patrick.net

I am relieved that the ill-informed have ceased referring to every rising asset class as a bubble, and to anything they don't understand as a "Ponzi scheme."

Yes: things don't look frothy right now. Speculative mania and hyperleverage seems absent.

But there is still are a lot of derivative contracts and China looks kinda psychotic.

What if the Chinese economy goes "kerboom," and a lot of Chinese money goes rushing out of U.S. equities and real estate?

HydroCabron says

derivative contracts

On Facebook as you can imagine and some of you here follow me on there, I have unloaded the Lords of Charts on the Anti American Bears...

Derivative Contracts are the last hope of some titanic crash now...

HydroCabron says

What if the Chinese economy goes "kerboom,"

China is going to have some real time issues going forward due to their demographics

However, mind this

The world has been slowing down since 2011 Level, China and Europe has had many issues since 2011 and it really hasn't impacted us.

We have over 100 Million U.S. workers that work off domestic demand curve economics, what happens in China, Europe, Russia or Brazil has very little impact for us.

Obviously mining and oil gets impacted by a strong dollar, however, oil crashed and it didn't even create a move over 300K on Claims

Logan Mohtashami says

Too Many Bears on Patrick

As a liberal, I support Patrick's lifestyle choice. If he doesn't think there are too many bears, tops or bottoms, on him, then who are we to say otherwise?

Dan8267 says

then who are we to say otherwise?

You're correct I needed to add a .net

Ironman says

No Boom No Bust

A recession for sure will come, part of the natural economic cycle with any duration period

But it won't be for the reasons everyone says here

Recession will be normal, it won't be 18 months...

American economic muscle is coming soon ... soon we will get the much needed labor needed that has plagued this cycle

I am not so much talking about economic cycle runs, I am talking about America.

I never sugar coat growth, my GDP predictions have been 2%-2.5%, bong market calls with a 1.60% handle and all know my thoughts on housing.

However, bigger context, we are going to kick ass as a country!

We will pay for the decline in birth rates we had in this cycle,but next decade for a mature country with aging demographics. It's going to a Picasso

You looking for a Dead Bull bounce?

What your thesis is

Deflationary spiral ... in the next cycle, would imply a much lower rate of growth and even a deeper recession in 2017

I promise you, this won't happen.

We will have a recession but the next decade with a massive labor force coming on line... flex the most powerful economic force in the next decade and no country will come close to us.

i think 2017 could be the best year in this cycle

2017

Highest level of employment in U.S. Economic History and low level of inflation... rising but still core looking to be between 2% - 2.5%

Starting next year first step of the big young work force coming into the American economy.

Now the sweet spot is still in the next cycle years 2020-2024... But since we have the dollar, we don't have to worry about any currency induced inflation no matter what and how much we import.

Now the economic cycle is very long the tooth yes and inventory to supply is rising.

These are all true, economic cycles come and go, but we just wen through our rough patch. Household Leverage debt bubble and weak demographics, and still it could not bring this country down!

We are going to be fine!

10 years from now we will be still be fighting the Gold Bugs who will warn that the Dollar is going to collapse

How about the germans with their new influx of young syrian grenade launchers...

Logan Mohtashami says

We will have a recession but the next decade with a massive labor force coming on line... flex the most powerful economic force in the next decade and no country will come close to us.

Xanthidae says

How about the germans with their new influx of young syrian grenade launchers...

Germany needs roughly 500K new workers a year until 2050 just to stay on par with their terrible old age country.

Maybe 1,000,000 Syrians they can get.

Both Germany and Japan will have to do the best they can with their old people 46-48 median age there for both

Compared to previous generations entering the family/household formation stage:

1) average take home earnings are lower

2) college debt is higher

3) good paying jobs are harder to come by

4) housing is way more expensive.

Something has to give.

Another thing we used to have is inflation, so that the debt that people, corporations and the government took on was always paid back with dollars that were worth less. Of course countering that a little is lower interest rates, but not enough.

It's a fragile situation, and the problem of too much capital at the top has to sort itself out eventually. The best way would be for a lot of that capital to be invested somehow in society(no not in welfare - or not primarily).

