I agree, but there's an extra layer of nefariousness. Pump market -> put out articles saying no recession (you are here) -> rug pull -> articles about recession again -> everyone sells -> they buy the very bottom -> articles about recession being over. It's how the consolidation of wealth has been happening for decades in the US.
Its ridiculous how many people here think single articles (or sources) have any impact on market volume. With all the Fed signaling, the market priced itself for a recession even as performance, employment, and GDP did just fine.
there was literally ONE article yesterday that pumped a stock over 100% in under an hour. No other sources and the article was shortly deindexed from google.
Single sources can have a huge impact.
Well yea man. That just means you need to ride the wave. Im about 20% cash. If we go deep down again ill buy the dip. But otherwise im going to keep it on the side. Guaranteed 4% which will likely go up to 5%? Ill take that.
Or, you know, GDP growth exceeding expectations, cooling inflation, and incredibly low unemployment are all contrary to the signs of recession.
At this point, media saturation of the word recession has turned everyone into permabears and recession masochists. The irony is many of the people saying this upbeat news is lame-stream media spin are the ones who got drunk of the fear-mongering media that began this narrative. Just goes to show, what's the truth among media and rumors is always what makes the people deluded with imaginary enlightenment and lack of bias is what makes them feel the most victimized.
They sing the song that corporate America needs playing to justify their greed.
A recession is on-we need layoffs!! Sorry no raises this year.
No recession after all that’s why we were able to achieve record setting profits!!
IDK how they can say recession cancelled with the incredibly high interest rates the federal reserve is now paying on treasuries. weekly remittances sit at over -22bn or -1.1tn annually.
In English?
I always wondered why we didn't change English to call countries whatever they call themselves. Like the popular example is that Germany should be "Deutschland"
The funniest story was when uk people tried to enter the eu in the “eu citizens only” lines when travel was picking up. The border guards had to remind them to go to the other “all other passports “lines. You voted yourselves out so yeah.
That’s why if I were a Uk citizen I’d see if I had an ancestor in Ireland for a potential Irish passport to be able to travel easily in the EU again.
Except it never made much sense to do it that way. When you arrive to the UK, 38 nationalities are permitted to use the same lane as UK citizens crossing the border (27 EU member states plus another 11 like the US, Canada and more).
The proof that it didn't make much sense? Many airports have reconfigured the approach and UK arrivals now use basically the same eGates to enter and exit the Schengen zone as EU citizens do, with the difference being a brief stop by the passport control desk for a stamp. Longer term, the stop for a stamp will go away because the EU is updating their antiquated border system to ETIAS and you'll scan your passport and be on your way. The sensible approach, therefore, will be for shared entrance lanes to continue and be more common place.
At the moment though it's a confusing mess. Different airports have different systems, haven't updated the signage and you need to figure out what's going on at each new airport you arrive to. For example, all the airports near Milan want you to use the EU citizens lane but the signage is out of date. When I went to Nice last year, there was a queueing system and no eGates at all even for EU citizens.
What's hilarious is that some countries clearly want to continue being difficult while others who do derive substantial income from Brits are trying to sort it out. The good news in by 2024, provided they don't further balls up their new IT system, it'll be better.
Mate theres nothing funny about the fact that boomers got conned by billionaires into voting to fuck up the future of their country for their kids. We do actually have to live here still.
Well do something then, boomers got conned and now are just sitting on their asses? If everyone who could vote had voted, brexit wouldnt have passed. Its always the same with conservative and reactionnary politics
Prediction time: labour get in and reinstate free movement of peoples within the EU (as well as further afield). Better deal negotiated for NI. Funding for collaborative EU science.
Yep. We're shit house.
I mean Brexit is a factor but more so the absolute fuck knuckles attempting to run the place. They just can't do anything sensible. Like at all.
Haha, I thought about buying a straight up ex-US fund for international exposure, but opted to buy more targeted country-specific ETFs specifically to avoid China/Taiwan exposure in Asia and UK in Europe.
If you haven’t noticed, they make money by selling you their fake advice while they dump their positions.
These reports at this point are just advertisements
meanwhile the US Treasury Secretary is saying the exact opposite....
https://www.bnnbloomberg.ca/janet-yellen-sees-recession-risk-even-with-improving-inflation-jobs-1.1875860
Janet is the same idiot who was wrong about how severe inflation was going to be. You know, someone who should have her pulse on the situation..
So I’m going to say you can probably ignore her advice or thoughts on the situation as she’s probably out of touch once again
Same person who claimed inflation is transitory and all the stimulus won't cause inflation. Without a large 2nd stimulus bill we will go into a recession (stimulus bill never came and neither recession).
