Nice one
U.S. stocks continue to soar!
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Re: U.S. stocks continue to soar!
What is super interesting is the steadfast belief that Interest rates could "never" go that high... and I say why not? What exactly is special about today's environment that interest rates cannot revert? Why are we to believe that we are in an era of permanently low interest rates?
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Re: U.S. stocks continue to soar!
Why? If 30-year is 12%, your HYSA would give you 8% and your company gives you a 10% raise. I'm not saying 12% is easy, but other things often move together.Stinky wrote: ↑Mon Jun 07, 2021 12:29 pmI recall, less than fondly, the 30-year mortgage at 12% that I took out in 1981.stocknoob4111 wrote: ↑Mon Jun 07, 2021 11:59 amThis is going to be particularly shocking for the housing market, imagine suddenly going from 3% mortgage rates to 10+% rates... what exactly will happen to the state of Real Estate? Unthinkable in my opinion as even though 10% rates are historically high they aren't too far off from the long term historical mortgage rate average of 8ish % prior to 2008. We have been in such a strange interest rate environment for so incredibly long that even a reversion to the historical norm is going to be simply shocking.
Most folks in their prime home-buying years would revolt at the thought of paying more than ?? 5%? 7%?
Re: U.S. stocks continue to soar!
Your company might give a 10% raise, but mine never did.Marseille07 wrote: ↑Mon Jun 07, 2021 3:58 pm
...Why? If 30-year is 12%, your HYSA would give you 8% and your company gives you a 10% raise. I'm not saying 12% is easy, but other things often move together.
Inflation is how workers' wages are cut without producing too much screeching from the workers. And if you think CPI-W really measures felt inflation I have this great bridge I know you will want to buy.
Answering a question is easy -- asking the right question is the hard part.
Re: U.S. stocks continue to soar!
And, if your company DID give you a 10% range, the marginal taxes on that raise (Federal, state, FICA) could easily be 30%, 40%, or even more.CurlyDave wrote: ↑Mon Jun 07, 2021 11:28 pmYour company might give a 10% raise, but mine never did.Marseille07 wrote: ↑Mon Jun 07, 2021 3:58 pm
...Why? If 30-year is 12%, your HYSA would give you 8% and your company gives you a 10% raise. I'm not saying 12% is easy, but other things often move together.
Inflation is how workers' wages are cut without producing too much screeching from the workers. And if you think CPI-W really measures felt inflation I have this great bridge I know you will want to buy.
So your 10% raise translates down to 7% or less net of tax. That's another insidious effect of inflation - folks are taxed at the marginal rate on any raises that they get.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: U.S. stocks continue to soar!
Looks like the rotation back into tech is back on the menu
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Re: U.S. stocks continue to soar!
Because the people that print the money have demonstrated (since the great recession and again strongly last year) that they are absolutely committed to keeping interest rates low even at the risk of inflation, which has failed to appear time and again despite the fears. They are willing to buy $120 billion a month in bonds to keep rates low, they are willing even to buy corporate bonds. I bet they would consider buying stock mutual funds if that served their purposes.stocknoob4111 wrote: ↑Mon Jun 07, 2021 3:18 pmWhat is super interesting is the steadfast belief that Interest rates could "never" go that high... and I say why not? What exactly is special about today's environment that interest rates cannot revert? Why are we to believe that we are in an era of permanently low interest rates?
There are lots of forces globally and domestically that work counter to inflation, from shifts in demographics, increasing productivity, and mass production of goods in poor countries. Ultimately the rather special period of high interest rates in the 70's and 80's was the direct result of government action attempting to beat inflation. This inflation, in turn, was caused by special events that are unlikely to repeat; the world depends increasingly less on oil, and increasingly less on oil from only a few parts of the world. The US is now the largest producer of oil and we can also rely heavily on natural gas. Could it happen again? Yes, but it is not terribly likely. It was a single event with a single, identifiable cause.
70% Global Stocks / 30% Bonds
Re: U.S. stocks continue to soar!
