08-19-2019, 01:44 PM
(05-31-2019, 05:09 PM)Otter Wrote:(05-31-2019, 04:15 PM)fenders53 Wrote: OK, I didn't see assessing more tariffs to other nations coming. Make a new trade deal with Mexico and then threaten huge tariffs a few months later? This is an unpredictable mess with potentially dire consequences.
With oil prices plunging, tariffs with our largest trading partner is the last thing my state's economy needs. You'd think 38 electoral votes and Ted Cruz's uncharacteristically narrow 2.6% margin of victory in the 2018 Senate race would advise caution as to anything that could upset the economic apple cart. Between that and potentially devastating auto/part manufacturers in swing states that delivered the narrow electoral college victory in 2016, it seems like a pretty boneheaded political move, economics aside.
(08-19-2019, 12:58 PM)Otter Wrote:Yes, it would take the fun out of it if 10yr draw downs were common. My only "fear", if you want to call it that, is if the FED drops rate five times, and then a recession arrives. Then what? $2T annual budget deficits instead of 1T? Or maybe there is time for the tariffs to go away before we bring the economy to a halt? IMO the market is not extremely overvalued today. A lot of companies have slowly grown into their PE while the market has basically oscillated for 18 months. Anyway I think there is hope the bull has a few more years to run.(08-19-2019, 12:50 PM)fenders53 Wrote:(05-31-2019, 05:09 PM)Otter Wrote:(05-31-2019, 04:15 PM)fenders53 Wrote: OK, I didn't see assessing more tariffs to other nations coming. Make a new trade deal with Mexico and then threaten huge tariffs a few months later? This is an unpredictable mess with potentially dire consequences.
With oil prices plunging, tariffs with our largest trading partner is the last thing my state's economy needs. You'd think 38 electoral votes and Ted Cruz's uncharacteristically narrow 2.6% margin of victory in the 2018 Senate race would advise caution as to anything that could upset the economic apple cart. Between that and potentially devastating auto/part manufacturers in swing states that delivered the narrow electoral college victory in 2016, it seems like a pretty boneheaded political move, economics aside.
(08-19-2019, 11:40 AM)Otter Wrote: IIRC, the market typically rallies 15-20% after a 2/10 yield curve inversion, prior to the recession kicking off.I believe that is correct. More of a caution sign than a stop sign. And most every recession has a different set of circumstances. I find the markets ability to turn on a dime in the short-term fascinating. It's as if the market "forgets" what it was worrying about or celebrating 48 hours earlier.
I'd say that's more a characteristic of a bull market. There can be some short-term downwards volatility, but the exuberance typically wins out. 2008-2009 was the opposite. All news was bad news, as the market lurched lower and lower. Although the market bottomed in 2009 and commenced its now-precipitous rise, the overall gloomy narrative seemed entrenched until 2012. The initial stages of the bull saw some precipitous fall-backs. It will all shift back again to doom and gloom at some point. Thankfully, those periods tend to be brief in the overall history of the markets.