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.
Ever increasing inflation? Everything they've done so far has barely staved off deflation.
Printing does not = inflation.
No inflation? I do not know about you but I am paying $4.00 / gal for gasoline, a decent steak is about $6.00 lb. and my electric rates were just raised by 12%. Let’s add to that the increases in health insurance and both auto and homeowners insurance. Everything regular people need to survive has experienced mass inflation while governments use tricks like hedonics and substitution along with removing food and energy from the CPI index to lie to the people about the true inflation rate. Companies are using every trick from shaving quantities to pumping air into food products to keep from raising prices.
Uh-oh, more facts. The cost of food is 14.17% of the CPI-U. The cost of energy is another 11.08%. So more than a quarter of the index is derived from things you claimed they leave out. And the US average pump-price for a gallon of regular last week was $3.67. Gas prices are down from a year ago everywhere except in the midwest where all that Canadian tar sands stuff is refined and sold.
People keep saying that whenever there is rumor or innuendo that the Federal Reserve is going to start tapering down QE that the S&P 500 takes a dip, and then saying that is "proof" that this rally is only propped up by QE.
The people saying this do not understand how the stock market works. Stocks go up or down basedon whether investors think they're going to go up or down (and because of expected dividends).
These dips only show that many investors think the rally is only propped up by QE, or that many investors think that others think the rally is only propped up by QE. It makes no difference whether the market actually is only propped up by QE, it only matters what people believe is the case. I'm not of the belief that this is an artificial rally caused only by QE, but if I hear news that the Fed is announcing an end to QE I'm hitting the sell button as fast as possible because that's what I think other investors are going to do. Stock market investing is rife with self-fullfilling prophesies.
Just like the recent flash crash when the AP's twitter account got hacked and the Dow dropped 150 points in seconds because of a fake news story about the White House being attacked. It makes no difference whether or not the White House actually was attacked or not. It only matters what people think happened.
Last edited by EugeneOnegin; 05-24-2013 at 08:20 AM..
No inflation? I do not know about you but I am paying $4.00 / gal for gasoline, a decent steak is about $6.00 lb. and my electric rates were just raised by 12%. Let’s add to that the increases in health insurance and both auto and homeowners insurance. Everything regular people need to survive has experienced mass inflation while governments use tricks like hedonics and substitution along with removing food and energy from the CPI index to lie to the people about the true inflation rate. Companies are using every trick from shaving quantities to pumping air into food products to keep from raising prices.
I was in Alabama a couple weeks ago and gas was $3.19 per gallon. So what?
I dont think there are going to be any "crashes" or "bubbles". Or mass layoffs or anything of the like. I dont think anything that drastic is in the cards outside of a major world event.
Larger companies are very aware of world economic conditions. They just lived through 2008 and are prepared for a similar event. They have a lot of cash, are not bloated, and arent overextending themselves. Theres not much potential for a "crash"
while i do believe in the cycles mentioned by the OP, 7 years is far too short. the typical cycles are closer to 12-15 yrs. Regulations have tried to, often successfully, smooth out the "boom and bust", but after regulations are passed, over the years lobbyists peel away at the regulations and lawyers figure out ways around them. Savings & Loan, Enron, Lehman.
Though currently, companies are in much strong financial positions than any other extended period of time in recent history. Sitting on large amounts of cash, still reducing debt, high productivity from employees, and ongoing cost cutting measures being taken at numerous companies...many companies are substantially better positioned to survive economic downturns right now.
P/Es in the market are still relatively a bargain, so a crash? Hard to imagine.
But we all know what happens with anyone who predicts things in financial markets...
No inflation? I do not know about you but I am paying $4.00 / gal for gasoline, a decent steak is about $6.00 lb. and my electric rates were just raised by 12%. Let’s add to that the increases in health insurance and both auto and homeowners insurance. Everything regular people need to survive has experienced mass inflation while governments use tricks like hedonics and substitution along with removing food and energy from the CPI index to lie to the people about the true inflation rate. Companies are using every trick from shaving quantities to pumping air into food products to keep from raising prices.
that's funny. gas in my area has dropped in price in recent months, electric rates are still declining due to cheap natural gas. and health insurance costs have actually declined a bit since the recession. homeowners and auto insurance has been increasing - credit the numerous natural disasters for a substantial rise in claims.
many food prices have actually declined.
i don't know what's going on where you're living, but you might want to shop a bit smarter...