Yes, it's trading essentially as a bond fund right now. Rates up, Nasdaq down. Rates down, Nasdaq up.Robot Monster wrote: ↑Tue Jun 08, 2021 9:11 amSeems lately whenever the 10yr Treasury is down, Nasdaq outperforms.
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Re: U.S. stocks continue to soar!
Maybe a 10% raise was an extreme example. However, it doesn't make much difference because HYSA would be giving you 8% - all you have to do is to move your W-2 income to savings (and why wouldn't you?).Stinky wrote: ↑Tue Jun 08, 2021 4:41 amAnd, if your company DID give you a 10% range, the marginal taxes on that raise (Federal, state, FICA) could easily be 30%, 40%, or even more.CurlyDave wrote: ↑Mon Jun 07, 2021 11:28 pmYour company might give a 10% raise, but mine never did.Marseille07 wrote: ↑Mon Jun 07, 2021 3:58 pm
...Why? If 30-year is 12%, your HYSA would give you 8% and your company gives you a 10% raise. I'm not saying 12% is easy, but other things often move together.
Inflation is how workers' wages are cut without producing too much screeching from the workers. And if you think CPI-W really measures felt inflation I have this great bridge I know you will want to buy.
So your 10% raise translates down to 7% or less net of tax. That's another insidious effect of inflation - folks are taxed at the marginal rate on any raises that they get.
The point is, when 30-year is 12% there are other 'helping forces' in play to offset that, at least partially. It won't be the case of HYSA giving you 0.5% and somehow 30-year is 12%.
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Re: U.S. stocks continue to soar!
“The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers,” said Fiona Cincotta, senior financial markets analyst at City Index. “Whilst the Fed reassures that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market. Delaying action or even inaction could cause economic disruption that the markets fear.”
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This Bloomberg flash update has come courtesy of Robot Monster's too-much-time-on-hands.
link
This Bloomberg flash update has come courtesy of Robot Monster's too-much-time-on-hands.
Re: U.S. stocks continue to soar!
Robot Monster’s updates are more useful than anything posted on MarketWatch.Robot Monster wrote: ↑Tue Jun 08, 2021 9:43 am “The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers,” said Fiona Cincotta, senior financial markets analyst at City Index. “Whilst the Fed reassures that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market. Delaying action or even inaction could cause economic disruption that the markets fear.”
link
This Bloomberg flash update has come courtesy of Robot Monster's too-much-time-on-hands.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
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Re: U.S. stocks continue to soar!
Stinky wrote: ↑Tue Jun 08, 2021 10:06 amRobot Monster’s updates are more useful than anything posted on MarketWatch.Robot Monster wrote: ↑Tue Jun 08, 2021 9:43 am “The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers,” said Fiona Cincotta, senior financial markets analyst at City Index. “Whilst the Fed reassures that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market. Delaying action or even inaction could cause economic disruption that the markets fear.”
link
This Bloomberg flash update has come courtesy of Robot Monster's too-much-time-on-hands.
Re: U.S. stocks continue to soar!
"Robot Monster's too-much-time-on-hands"... will this continue to be a free service in the future? You're not trying to lure us into signing up to a paid newsletter, now, are you?Robot Monster wrote: ↑Tue Jun 08, 2021 10:13 amStinky wrote: ↑Tue Jun 08, 2021 10:06 amRobot Monster’s updates are more useful than anything posted on MarketWatch.Robot Monster wrote: ↑Tue Jun 08, 2021 9:43 am “The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers,” said Fiona Cincotta, senior financial markets analyst at City Index. “Whilst the Fed reassures that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market. Delaying action or even inaction could cause economic disruption that the markets fear.”
link
This Bloomberg flash update has come courtesy of Robot Monster's too-much-time-on-hands.
Re: U.S. stocks continue to soar!
Too much technical analysis going on here for Boglehead liking... I would rather explain the recent behavior as the S&P doing the limbo dance to the ATH line.
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- firebirdparts
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Re: U.S. stocks continue to soar!
You say that now, but when the Boojum ratio crosses over the Fandango index, you'll be cheering just as loud as the rest of us.
