Do people think a recession won’t happen?
Don’t give me that “but but but the yield curve” nonsense because that shit is being propped up so hard it’s not even funny
How are people doubting that there will be a recession? What evidence do they need? I know so many people who don’t have a penny to their names who are buying shit on sale, booking cheap vacations, and thinking they are master stockpickers by spending the last 5% of their paychecks (or Covid checks for the real underachievers) on 0.34 shares of $TSLA. The hell is wrong with people
If you are long you will always be right. Always a bear and always a bull!
Even if you’re long $DB?
or Oil!
Why are you so angry man- your puts killing you? Perhaps you are wishing for a recession?
In all honesty- a technical recession is likely beyond doubt as there will be two consecutive quarters of negative GDP.... With that being said, there are many reasons why money is being moved into equities- the most significant being that there is simply nowhere else to go. Money managers need yield and they will continue to put money into risky assets so long as the yield is attractive and there are no other alternatives (which is the current case).
In other words- shorting this market will get you killed. Investors are pricing in the recovery in 1-2 years. Furthermore, some assets, notably bank stocks, are significantly undervalued (trading well below book value) and are good buys in this market. There are other assets beyond bank stocks but this is the most prominent in my mind.
Wasn’t meant to be a discussion around stocks, but fuck BB ones. If you’re going to dabble in bank stocks, go for the small regional ones
I agree that is where I have been focusing my money. Although I do think some BB stocks have a great deal of potential to at least rise back up to BV- long term growth prospects arent as attractive as the regionals though
Pls provide stock recommendations so we all can benefit.
You need to be 18 years old to open a Robinhood account sorry
SOLO, XSPA, and GNUS are the holy trinity for now lol
Bump hoping for a insightful thread
It's already happened or, at least, is in the process of happening - take your pick as numbers get released as they are all on a lag. In fact - I'd argue GDP and Unemployment are irrelevant this time around.
Why you ask? Just pull up a chart of the treasury's borrowing and the Fed's balance sheet. The former borrowed heavily to finance fiscal stimulus, the latter unleashed an avalanche of liquidity that still boggles my mind - and hopefully will never happen again (ha ha ha - that's a good one, right?). This basically ensured that companies were held together, banks would lend to smaller businesses and overall we borrowed just enough to bridge gap of an entire economic shut down. We hope.
More to the point - the line in the sand has been drawn for risk investors. Risk is encouraged and, literally, being financed by the Fed in the markets. Equities are the only game in town. I've gotten burned more times than I can count on this market because my emotion - angry at how short sighted we are being - over rules the logic which, in this case, is 0% rates + unlimited stimulus/liquidity = much higher equity prices. Substitute 'asset' for equity if you'd prefer.
Outside of the markets - remember that personal balance sheets were helped out by the stimulus checks, rent deferment, etc. and that as per usual, we just pushed things out a few months on payment plans, etc. Or accelerated write offs. Businesses that were on the edge are toast - those that weren't on the edge, but just moving along on a cash flow basis.. probably toast longer term - others that were in OK shape will probably come back, albeit with a much different perspective. In a fucked up way - I think main street will be less risk on, and wall street totally risk on - but that's a different issue.
We've reinforced the idea that we want, more than anything in the world, to ensure that our current status quo and quality of life is not breached. We are unwilling to take short term pain - actual losses - and instead pushing those off to whenever. Maybe we can thread the needle - borrow heavily, maintain our reserve currency status, start growing again, keep rates low and eventually the equation works - I hope so. I really, really do. I doubt it - but what else can you do.
My last rambling - people often forget the underlying market participants that exist in the markets. Endowments, Foundations, Pension Funds, 401k's - these are all long biased, growth oriented asset owners. Not only do they NEED growth - they can't afford to miss out on returns as they go up. The 'unlimited' bid - if you will. We can argue all day long over the companies, asset classes, active managers, etc. that money is allocated to - but it's gotta go somewhere. And, as I always recall when reading Kyle Bass's Widow maker trade on shorting sovereign government bonds - who the fuck are you going to collect from, even if you are right?
On point, esp. last 2 paragraphs. The idea of a "business cycle" with boom/bust periods is gone. If I had to warrant a guess (100% non-factual) I'd say that people in positions of power are seriously concerned about the political & social optics of a "failure" in the system.
If they can just keep the music going on for long enough...
Voodoo economics spotted.