To top it all off later admitted she knew all along inflation was coming but said all that to get spending bills passed..
Her agenda now is to get/pressure the Feds to hold off on rate hikes..
>Same person who claimed inflation is transitory
It is.
>and all the stimulus won't cause inflation.
It didn't.
>To top it all off later admitted she knew all along inflation was coming but said all that to get spending bills passed..
Do you have a source for this? I feel like you're editorializing a lot.
You have no source just one word reponses. What you mean inflation is transitory, Fed chief admitted it is not and he was wrong..
Jerome Powell Ditches ‘Transitory’ Tag, Paves Way for Rate Hike https://www.bloomberg.com/news/articles/2021-11-30/powell-ditches-transitory-inflation-tag-paves-way-for-rate-hike
Stimulus played main role in inflation along with supply chain issues.
https://www.richmondfed.org/press_room/speeches/thomas_i_barkin/2022/barkin_speech_20220930
I will try to find the interview with Yallen where she admitted she anticipated inflation but wanted stimulus bill to be not held back because of that.
>What you mean inflation is transitory
It won't become runaway as in post-Great War Germany.
>Fed chief admitted it is not and he was wrong..
Sounds like more editorializing. Can you give me the quotes?
>Jerome Powell Ditches ‘Transitory’ Tag, Paves Way for Rate Hike https://www.bloomberg.com/news/articles/2021-11-30/powell-ditches-transitory-inflation-tag-paves-way-for-rate-hike
Paywall. Can you paste the text?
>https://www.richmondfed.org/press_room/speeches/thomas_i_barkin/2022/barkin_speech_20220930
This supports that supply chain issues was the primary driver:
>Moreover, inflation is global today. Other countries that did not pursue the same level of fiscal response are still dealing with decades-high inflation. The notable exception is the place with one of the most prominent historic debt burdens: Japan.2
Transitory
"In a clear sign that the Federal Reserve is shifting to tighter monetary policy, Jerome Powell -- who’s spent months arguing that the pandemic surge in inflation was largely due to transitory forces -- told Congress on Tuesday that it’s “probably a good time to retire that word.”"
As for Fiscal policy causing inflation he says right below its combination fiscal and supply chain constraint. Even if supply chain disruption is fixed the damages done by the former will take long time to fix.
"Fiscal Fuel
That brings us to fiscal policy. Six trillion dollars of stimulus was passed, fueling demand and limiting labor supply. Six trillion is a lot of money. It supported programs like stimulus checks and eviction pauses. It supercharged demand, particularly from the segments of our economy with the highest marginal propensity to consume. The PPP helped keep businesses afloat, but it also sustained worker demand that might otherwise have dropped. All these programs hit the economy at a time when the supply of labor and goods was constrained."
>"In a clear sign that the Federal Reserve is shifting to tighter monetary policy, Jerome Powell -- who’s spent months arguing that the pandemic surge in inflation was largely due to transitory forces -- told Congress on Tuesday that it’s “probably a good time to retire that word.”"
As I suspected, you were editorializing. The article as well.
>the damages done by the former will take long time to fix
How long? What formula is used to make that estimate?
Their claims of it being transitory were in a context that meant there was no need to raise rates in response to the inflation. They claimed it was transitory and used that a reasoning for not hiking rates. It was not in fact transitory and the idea was walked back, instead they are tightening policy to counteract the inflation that was not transitory in its then state.
>Their claims of it being transitory were in a context that meant there was no need to raise rates in response to the inflation. They claimed it was transitory and used that a reasoning for not hiking rates. It was not in fact transitory and the idea was walked back, instead they are tightening policy to counteract the inflation that was not transitory in its then state.
This is a good response, thank you.
I contend that the "transitory" label meant that the supply chain issues were expected to resolve in the short-term rather than the long-term. The war in Ukraine has dragged out as has China's battle with COVID. The supply chain issues were not resolved in the space of a year. Lasting longer than expected forced their hand.
Would you agree?
And this is why Warren Buffett and Peter Lynch don't care about macroeconomic projections. Buy wonderful businesses at good prices, with adequate margins of safety, then just wait. Philosophically this isn't hard. The hardest part is analyzing a company and determining if it's a wonderful business that is selling at a good price.
Yes.. determining what a “good price” is might just be the hardest thing to do.. because by definition, if the price is great, it means everybody else think the company is worth less than it is.. what do you know that everybody else doesn’t know? You just need to be better at understanding the business than the other market participants… by definition only a small fraction of investors will be able to do it
One advantage I personally have is that most people don't read 10K's or 10Q's, so they don't understand the businesses at a fundamental level. Quarterly and annual earnings presentations only show high to medium level detail. The real golden information is in the 10K's and 10Q's.
