I think there's starting to be a pivot from future interest rate expectations to earnings. Ultimately earnings or future earnings expectations are what drives a stock up or down, not the risk free rate so much. Powell got inflation dead wrong with his "transitory" nonsense and he doesn't want his legacy to be Arthur Burns. I think it's foolhardy to not believe what he's saying about leaving interest rates high for a while. Typically the fed funds rates needs to be a 1-2% above the inflation rate and we aren't anywhere near that.
Will there be a financial crash in 2023?
- Thread starter Cynllo
- Start date
They are trying to break through 4100 S&P here which is an odd bear market rally ... stay tuned. BTC also flying now, but I suspect the markets take a leg down the rest of the week.
This rally is predicated on the best case "goldilocks soft landing" according to WSJ. It makes no sense to buy with that scenario priced in. There's nowhere to go but down.
It will as QT dries up liquidity, but it'll be a slow motion "crash" as something will break, then "rescue attempts" will cause further, odder problems including more inflation later this year or next. Recall my post about the Fed balance sheet unwinding vs adding, year over year? Let's see if I can find it for you:
Funny how that works, eh? If the pace continues since late 2022, the result for 2023 will be -13% roughly, winding off just over $1 trillion. If they can get there, lol (hint hint: they won't).
Charlie has tons of charts on twitter. It's interesting to peruse all of them.
Last edited:
Looks like the balance sheet has to double in the next 6 years...2027. The hangover arriving around 2028-2030, which is as cycles go, where I would put the "climax" portion or end of this Fourth Turning. Also a Bitcoin halving in 2028. Assuming a linear relationship between Fed "assets" and debt/GDP ratio, that would be 220% debt/GDP?It will as QT dries up liquidity, but it'll be a slow motion "crash" as something will break, then "rescue attempts" will cause further, odder problems including more inflation later this year or next. Recall my post about the Fed balance sheet unwinding vs adding, year over year? Let's see if I can find it for you:
Funny how that works, eh? If the pace continues since late 2022, the result for 2023 will be -13% roughly, winding off just over $1 trillion. If they can get there, lol (hint hint: they won't).
Charlie has tons of charts on twitter. It's interesting to peruse all of them.
Many people say the central bankers are stupid. I was listening to Jim Rogers today. His take is the central bankers have never had a real job. While it seems they very much know what they are doing. Keeping things propped up. As without that, it is likely the whole system of power degrades quickly.
2028-2032 seems to be the window for real chaos. And no dobut by then they will have a lot of things ready to spin out to maintain power.
Looks like an optimistic take. Social security fund also empty by 2032 , at current rate. But that is down from 2034, two years ago.
We don't know what happens when for the first time in 15 years, the markets actually drop 50%, not just 20%. Or what happens when the bond markets are propped up. They could print even more, faster. I think they tighten, keep going, and just make us all live through relatively high inflation. They'll be quite happy in destroying the "wealth effect" for most over the next several years.
The odds are that you guys are right about real chaos and disorder late in the decade.
The odds are that you guys are right about real chaos and disorder late in the decade.
Crickets from the big shot here...
To be expected.
Frankly I do t expect a crash either...but I'm not bragging about my portfolio....
May have to raise the retire age. France did that recently and it's causing a fuss. And they had it set stupidly low at 62 uping it to 64.Many people say the central bankers are stupid. I was listening to Jim Rogers today. His take is the central bankers have never had a real job. While it seems they very much know what they are doing. Keeping things propped up. As without that, it is likely the whole system of power degrades quickly.
2028-2032 seems to be the window for real chaos. And no dobut by then they will have a lot of things ready to spin out to maintain power.
Looks like an optimistic take. Social security fund also empty by 2032 , at current rate. But that is down from 2034, two years ago.
