Economy Thread

[B-Man]

On 11/17/2022 at 4:22 PM, Foxx said:

Of course there hasn't been a dramatic decrease in spending...

 

On 11/18/2022 at 7:32 AM, Nouseforaname said:

People are addicted to spending. That doesn’t change when rates or prices go up.

 

 

 

COLOR ME UNSURPRISED: 

 

US Consumers Are Doing Exactly What They Did Just Prior To The Crash Of 2008. 

 

“We never seem to learn from our mistakes. Just before the financial markets crashed and the economy plunged into a horrifying recession in 2008, U.S. consumers went on a debt binge of epic proportions. Mortgage debt, auto loan debt and credit card debt all skyrocketed, and so when the economy finally crashed all of a sudden there were millions of Americans drowning in bills that they were unable to pay. Well, now it is happening again. According to the Federal Reserve Bank of New York, during the third quarter of 2022 household debt increased at the fastest pace that we have seen since the first quarter of 2008.”

 

 

 

[Nouseforaname]

1 hour ago, B-Man said:

 

 

 

COLOR ME UNSURPRISED: 

 

US Consumers Are Doing Exactly What They Did Just Prior To The Crash Of 2008. 

 

“We never seem to learn from our mistakes. Just before the financial markets crashed and the economy plunged into a horrifying recession in 2008, U.S. consumers went on a debt binge of epic proportions. Mortgage debt, auto loan debt and credit card debt all skyrocketed, and so when the economy finally crashed all of a sudden there were millions of Americans drowning in bills that they were unable to pay. Well, now it is happening again. According to the Federal Reserve Bank of New York, during the third quarter of 2022 household debt increased at the fastest pace that we have seen since the first quarter of 2008.”

 

 

 

It is normal that when prices go up, consumers sometimes compensate with credit.  I would say the differences between now and 2008 is that banks are required to have larger reserves and are better capitalized.

 

Companies all seem to have forecasted a slowdown in 2023 and they are all taking advantage of market conditions to justify restructuring.  What makes me believe that conditions are different is the labor market overall is still very strong. 

[Billsandhorns]

The labor market is strong with multiple companies announcing large layoffs?

[Nouseforaname]

1 hour ago, Billsandhorns said:

The labor market is strong with multiple companies announcing large layoffs?

 

It's still strong for what technically is a recession.

[B-Man]

Biden Overturns Trump rule and tells 401kbinvestors to prioritize green investments over profit - despite plans already losing $34,000 on average this year

by Neirin Gray Desai

 

Original Article

 

The Biden administration will allow employers to invest pension money in green industries that could provide lower returns for Americans. The move which was announced on Tuesday reverses a rule imposed by Trump in 2020 that forced employers to prioritize profit when making 401(k) investments.  The new rule introduced by US Department of Labor will allow retirement plan investors to focus on ESG investing - which considers the environmental and social impacts of investments. The change comes as the average 401(k) in the US is down around 25 percent

[Billsandhorns]

12 hours ago, Nouseforaname said:

 

It's still strong for what technically is a recession.

I also forgot the fact that the U.S. government undercounts unemployment rates. People that are not actively looking are not counted. 
They also changed the rules on how they count inflation 

[Crap Throwing Clavin]

35 minutes ago, B-Man said:

Biden Overturns Trump rule and tells 401kbinvestors to prioritize green investments over profit - despite plans already losing $34,000 on average this year

by Neirin Gray Desai

 

Original Article

 

The Biden administration will allow employers to invest pension money in green industries that could provide lower returns for Americans. The move which was announced on Tuesday reverses a rule imposed by Trump in 2020 that forced employers to prioritize profit when making 401(k) investments.  The new rule introduced by US Department of Labor will allow retirement plan investors to focus on ESG investing - which considers the environmental and social impacts of investments. The change comes as the average 401(k) in the US is down around 25 percent

 

Dumb article.  It confuses 401(k)s with pensions, and is unclear as to which the rule applies.  Whoever wrote that for the Daily Mail clearly doesn't understand how the American retirement system works.

 

I hope it applies to 401(k)s, because I'd like to wish the government good luck in dictating how I invest my retirement money.

 

 

[Crap Throwing Clavin]

14 hours ago, Billsandhorns said:

The labor market is strong with multiple companies announcing large layoffs?

 

Tech companies, for the most part.  Retail is surprisingly strong.

 

This recession is driven by FAANG and housing, mostly.

Edited November 23, 2022 by Crap Throwing Clavin

[Nouseforaname]

5 minutes ago, Crap Throwing Clavin said:

 

Tech companies, for the most part.  Retail is surprisingly strong.

 

This recession is driven by FAANG and housing, mostly.

And those tech companies overstaffed and were basically leaning out.  It needed to happen unfortunately.