This time is the same
Re: U.S. stocks continue to soar!
Markets been mainly going sideways. But its had a wonderful run up already this year. Who knows how much higher it can go. PEs are still high for both the S&P 500 and NASDAQ. Really, I'm waiting for Q2 earnings and the next quarter of PCE and CPI. Since I index most of what's being reported is more noise than signal these days.
Last edited by rockstar on Tue Jun 08, 2021 2:48 pm, edited 1 time in total.
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Re: U.S. stocks continue to soar!
Ooo, you've got upon my secret master plan...OohLaLa wrote: ↑Tue Jun 08, 2021 11:49 am"Robot Monster's too-much-time-on-hands"... will this continue to be a free service in the future? You're not trying to lure us into signing up to a paid newsletter, now, are you?Robot Monster wrote: ↑Tue Jun 08, 2021 10:13 amStinky wrote: ↑Tue Jun 08, 2021 10:06 amRobot Monster’s updates are more useful than anything posted on MarketWatch.Robot Monster wrote: ↑Tue Jun 08, 2021 9:43 am “The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers,” said Fiona Cincotta, senior financial markets analyst at City Index. “Whilst the Fed reassures that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market. Delaying action or even inaction could cause economic disruption that the markets fear.”
link
This Bloomberg flash update has come courtesy of Robot Monster's too-much-time-on-hands.
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Re: U.S. stocks continue to soar!
"Another former Fed official sounds the alarm about the U.S. central bank's current policy, saying it's not well-positioned to deal with a rising threat of faster inflation." Twitter link
Re: U.S. stocks continue to soar!
So you ARE just like MarketWatch, who is trying to charge for their service.Robot Monster wrote: ↑Tue Jun 08, 2021 2:31 pmOoo, you've got upon my secret master plan...OohLaLa wrote: ↑Tue Jun 08, 2021 11:49 am"Robot Monster's too-much-time-on-hands"... will this continue to be a free service in the future? You're not trying to lure us into signing up to a paid newsletter, now, are you?Robot Monster wrote: ↑Tue Jun 08, 2021 10:13 amStinky wrote: ↑Tue Jun 08, 2021 10:06 amRobot Monster’s updates are more useful than anything posted on MarketWatch.Robot Monster wrote: ↑Tue Jun 08, 2021 9:43 am “The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers,” said Fiona Cincotta, senior financial markets analyst at City Index. “Whilst the Fed reassures that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market. Delaying action or even inaction could cause economic disruption that the markets fear.”
link
This Bloomberg flash update has come courtesy of Robot Monster's too-much-time-on-hands.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: U.S. stocks continue to soar!
Coming back to market comments, the 'DAQ is rumbling ahead of the S&P, but both are playing small ball with no home runs in sight.
The consolation prize is that a few days or weeks of small gains can add up to a significant increase.
The consolation prize is that a few days or weeks of small gains can add up to a significant increase.
Answering a question is easy -- asking the right question is the hard part.
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Re: U.S. stocks continue to soar!
A wise man once said, "Slow and steady wins the race. Too much soaring and we are setting up a crash." In fact, he said that exactly two months ago. link Since then, almost like a prophesy, slow and steady is all we've seen.
Re: U.S. stocks continue to soar!
Market seems to be really struggling to break through a ATH. Really slow days lately. It's better than being in freefall.
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Re: U.S. stocks continue to soar!
This is positive actually, the more sideways it goes the stronger the support levels becomes and serves as a stronger floor against drawdowns in the future, at least that is the theory based on technical analysis.
Re: U.S. stocks continue to soar!
I'll drink to that!stocknoob4111 wrote: ↑Wed Jun 09, 2021 1:59 pm This is positive actually, the more sideways it goes the stronger the support levels becomes and serves as a stronger floor against drawdowns in the future, at least that is the theory based on technical analysis.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: U.S. stocks continue to soar!
Wait until some politician of either flavor and either gender says something stupid.stocknoob4111 wrote: ↑Wed Jun 09, 2021 1:59 pm This is positive actually, the more sideways it goes the stronger the support levels becomes and serves as a stronger floor against drawdowns in the future, at least that is the theory based on technical analysis.
