked.  The difference might hang on ‘job growth’.  Thanks for following up, it never even occurred to me the figures might be wrong or misleading.

[LC]

I have kind of abstained from using AI for deep research. I'd rather spend the time myself (and learn something) versus relying on AI. Especially with accuracy rates in the 60s...and goes lower for more difficult/indirect the questions are.