The Stock Market Is Not The Economy Thread II

[AoE]

The economy is slowing by higher interest rates and this will lead to slower growth for companies. Markets tend to price risks in well advance.

Regarding jobs...that's not necessarily too positive from markets perspective in 2022 (it'd be in great recession). Red hot job market is driving the wages up along with the inflation and the underlying reason is not a solid economic growth, its the decrease in workforce participation.

The fed is actually trying to cool off the market by raising the interest rates, making borrowing more difficult and encouraging more workforce participation.

The reason why stocks fell is that there is a general belief...or lets say, recognition of a risk that the Fed may not be able to pull it off. What happens if it fails?

Higher Interest Rates = Slower Economic Growth.
Low Workforce Participation = Wage hikes without a structural growth = Inflation, which will eat up the wage increases.

and you get Stagflation. This is perhaps the most negative scenario right now and the risk is out there. It'll most likely be felt in the stock market for a while.

Basically the same thing I watched yesterday in this video.

[Mayareira]

The risk of a recession is always out there but I think its a bit early to worry too much about it. The Fed is aware of it and careful with rate hikes to avoid pushing the economy into such a strong slowdown.

Basically for a while we will be seeing somewhat tiny/moderate but predictable, 50 point increases in interest rates and wait for the economy to cool off...also crossing fingers for a higher workforce participation.

We may also see falls in stock market but with strong balance sheets both in the household side and the corporate this is a risk fed is prepared to take and tolerate, and likely label as a stabilizing period.

[Salodin]

Y'all keep saying there's low workforce participation...you got stats for that?

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[Mayareira]

Y'all keep saying there's low workforce participation...you got stats for that?

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https://fred.stlouisfed.org/series/CIVPART

[Salodin]

1point below the prepandemic level booo

Although we never recovered to the prerecession level anyways

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[Buffy]

Given the wave of retirements during the pandemic I doubt we ever see that level of workforce participation ever again

[archibaldcrane]

The risk is out there? Dude we are experiencing stagflation right here and now. Real GDP is down. Inelastic goods and services are up, leaving real take home also down. Idk why this thread and the media are always so fixed on employment data as it’s not a good leading indicator of anything. We’re in for tough, tough times very, very soon.

You're talking about the little Q1 Omicron dip after absolutely surging the previous 6 quarters?

[archibaldcrane]

There are ~56M adults in the world with a net worth of $1M or more. 22M of them live in America.

https://twitter.com/RyanRadia/status...75OgeGiyw&s=19

[Mayareira]

The risk is out there? Dude we are experiencing stagflation right here and now. Real GDP is down. Inelastic goods and services are up, leaving real take home also down. Idk why this thread and the media are always so fixed on employment data as it’s not a good leading indicator of anything. We’re in for tough, tough times very, very soon.

Sorry MytheSeraph I’ve missed your post, like the chart archie posted the tiny dip shouldn’t be considered a recession, but merely a contraction caused by uncertainty around the world and decline in exports.

If the economy was in stagflation everyone would feel it to their bones. While I agree that the employment numbers are not the only indicator to focus on, in a true stagflation you’d most definitely see the effects reflected on the job market. I don’t think there is any chance that an economy can remain in full employment and stagflation together at the same time.

Inflation is a difficult battle. Let’s see if these rate increases will be strong enough to tackle it without causing a recession.

[archibaldcrane]

Man, and I thought America's housing affordability crisis was bad

https://twitter.com/MPelletierCIO/st...Tv-rXMrpA&s=19

[Andalusian girls]

speaking of

Archibald i might be finishing up my schooling career at UCLA next year is Westwood as terrible as they say should i even attempt non-campus affiliated housing

[thetruepandagod]

speaking of

Archibald i might be finishing up my schooling career at UCLA next year is Westwood as terrible as they say should i even attempt non-campus affiliated housing

dont go to ucla.

[archibaldcrane]

speaking of

Archibald i might be finishing up my schooling career at UCLA next year is Westwood as terrible as they say should i even attempt non-campus affiliated housing

I did like 6 weeks on the UCLA campus in the summer of 04 as a "finish your masters/get acquainted with LA" thing, living in a dorm. After that I rented a room in a house for a year+ at Olympic and Westwood just south of Westwood proper.

It all seemed...fine? Good even? I have no idea what they say other than I'm sure off campus rentals are quite expensive, no idea what you are considering.

[Day]

my brother in christ that was 18 years ago

[archibaldcrane]

my brother in christ that was 18 years ago

Yeah I'm not the best person to ask about living in Westwood in the year of our lord 2022

[synistar]

there's like 3 options.

1) rent your own apartment in the westside; cry over rent
2) rent a bed at some coop/community living; cry over privacy
3) rent a place in the SFV. Cry over gas prices, parking, and how shitty the cheap parts of the valley are.

[NynJa]

Sounds like UCLA is trash.

[Andalusian girls]

there's like 3 options.

1) rent your own apartment in the westside; cry over rent
2) rent a bed at some coop/community living; cry over privacy
3) rent a place in the SFV. Cry over gas prices, parking, and how shitty the cheap parts of the valley are.

option 4: go to Columbia and encounter the exact same problems in Manhattan

but ya UCLA living situations seem to be fuckin orrible these days. should've gone in 04.

[archibaldcrane]

https://twitter.com/johngramlich/sta...96928340410370

the MAJORITY of Americans think unemployment, which is at a rock-bottom 3.6%, is a moderately or very big problem in America today.

I don't even know what you do about a populace that is that disconnected from reality.

[Salodin]

https://twitter.com/johngramlich/sta...96928340410370

the MAJORITY of Americans think unemployment, which is at a rock-bottom 3.6%, is a moderately or very big problem in America today.

I don't even know what you do about a populace that is that disconnected from reality.

Thats cause the first thing they'll retort with is "yeah but that's cause they've been out of work so long they aren't counted anymore."

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