I think that Bridgewater also wrote a piece on this earlier at the beginning of this year.
Bro we just borrowed $2Tn from our future wallets and over half of the US population is financially illiterate.
Even the prepubescent autists on this FINANCE site don’t understand how the economy works and think that $350k will be a livable household wage for a family of 4 in 2040 Manhattan. By the way, you little fucks, that’ll be the equivalent of somewhere in the neighborhood of raising 2 kids in the city on $180k in today dollars, and that’s not taking into account the repercussions of this printer go brrrrrr bullshit.
Even in this industry where our take homes increase by factors of 1.5-2x with each promote, I’m very concerned about my future livelihood just based on things beyond my control like the Fed’s recklessness and the fact that a lot of people in our generation are fucking fiscally irresponsible and have absolutely no agency
I need to move to fucking LatAm
You get to decide which side of the inflation game you want to be on. If you think it’s coming then go buy a place today, maybe a few places, and lever up at Powell’s phony rates at a 30 year fixed duration. If you’re right you’ll make a killing.
I don't think the Fed is being reckless.
JPow is a pragmatist who understands the power of data and structural thinking. He recognizes that this is an unusual downturn and doing everything he can do in his power to mitigate the downturn. Unusual circumstances warrant for unusual tools and we see JPow being cautious about what tools to actually implement. He always tries to explain what the intended outcomes of each new type of operation that the Fed is using. He also never forgets to mention that all the activities are being closely monitored so the Fed can collect even more data.
This is a very different kind of behavior from that of Alan Greenspan, who practically said "deregulation is gonna work" so I'm gonna sit here and not worry too much. Greenspan had too much faith in his certain "economic ideals". He was too carefree. J-Pow is careful and methodical.
In summary, I trust the Fed will do its absolute best. Idk if that best is good enough but I'm confident that it'll not aggravate like it did in the 1930s, when your run-of-the-mill recession became a depression because the Fed didn't do jack shit and let banks and businesses fail.
When you base your entire argument that the US is fucked on inflation and then say you want to move to LatAm>>>>>>>>>>>>>>>>>
Even with a looming recession, a lot of people doubled down in March and did well. Long/short funds didn’t lose much in the drawdown and went net long at the right time. Robin Hood traders went in extra hard too, according to data RH put out.
Even average joes with 60/40 funds did some re-allocating to stocks and are now up on the year or close.
Seems the smart money did well and the dumb money did well.
It came at the expense of people who were too greedy before the crash and too fearful afterward. I call that the Almost Smart money. People who have brains but no courage. They only bet big when it feels safe, which is obviously the worst time to do it. Smh.
Flights and hotels are dirt cheap, props to those who saved up for this or who bet big when others wouldn’t. Hopefully we can get back to normal life fast enough so these job losses can be prevented and reversed.
Great post
Can’t speak for all but as far as off the street traders they may just be learning about the market and think it’s time to buy because they keep seeing green.
Mutual Funds because that’s what’s gonna keep them in business, showing their clients profit even if it is temporarily to make up for the lost gains.
As far as PMs and HFs they take whatever position they think will make alpha.
I think most people are expecting a recession of some sort. But it probably won't be as big as some people think
Vitae sunt inventore modi. Laboriosam laborum quia eius possimus quis fugit. Molestiae voluptate sint quo rerum.
Voluptatibus placeat ab laborum et corporis fuga ratione. Aut et sunt iure ea totam recusandae. Unde dolorem inventore aperiam voluptatem. Consectetur necessitatibus accusamus ipsum neque quibusdam eaque veniam.
Sit non eum modi dignissimos cumque. Itaque aliquam deserunt praesentium vitae. Quos assumenda magnam occaecati asperiores excepturi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Adipisci laborum recusandae nemo hic itaque possimus atque. Magnam qui magnam sed deserunt vel explicabo odio pariatur.
Soluta saepe est perspiciatis accusamus ea numquam. Dolore voluptatibus est eum ratione fugit. Vel dolorem cum laborum tempore nobis.
Itaque inventore similique enim in rerum et. Aut id sint odio quo ratione. Facere sit voluptas sed odit cumque amet consectetur. Ut odio deleniti aperiam dolores consequatur. Ut quo laborum occaecati.
Ipsa provident fugiat necessitatibus consectetur dolore. Omnis animi deserunt voluptatem harum atque impedit soluta. Expedita exercitationem sit voluptates odit animi.