You know how the market goes up 2/3 of the time? Well, politicians say stupid things 2/3 of the time.
Answering a question is easy -- asking the right question is the hard part.
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Re: U.S. stocks continue to soar!
“Even if inflation comes out a little higher than Street expectations tomorrow, the Fed isn’t going to change its path,” Esty Dwek, head of global market strategy at Natixis Investment Managers, said in a Bloomberg TV interview. “There’s a lot of wait-and-see going on and really just thinking it would take a lot to really surprise markets.” link
This Bloomberg flash update has come courtesy of drunken, corn ravishing Chinese elephants.
This Bloomberg flash update has come courtesy of drunken, corn ravishing Chinese elephants.
Re: U.S. stocks continue to soar!
What's the deal today?
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Re: U.S. stocks continue to soar!
“The frothiness in CPI continues for now but between base effects and pent-up demand pressures, it is probably not giving a definite answer to the great inflation debate, and you need to read the bond market tea leaves...the bond market is falling in line with the Fed’s thinking that inflation is transitory and does not warrant tapering of monetary stimulus any time soon.”
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"If bond markets are right and we quickly return to low-inflation regime, that will have massive implications for policy. Basically, it will encourage money printing, more fiscal spending and much more debt going forward."
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"If bond markets are right and we quickly return to low-inflation regime, that will have massive implications for policy. Basically, it will encourage money printing, more fiscal spending and much more debt going forward."
link
Last edited by Robot Monster on Thu Jun 10, 2021 9:51 am, edited 1 time in total.
Re: U.S. stocks continue to soar!
Too early to say anything, but pleasantly surprised at the direction of the market today ! I will hit ATH if we close as we are now!
Re: U.S. stocks continue to soar!
Looks like a taper down is starting.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Re: U.S. stocks continue to soar!
Are we on the same forum? Everyone around here is scared about inflation, bonds, and rising ratesstocknoob4111 wrote: ↑Mon Jun 07, 2021 3:18 pmWhat is super interesting is the steadfast belief that Interest rates could "never" go that high... and I say why not? What exactly is special about today's environment that interest rates cannot revert? Why are we to believe that we are in an era of permanently low interest rates?
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Re: U.S. stocks continue to soar!
"Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, said the Fed intends for inflation to overshoot its 2% target moderately because that could be good for the economy. Higher inflation would mean higher interest rates, which would give the Fed more room to cut rates in the next economic downturn, she said." link
I find this interesting because of the suggestion the Fed wants higher interest rates, which would be a blow to TINA, no?
I find this interesting because of the suggestion the Fed wants higher interest rates, which would be a blow to TINA, no?
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Re: U.S. stocks continue to soar!
C'mon, lostdog. You're underestimating the power you have over this market. You don't realize it, but you just accidentally willed this taper to occur. Please remember, dear lostdog, the wisest words Jack Bogle ever said: "With great power comes great responsibility."
Re: U.S. stocks continue to soar!
The yin to Forester's yangRobot Monster wrote: ↑Thu Jun 10, 2021 9:54 amC'mon, lostdog. You're underestimating the power you have over this market. You don't realize it, but you just accidentally willed this taper to occur. Please remember, dear lostdog, the wisest words Jack Bogle ever said: "With great power comes great responsibility."
Last edited by Ramjet on Thu Jun 10, 2021 2:40 pm, edited 1 time in total.
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Re: U.S. stocks continue to soar!
Bulls regain the upper hand.
Seems like the small cap happy times are temporarily over, though.
Seems like the small cap happy times are temporarily over, though.
This time is the same
Re: U.S. stocks continue to soar!
Slow build up to the highs again. We might even see a melt up later this afternoon.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Re: U.S. stocks continue to soar!
I think the "no" part is the operative word.Robot Monster wrote: ↑Thu Jun 10, 2021 9:45 am
...I find this interesting because of the suggestion the Fed wants higher interest rates, which would be a blow to TINA, no?
