patrick.net

Daddy's watching

And waiting for THE FINAL RE-FI

errc says

And waiting for THE FINAL RE-FI

Watch that 1.60% level and where it closes

A lot the recent down draft globally are Bretexit concerns, we actually had a intra day print in the 1.50% earlier this year but closed right at 1.64% again in 2016

Not sure that is cause and effect.

What would a burst of growth do to these yields?

Ironman says

Ironman

We aren't Europe or Japan... not yet... Still have some young legs here in America

Logan Mohtashami says

No way American will fall into a deflationary spiral with prime age labor force growing unless you have a inflationary spiral.

This if anything in economics I am very sure off.

Logan, you are not answering a question. Answer without charts or hyperbole.

Logan Mohtashami says

No way American will fall into a deflationary spiral with prime age labor force growing unless you have a inflationary spiral.

moronic. you clearly don't know what you are talking about.

One of things that a group of us are doing is that we are talking all the recorded 2nd great depression discussion and keeping a track of then

Especially everyone on this site... one day

Patrick.net article I will write

Headline

"False Economic Theory"

We are going to document why the people on this site weren't versed in economics and how bad the 2nd Great Depression or Deflationary Spiral people

It's not your fault, you have theory that has no background in data.

False economic theory... much like the Gold Bugs in the last 8 years.

So, it's just a matter of time that I will prove my case that the people on this site, (Very Liberal) have a really bad economic theory on America

You lack discipline and it makes you guys and gals very predictable just like the Gold Bugs were the last 8 years

So, this thread is saved with all the threads of the Great American Decline thesis I have heard some much about.

It will be my honor to prove your thesis wrong

Best part is

You will always keep talking about the Great American decline or Deflationary spiral

Because if not this then what else?

The War On Data is coming in an end...

Rise of Reality is coming!

Only because you people on the hard left and right are two extreme... :-)

Pun intended with 2 ;-)

Sharingmyintelligencewiththedumbasses says

moronic. you clearly don't know what you are talking about.

Hi old friend! :-)

See, I already know I have this, it's not anything big to me.

I am prepping for the next 20 years to show why... that's the trick, anyone can say America isn't going to fail, the Dark Devil Bears will be wrong..

A person who can speak and write can say that...

I want to show why

Causation
Correlation
Representation

Because only then, will it really be understood :-)

Logan Mohtashami says

we are much better suited that them..

The reason why you think besides data is that your income is tied closely to the rise of asset prices. If you are in the industry that competes globally and was not so closely tied to a specific asset class price, you would feel different.

Whatever you guys think of me personally or what you think of my economics....

You will have to admit, I am not making stuff up, I do have data to support my thesis

Logan Mohtashami says

What is the disposible income after healthcare+rent+education(student loans)?
I'm fairly certain it is not going up.
The problem with inflation is that it masks the gross disparity between different types of goods. The things people need are far more expensive and people don't have a choice. The rest is cheaper but beyond reach for most people.

This leaves many people factually poorer while you get to brandish a nice chart claiming eloquently the opposite.

Problem I see with the great depression or deflationary spiral is that someone we are supposed to lose almost double the jobs lost in the great recession

Mind that we are doing this with a oil crash the world slow down since 2011

The 52-week moving average of non-seasonally adjusted jobless claims hit a new post-crisis low this morning

That's a theory that 146-157 million simply can't spend and won't during a deflationary spiral...

That's a bit out there considering our labor force growth will be positive in 2020

Logan Mohtashami says

Time will tell, this will have to be seen only after the next recession happens... because the recession is coming...

Ah... so you are calling for a recession...
When?

Heraclitusstudent says

Ah... so you are calling for a recession...

When

Watch

LEI, Claims, JOLTS, inventory to sales, where the over investment thesis is at that has a high multiplier, Fed fights inflation which really hasn't happened.

At some point I will write a article with the Headline, Danger ... just not in 2016

1.64% print right now on 10's

We have not be able to close under 1.64% for years and haven't been able to break 1.60% since Europe 2012 scare..