People keep saying that whenever there is rumor or innuendo that the Federal Reserve is going to start tapering down QE that the S&P 500 takes a dip, and then saying that is "proof" that this rally is only propped up by QE.
The people saying this do not understand how the stock market works. Stocks go up or down basedon whether investors think they're going to go up or down (and because of expected dividends).
These dips only show that many investors think the rally is only propped up by QE, or that many investors think that others think the rally is only propped up by QE. It makes no difference whether the market actually is only propped up by QE, it only matters what people believe is the case. I'm not of the belief that this is an artificial rally caused only by QE, but if I hear news that the Fed is announcing an end to QE I'm hitting the sell button as fast as possible because that's what I think other investors are going to do. Stock market investing is rife with self-fullfilling prophesies.
Just like the recent flash crash when the AP's twitter account got hacked and the Dow dropped 150 points in seconds because of a fake news story about the White House being attacked. It makes no difference whether or not the White House actually was attacked or not. It only matters what people think happened.
on the flip side...i'll start buying on the dip. precisely because i don't think it's propped up by QE. anyone can look at a company's balance sheet and P&L reports and decide if they think the company has value.
You're right about perceptions though...but those only impact short term prices, and i hold no stock market investments for my short term $.
As any one can see whats happened in the last day after Bernanke made his speech. Markets shot up at the beginning and then when he was asked the question about when he may be thinking about slowing his printing and he said that they will be discussing this at the June meeting, a second later the markets dumped, later about 2PM the mins of the April FOMC meeting were released and it said that the governors had talked about decreasing the printing then markets dumped again within seconds.
The markets are riding on a razors edge and will dump with just the thought from the Fed that they will back off their support of the economy. If the Fed stopped their support tomorrow, I think the markets would drop maybe 40% within days and the the economy would contract for maybe a few years. Then at some point inflation would take over and that's when the real pain starts.
In MHO bonds are past their attractiveness. I have no money in bonds or bond funds.
I don't consider the economy to be doing that well and will not invest based on normal market results.
The next crash will probably start with the Fed when they stop the printing. Obama care starting in Jan will cause some fluctuations in the markets most likely down. The downward trend will start in the fall and will not be a crash (maybe) but a slow trend down.
Note; all this is just MHO.
put your money where you HO is and buy into Universa. you'll make a killing if you're right.
Uh-oh, more facts. The cost of food is 14.17% of the CPI-U. The cost of energy is another 11.08%. So more than a quarter of the index is derived from things you claimed they leave out. And the US average pump-price for a gallon of regular last week was $3.67. Gas prices are down from a year ago everywhere except in the midwest where all that Canadian tar sands stuff is refined and sold.
The cost of gasoline has more than doubled since 2005. That is an average of 15% per year. What it has done in the past year is irrelevant as statistics can be manipulated in shorter terms.
In addition if a quarter of the CPI-U is made up of food and energy then to be statistically accurate, the average household expense would also have to spend roughly 25% of its income on food and energy.
While that statistic may be close for the minority of high income households it is not even close for majority low income households.
There are lies, damn lies, and the worst lies, which are government statistics.
The cost of gasoline has more than doubled since 2005. That is an average of 15% per year. What it has done in the past year is irrelevant as statistics can be manipulated in shorter terms.
Doubling in 8 years occurs at a compound rate of 10.4%, and gas averaged $3.04 per gallon over the Labor Day wekend in 2005. Nonsensical cherry-picking without a point is what's irrelevant.
Quote:
Originally Posted by jimhcom
In addition if a quarter of the CPI-U is made up of food and energy then to be statistically accurate, the average household expense would also have to spend roughly 25% of its income on food and energy.
While that statistic may be close for the minority of high income households it is not even close for majority low income households.
Yes, it is an average that is arrived at every two years by a cast of thousands trained in the field. Meanwhile, I take it that you have now retracted your ridiculous claim that food and energy are excluded from the CPI-U and will never repeat such nonsense again?
Quote:
Originally Posted by jimhcom
There are lies, damn lies, and the worst lies, which are government statistics.
Worse than any those is the absolute bunk made up or believed in by people who have no idea what they are talking about.
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.
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.