[Nouseforaname]

22 minutes ago, Billsandhorns said:

I also forgot the fact that the U.S. government undercounts unemployment rates. People that are not actively looking are not counted. 
They also changed the rules on how they count inflation 

 

That's true but what is being reported is that the labor market is still strong.  I listen to a lot of investing opinions from traders who are no nonsense/no politics and their feeling is that the labor market is still relatively strong as opposed to what was projected.  

 

Obviously they have their own biases baked into their statements but it still gives you an idea of where we're heading.

[Foxx]

6 hours ago, Crap Throwing Clavin said:

I hope it applies to 401(k)s, because I'd like to wish the government good luck in dictating how I invest my retirement money.

It's coming... Outright confiscation. 

[Foxx]

6 hours ago, Crap Throwing Clavin said:

 

Tech companies, for the most part.  Retail is surprisingly strong.

 

This recession is driven by FAANG and housing, mostly.

And inflation.

[Crap Throwing Clavin]

38 minutes ago, Foxx said:

It's coming... Outright confiscation. 

 

And I stand corrected: the new ruie overturns the Trump-era rule that specified that no investment vehicle could be used in any federally protected retirement plan if that vehicle had a non-financial goal as one of it's main goals.

 

Reversing it, in effect, makes green investment a fiduciary duty superseding actual capital management.  The rule - promulgated by Department of Labor - violates the IRS Code (26 USC 401).    

 

And outright confiscation won't happen.  Let me tell you how it'll work: after a major bear market, when people 401k and IRA accounts have depreciated by some 30% or so, a Democratic Congress with a Democratic White House will campaign to "protect people's retirement investment from Wall Street" (or some such bullshit, not caring that such a statement makes no sense), and will alter the IRS code to allow the IRS to regulate how much of an individual retirement account is mandated to be invested in investment-grade government securities.  Basically, progressives will empower the executive to fund the federal deficit with retirement accounts.

 

That's how it's done.  See also: Germany, Nazi.

[Foxx]

18 minutes ago, Crap Throwing Clavin said:

 

And I stand corrected: the new ruie overturns the Trump-era rule that specified that no investment vehicle could be used in any federally protected retirement plan if that vehicle had a non-financial goal as one of it's main goals.

 

Reversing it, in effect, makes green investment a fiduciary duty superseding actual capital management.  The rule - promulgated by Department of Labor - violates the IRS Code (26 USC 401).    

 

And outright confiscation won't happen.  Let me tell you how it'll work: after a major bear market, when people 401k and IRA accounts have depreciated by some 30% or so, a Democratic Congress with a Democratic White House will campaign to "protect people's retirement investment from Wall Street" (or some such bullshit, not caring that such a statement makes no sense), and will alter the IRS code to allow the IRS to regulate how much of an individual retirement account is mandated to be invested in investment-grade government securities.  Basically, progressives will empower the executive to fund the federal deficit with retirement accounts.

 

That's how it's done.  See also: Germany, Nazi.

Social Security will be first...

[Crap Throwing Clavin]

52 minutes ago, Foxx said:

Social Security will be first...

 

Social Security is already invested in government bonds, effectively.

 

You think there's really a "lockbox" where your SS contributions are set aside?  No, they're spent.  They're required to be, by law. 

[Ann]

Oh yay, inflation is down from June. Sure it is.  And, we already are in a recession. 


 

• Americans are spending $433 more a MONTH for the same products due to crippling inflation as consumer prices rocket 8% to nearly highest level in 40 years
• American households are feeling the pinch with household spending clocked at $433 more a month to buy the same goods and services as it did a year ago
• Figures are slightly down from the $445 monthly figure recorded in September
• Consumer prices jumped by 7.7 percent in October, from a year ago, according to the U.S. Bureau of Labor Statistics
• That rate is down from 9.1 percent in June, which marked the most recent peak, and data has suggested inflation may cool further in the coming months
• Biden said the declining number shows there is progress on bringing inflation down and adding that his 'economic plan is working'
• But as the Fed continues its rate hikes, the risk of a recession increases 

 

</snip>

[Ann]

I laughed, but there is soooo much truth to this:
 

 

[Foxx]

1 hour ago, Ann said:

I laughed, but there is soooo much truth to this:
 

 

That is fantastic! The VC portion is hilarious!

 

I'm dying laughing here...

[Koko]

On 11/26/2022 at 9:31 AM, Ann said:

Oh yay, inflation is down from June. Sure it is.  And, we already are in a recession. 
 

• American households are feeling the pinch with household spending clocked at $433 more a month to buy the same goods and services as it did a year ago
• Figures are slightly down from the $445 monthly figure recorded in September

 

This just in: Biden administration has saved the average American $12 per month due to his glorious leadership!

[Uncle Joe]

3 hours ago, Koko said:

 

This just in: Biden administration has saved the average American $12 per month due to his glorious leadership!