U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-06-2018, 11:25 AM
 
Location: Backwoods of Maine
6,940 posts, read 7,664,211 times
Reputation: 17842

Advertisements

It started out as just a normal market correction, as we see frequently.

Unfortunately, a lot of investors had gotten complacent. They borrowed on the margin to double down on profits they thought would continue forever. But when the market corrects, they get a margin call and can usually only cover by selling some of their stocks. So that creates more selling.
Reply With Quote Quick reply to this message

 
Old 02-06-2018, 11:57 AM
 
3,459 posts, read 1,697,033 times
Reputation: 2201
The economy is continuing to grow at the same, slow & steady rate. We are right around full employment, so you should expect a certain amount of wage-driven inflation (which will bite the profits we've been seeing the last few years).

Globally, Brexit & uncertainty about NAFTA & TPP drive uncertainty about the short- to mid-term future of trade and the economy.

Equities were rising well above the growth of the economy. The economy is adding jobs while we are at full employment, so there is upward pressure on labor costs. That is a recipe for a correction, I think.
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 12:32 PM
 
Location: Aurora Denveralis
3,027 posts, read 1,028,996 times
Reputation: 3849
Quote:
Originally Posted by TheCityTheBridge View Post
The economy is adding jobs while we are at full employment, so there is upward pressure on labor costs.
We've been adding jobs since early 2010; since the middle of 2011 if you want to consider the brief dip earlier that year a restart. I think I just saw that we've added jobs for 88 straight months. It hasn't created any "upward pressure" on employers yet. I see absolutely no reason why a sudden leap in profits due to the tax cuts will devolve to the workforce in any meaningful amount. Why on earth should it?

I see happy C-level and stockholders and owners; I see substantial investment of those funds; I see some capital investment by many firms; I don't see anything pressuring them to increase wages. It's like an unmanaged conspiracy - as long as no one else is raising compensation, no one will.
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 01:04 PM
 
3,459 posts, read 1,697,033 times
Reputation: 2201
Quote:
Originally Posted by Quietude View Post
We've been adding jobs since early 2010; since the middle of 2011 if you want to consider the brief dip earlier that year a restart. I think I just saw that we've added jobs for 88 straight months. It hasn't created any "upward pressure" on employers yet. I see absolutely no reason why a sudden leap in profits due to the tax cuts will devolve to the workforce in any meaningful amount. Why on earth should it?

I see happy C-level and stockholders and owners; I see substantial investment of those funds; I see some capital investment by many firms; I don't see anything pressuring them to increase wages. It's like an unmanaged conspiracy - as long as no one else is raising compensation, no one will.
Continued job additions while we are at full employment puts upward pressure on wages. It's a simple supply and demand result. The data bears it out--we've had wage inflation of 3% plus since 2015. https://www.frbatlanta.org/chcs/wage...r.aspx?panel=1
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 02:15 PM
 
Location: Aurora Denveralis
3,027 posts, read 1,028,996 times
Reputation: 3849
Quote:
Originally Posted by TheCityTheBridge View Post
Continued job additions while we are at full employment puts upward pressure on wages. It's a simple supply and demand result. The data bears it out--we've had wage inflation of 3% plus since 2015.
Wow. A whole percent a year, after what, fifteen years of nearly flat wages? While all other economic indicators have risen sharply?

Ya sure got me with that one, podnuh.
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 02:28 PM
 
3,459 posts, read 1,697,033 times
Reputation: 2201
Quote:
Originally Posted by Quietude View Post
Wow. A whole percent a year, after what, fifteen years of nearly flat wages? While all other economic indicators have risen sharply?

Ya sure got me with that one, podnuh.
That's consistent annualized inflation of 3% since '15, check the chart I linked.
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 03:45 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,734,508 times
Reputation: 4206
Quote:
Originally Posted by TheCityTheBridge View Post
Continued job additions while we are at full employment puts upward pressure on wages. It's a simple supply and demand result. The data bears it out--we've had wage inflation of 3% plus since 2015. https://www.frbatlanta.org/chcs/wage...r.aspx?panel=1
This is nominal, not real wages.

Real wages haven't done jack for the past couple years. Or the last 40. https://fred.stlouisfed.org/series/LES1252881600Q

Believe it or not, we used to have real wage growth of ~2%/yr and low inflation. For about 150 years prior to 1980.
Reply With Quote Quick reply to this message
 
Old 02-06-2018, 04:02 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,734,508 times
Reputation: 4206
Quote:
Originally Posted by redguard57 View Post
I'm wondering what you all think the market is reacting to?
A bubble popped. Maybe. It could just be a temporary loss of "air" followed by a further inflation and a bigger pop down the road...

https://www.advisorperspectives.com/...k-market-cheap
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top