Look, everyone knows capitalism is broken. Even "The Economist" says (U.S.) capitalism is broken. That's why we have Trump and Sanders as major contenders for the Presidency.

Logan Mohtashami says

Our kids might be soft, but they will be fine! This is America, it isn't Europe or Japan

You mean kids with 250K in student loan debt and a degree in anthropology.

tr6 says

out sourcing

The Chinese are desperately trying to copy our game plan on this

tr6 says

You mean kids with 250K in student loan debt and a degree in anthropology.

You guys know me enough by now to know I am going to throw down facts

70% of SLD is 14k and under
13% is over 50K
3% is over 100K

Majority of all loans delinquent are from college drop outs

Logan Mohtashami says

You guys know me enough by now to know I am going to throw down facts

70% of SLD is 14k and under

13% is over 50K

3% is over 100K

That's looking backwards. Education costs are the highest now and going forward. Do you think kids will stop taking in student load debt today.

tr6 says

That's looking backwards. Education costs are the highest now and going forward. Do you think kids will stop taking in student load debt today.

Liberal art degree might not get you much in life... but starting base median pay for college grads were between 48K-54K in 2015

Logan Mohtashami says

Majority of all loans delinquent are from college drop outs

I just met somebody with a regular job that has 60K of student loans from a degree she is not using (she is not paying them). I know it's anecdotal evidence. Just like I met a person with 250K in loans with 80K salary.

tr6 says

I just met somebody with a regular job that has 60K of student loans from a degree she is not using (she is not paying them). I know it's anecdotal evidence. Just like I met a person with 250K in loans with 80K salary.

I have looked at personal finances of people for 20 years.

All high student loan debt people are doing fine, the own homes, have babies, having sex, have cars, they're good!

It's the poor that need help

over 1 Trillion of student loan debt. 143M in labor force. That's 7K per worker. Logan, your numbers are off.

tr6 says

Not the proper way to look at it... Let me get my charts that break it down

Not the way to look at it hold on one sec... I will be right back

Logan Mohtashami says

I have looked at personal finances of people for 20 years.

All high student loan debt people are doing fine, the own homes, have babies, having sex, have cars, they're good!

It's the poor that need help

Both of the people I described are professionals with post graduate education.

I have tons on data on this

Here is a simple way to look it.

So much of debt is little but Grad students make up 40% of all the debt ... of course due to their degree... Please don't feel bad for them, they will be fine

Since you can't de leverage the debt, the real problem is with those who don't graduate college but still have the debt

That's the group that needs help big time

(Hence) why I am all for Free State College

Yes college inflation is an issue and yes we have 40% of total people not making their payments,

But... it's not as bad as it seems

You really don't want to *$#=-2 around when you're at school ..

Logan Mohtashami says

(Hence) why I am all for Free State College

Where administrators make 300K plus if you include their benefits.

And perhaps most concerning are the millions who borrowed, then dropped out, failing to get the degree that leads to an earnings boost. Dropouts are a disproportionately high share of defaulters, a group that typically owes under $9,000, according to the Education Department.

It seems to me there is going to be a huge reconciling of the higher level education process.

Goodnight gentlemen!

Logan Mohtashami says

There is a reason Obama is not Bernie. If students were not taking huge amounts of debts, who would?
The gov would have to do it on their behalf.

indigenous says

Only if we get another FDR, which could happen with Hillary?

The usual "Hillary is to the right of Pinochet" talk, used to justify supporting Trump, is risible, but this is even funnier.

Let me give you guys a core thesis why I am so against the Anti American Bears and will be

This cycle

We came off a massive household debt leverage bubble and right into a weak demographic patch and we still grew at 2% with retail sales looking like this

Speaking of another thing, did you guys read the Truila Report on San Francisco, the economist and I met at that UCLA conference last month and we talked about this very thing which he made a heat map data of.

Nice Gifs here

http://www.trulia.com/blog/trends/million-dollar-homes-2016/?cid=soc|

Heraclitusstudent says

Student loans are a better debt than credit card and auto debt.

Nice charts. Thanks Logan.