If all that higher rates do is still guarantee that T-bills lose out to the combination of inflation and taxes, i.e. they remain a guaranteed net loss for your money, TINA is still the prettiest girl at the dance. Now she has a wild side and might even be the type your mother warned you about, but she still has lots of allure.
Answering a question is easy -- asking the right question is the hard part.
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Re: U.S. stocks continue to soar!
Small Caps are getting hammered, Large and Bonds are rallying... one of these asset classes has got things VERY wrong, we will soon find out which one.Marseille07 wrote: ↑Thu Jun 10, 2021 9:47 am And we might end up flat, if not red. Gains fading now.
Re: U.S. stocks continue to soar!
Lol, if we're real unlucky all of them will turn out to be wrong...stocknoob4111 wrote: ↑Thu Jun 10, 2021 11:49 amSmall Caps are getting hammered, Large and Bonds are rallying... one of these asset classes has got things VERY wrong, we will soon find out which one.Marseille07 wrote: ↑Thu Jun 10, 2021 9:47 am And we might end up flat, if not red. Gains fading now.
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Re: U.S. stocks continue to soar!
Yes, that's a good point. Higher interest rates don't necessarily mean higher real rates. Presumably, though, the Fed:CurlyDave wrote: ↑Thu Jun 10, 2021 11:35 amI think the "no" part is the operative word.Robot Monster wrote: ↑Thu Jun 10, 2021 9:45 am
...I find this interesting because of the suggestion the Fed wants higher interest rates, which would be a blow to TINA, no?
If all that higher rates do is still guarantee that T-bills lose out to the combination of inflation and taxes...
-- would want rates high enough that cutting them during an economic downturn would have an effect
-- the Fed is serious about not allowing inflation to move materially above 2% in a persistent way
So, if inflation is 2-ish (the 10yr breakeven is currently 2.32%), the question then is how high would interest rates need to be, like I said, in order to be high enough that cutting them during an economic downturn would have an effect. Could it be something like 1.5%, or could it conceivably be something like 2.5%? Either way, it would be a little bit of a soft blow to TINA, if my thinking about this is correct. Of course, this is assuming inflation maintains a 2% target, which is a big unknown.
Probably staying the course on one's investments is a good way to play this.
Re: U.S. stocks continue to soar!
Prices are always wrong, the EMH only says that we can't know which direction
Re: U.S. stocks continue to soar!
I wouldn’t say hammered, IJR is down 1%, that’s not hammering.stocknoob4111 wrote: ↑Thu Jun 10, 2021 11:49 amSmall Caps are getting hammered, Large and Bonds are rallying... one of these asset classes has got things VERY wrong, we will soon find out which one.Marseille07 wrote: ↑Thu Jun 10, 2021 9:47 am And we might end up flat, if not red. Gains fading now.
Re: U.S. stocks continue to soar!
Soaring, free falling, hammered, hyperbole is part and parcel of these thread.Nicolas wrote: ↑Thu Jun 10, 2021 1:01 pmI wouldn’t say hammered, IJR is down 1%, that’s not hammering.stocknoob4111 wrote: ↑Thu Jun 10, 2021 11:49 amSmall Caps are getting hammered, Large and Bonds are rallying... one of these asset classes has got things VERY wrong, we will soon find out which one.Marseille07 wrote: ↑Thu Jun 10, 2021 9:47 am And we might end up flat, if not red. Gains fading now.
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
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Re: U.S. stocks continue to soar!
I've noticed that the daily stock market headline has to make use of all the words in the english language for things that go up and down, and what you discover is that there's more variety on the down words. I take it that's because in this world, there are more things able to collapse or fall than there are to rise. The only thing that could do that in the olden days were birds (soar) and the sun (rise). They also use the word "surge" once in a while. For some reason they never use the word "float" but you are allowed to say stocks "drift higher". It would be fun to keep a list for a year and two and see just how much they have to recycle their headlines.
Oh well. 2nd law of thermodynamics and all that. The forces of deterioration are everywhere.
Oh well. 2nd law of thermodynamics and all that. The forces of deterioration are everywhere.
This time is the same