Here is the big test today

Here once again! 1.64% close

No where to run, next week is going to be the real deal

That kind of didn't work out

The yields are falling, but I would attribute this to the notion that pretty much everybody around the world had come to terms with the fact that every single important world economy and their leaders have embarked on a ZIRP or even NIRP policy for the foreseeable future together with their central banks, by any means necessary. Once you accept that, it is likely that the market can extend for quite a while and until you see severe credit defaults and bankruptcies en masse, yields will not rise (why should they if central banks lend at practically 0%?). Also, credit card debt has been on the rise again, so the appetite is there, maybe not as large as back then, but it will continue to accumulate. It is incredibly easy for somebody with a decent income to get combined credit lines of 50K-100K, and a lot of that can be rolled over at 0% APR for quite a while. What's not that easy is to stay away from the temptation.

How much bad debt can the central banks disappear?

Blurtman says

How much bad debt can the central banks disappear?

a lot. They started doing it in 2011 by increasing duration of their balance sheets.

Strategist says

Love it. Stocks go up too.

Not necessary. It did not happen on Friday. Yields went down. Stocks wend down. If 10 years go to 1%, S&P will have a 20% correction.

tr6 says

a lot. They started doing it in 2011 by increasing duration of their balance sheets.

It is also reported that China's central bank is eating up bad private debt. While this may offend free market purists, what is wrong with this approach?

tr6 says

If 10 years go to 1%, S&P will have a 20% correction.

Then banks will get hit, S&P falling 20% with oil back up will be difficult

Logan Mohtashami says

S&P falling 20% with oil back up will be difficult

Who said that the oil will not go back down to 30s if 10 years are at 1%?

Logan Mohtashami says

S&P falling 20% with oil back up will be difficult

Oil at 49 is at 2004-2005 level. Chevron was trading in 50s, not 100 in those days.

tr6 says

Back to yields discussion. It's not all income inequality and too much in the hands of the few. By your logic, rich people would only put money in real estate and not in bonds. So who's buying bonds? The central banks are a big part of it. So how does the Fed not matter which is your other argument?

It does matter - he knows it, just not willing to make an admission, the Fed is just there for your pure entertainment and not to influence yields.. You don't have to be Keynesian or Austrian to see the impact the Fed has.

Blurtman says

While this may offend free market purists, what is wrong with this approach?

You have to do what you have to do. We did it here, and everyone is copying the approach. It does increase income inequality.

tr6 says

Oil at 49 is at 2004-2005 level. Chevron was trading in 50s, not 100 in those days.

That's not what I am talking about

Energy declines in the energy sector where the big drag on the S&P earnings, with oil back up to $50 the bleeding Q4 2016 and Q1 2017 comps will be easy to beat as long as oil stays up here.

We have to respect the trend that most of the bearish people in this cycle have had the worst 8 years we have ever seen in 100 years of market tops or economic crashes.

I have never seen so many people badly wrong in my life...

Once you pull the curtain away you can see why

First it was Europe, Then It was China, Then It was Russia & Brazil, Then It was Greece and now its Bretexit

Oh those silly kids in those other countries, America always had to hold the world up.

Logan Mohtashami says

Energy declines in the energy sector where the big drag on the S&P earnings, with oil back up to $50 the bleeding Q4 2016 and Q1 2017 comps will be easy to beat as long as oil stays up here.

That may be true. I would like to see what happens to gas prices. Chevron was still charging 2.25-2.50 for gas in California when oil was below 30 in Q1. I guess if they are allowed to rip us off for the next few years then their earnings should be better year over year.

tr6 says

That may be true. I would like to see what happens to gas prices.

In 2009 crude got to 33, in 2016 to 25. Gas prices go to 1.61 and 1.72. Gas should have been below 1.50

Logan Mohtashami says

America always had to hold the world up

America has the luxury to be fairly isolated from global events, and it also has natural resources if necessary as well as innovation to tap into. I agree with you it's not a bad place to be, otherwise I wouldn't be here. However with these extended extraordinarily low rates people's mindset has shifted long ago from 'how much does that house/car cost' to 'how much is my monthly payment', and I have no doubt that many have over-leveraged themselves - even with fixed low payments - and will start to get foreclosed upon when the layoffs are starting again. Many heavily depend on sustained, i.e. 30 years of dual income to sustain their payments, which is simply unpredictable. Hiring is still good in the bay area, albeit slowing down, and venture capital has been drying up significantly. I maintain we will come in roughly sideways YTD (as it is right now), with a more interesting 2017 to follow.