Wednesday, July 13, 2022 5:21:48 PM
Enjoy following the board, I have incorporated many posts into my trading and thought I throw this out there for some comment.
Lots of talk of inflation rate peaking and starting to come down in the future, but issue I'm looking at is, that even if true, the cost of living would still be going up albeit at a lower rate from peak. I don't think the wage rate increases are going to be increasing at the same rate as it has, which hasn't kept up to inflation giving a negative wage income result. I can't see this divergence getting any better even in the next yr or longer, in fact I see it getting worse. This will only increase the stress and pressures for labor to be screaming and struggling in odds with the pressure for employers to cut costs which usually looks at labor as the highest expense to cut back on. And so it goes. How is that problem going to turn the market trend anytime soon and not just continue to make lower highs and lower lows? I know main street and wall street are so disconnected in ways, but they are still connected in ways that can't be ignored.
The housing market is just beginning to tip, irrational supply and demand to the max has been going on there, who knows how far it can go back down, but it's got to go down considerably. The cost of housing vs income are just in a unsustainable level and now interest rates making that worse. Auto repos are increasing dramatically now which is not a good omen. People with $2500 a month income paying $1000 car payments, realities biting, hence the dramatic increase in auto repos. More and more middle income and even some of the higher income are feeling it and making adjustments. One can only adjust so far and the poor category is growing and is going to grow a lot more.
We're not even talking about environmental costs that are going to be increasing dramatically (food, water, utilities, material, insurance, medical, and more caused by climate extremes) coming our way real soon, some of it here right now. Or the continued war, supply problems, and a myriad of other problematic issues that cannot be fixed in any shorter or medium term time spans, some may never be fixed, just learned to live with.
Sure I've read the consensus that the market is pricing in 175 basis points now in the next few Fed meetings, and the feelings that the market has had a good correction, but those things alone don't even cut it IMO, not with all these other issues with costs not even known or can't really project how detrimental all of these things will be, but I feel that some are falling into the same irrational exuberance of years past or just hope that we're looking at the bottom. Hope and desperation is never a good strategy and never turns out well.
In my opinion, I don't think that we can hold flat, let alone a little growth, and only see a bottom a lot lower from here. There might be a soft landing, but I don't feel we have even jumped out of the plane yet and only trying to fit the parachute, and the landing is miles below.
Thoughts?
Lots of talk of inflation rate peaking and starting to come down in the future, but issue I'm looking at is, that even if true, the cost of living would still be going up albeit at a lower rate from peak. I don't think the wage rate increases are going to be increasing at the same rate as it has, which hasn't kept up to inflation giving a negative wage income result. I can't see this divergence getting any better even in the next yr or longer, in fact I see it getting worse. This will only increase the stress and pressures for labor to be screaming and struggling in odds with the pressure for employers to cut costs which usually looks at labor as the highest expense to cut back on. And so it goes. How is that problem going to turn the market trend anytime soon and not just continue to make lower highs and lower lows? I know main street and wall street are so disconnected in ways, but they are still connected in ways that can't be ignored.
The housing market is just beginning to tip, irrational supply and demand to the max has been going on there, who knows how far it can go back down, but it's got to go down considerably. The cost of housing vs income are just in a unsustainable level and now interest rates making that worse. Auto repos are increasing dramatically now which is not a good omen. People with $2500 a month income paying $1000 car payments, realities biting, hence the dramatic increase in auto repos. More and more middle income and even some of the higher income are feeling it and making adjustments. One can only adjust so far and the poor category is growing and is going to grow a lot more.
We're not even talking about environmental costs that are going to be increasing dramatically (food, water, utilities, material, insurance, medical, and more caused by climate extremes) coming our way real soon, some of it here right now. Or the continued war, supply problems, and a myriad of other problematic issues that cannot be fixed in any shorter or medium term time spans, some may never be fixed, just learned to live with.
Sure I've read the consensus that the market is pricing in 175 basis points now in the next few Fed meetings, and the feelings that the market has had a good correction, but those things alone don't even cut it IMO, not with all these other issues with costs not even known or can't really project how detrimental all of these things will be, but I feel that some are falling into the same irrational exuberance of years past or just hope that we're looking at the bottom. Hope and desperation is never a good strategy and never turns out well.
In my opinion, I don't think that we can hold flat, let alone a little growth, and only see a bottom a lot lower from here. There might be a soft landing, but I don't feel we have even jumped out of the plane yet and only trying to fit the parachute, and the landing is miles below.
Thoughts?
Russian Polling
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