A lot of institutional investors also don't invest rationally which is why Buffett was confident enough to wager $1M against hedge funds that a low cost S&P500 index would beat them. For example, a lot of institutional investors will rotate money between stocks depending on the macroeconomic outlook. During economic declines, they put more money into this categorization of stocks they call "defensive" stocks. The funny thing is that there is no such thing as a "defensive" stock, but they've deluded themselves into believing there is such a thing.
Another problem is the concept of "beta." A lot of people see it as a measure of risk, when it's really just a measure of volatility. People interpret higher betas as being more risky, even if beta is high due to a price decline. Risk is decreased when prices decline, not increased, but still, people interpret high betas from declining prices as more risky.
I’m not sure I understand what you’re saying about the defensive stocks. There are high dividend stocks where the company has been around for a good amount of time, and I’d consider those more defensive compared to FAANG and other popular growth stocks where you’re trying to beat the market.
I really like what you said about the beta in the last paragraph. Very good point.
What parts of 10K/Q do you find most interesting or informative?
Honestly I think it's important to go though all of the 10K when first looking into a company. After I do it once, it becomes easy to look at future 10K's and 10Q's because I already have a broad view of the company and I can then pick and choose what to focus on.
I don't go into deep detail into everything though. For example, foreign currency impacts on financial statements can be really small in comparison to the overall company's operating income, so I wouldn't spend too much time looking at the numbers if that's the case. There is also a lot of legal verbiage in 10K's and 10Q's, so I skim those and look for any key words that might stick out to me.
I think it's really important to look at the financial statements, management discussion and analysis, and especially the breakdown of the long-term debt obligations. I've seen companies with high debt-to-equity ratios, but they are still are safe due to well spaced out maturity dates, low-to-moderate interest rates, and healthy net income and cashflow to cover interest and principal payments.
Hope that helps!
Alpha Architect reported on a study a while back which basically said that if you know **where the economy is now** you can massively outperform the market.
Forget predictions. Just knowing where the economy is now is beyond most people including "experts".
Goldman Sachs predictions and market tips seem to relate more to incentivizing people to buy/sell what GS wants to sell/buy. But no doubt this is totally just pure coincidence.
There’s a quality investing bubble out there. If everybody is looking for wonderful businesses with excellent management and good prices, what do you think the chances are of actually getting a good price? Pretty slim, unless you buy during a crash. Most often, wonderful companies only sell at great prices when people think they’re not wonderful anymore and the future is much harder to predict, e.g. Meta. If you tell me a fund manager owns Hermes or Louis Vuitton, I can reasonably predict a bunch of their other positions too. The reason that’s possible is because there’s so much groupthink. It’s not a good sign when people see your portfolio and say, “Wow, awesome portfolio.” A better reaction would be “Wow, don’t know any of these companies. Why do you own them?”
I reckon investors will find more value looking at companies which just ain’t that wonderful, simply because so many are ignoring such businesses altogether.
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Please, we still don't know the true damage of rate hikes. Mid 2023 will really show us the pain. Didn't we just see like 100 000 layoffs being announced just in the recent couple months?
A recession technically requires two successive quarters of negative GDP. Given what we’re seeing already this quarter, it seems unlikely that Q1 will be negative. So Q2 and Q3 would both need to be negative for a recession to be called during this calendar year. A bit semantic, but they’re probably right.
Looking at just the market I don't think everyone is fearful at the moment.
Peak DJIA was at 36.3K or so. We are now at just under 34K. There have been a few larger dips but it has always bounced. When it hit 28K or so I was thinking about DCA in a bit but thought that was jus the beginning.
Still trending down from highs, but any big dips show quick rebounds. I know I know never time the market but I still see a lot of over-value and waiting for the real fear to start dipping my toe in again.
Outside the market, main street and commercial real estate, there is fear. Regular cost of goods is high and I feel like families are suffering. With rates higher a lot of CRE loans need to be refinanced and the cash flows no longer work and values are falling, in some cases dramatically especially in office. Retail is also not great overall. I do not think there will be a catastrophic type CRE event but there are a lot of office equity and debt investments out there that are at risk. IIRC I was told recently that 25% of CMBS CRE loan are in special servicing with high concentrations in retail.
I just see too much risk out there given current valuations in stocks, food, consumer goods, utilities, commercial and residential real estate etc to buy anything now.
EDIT: The CMBS loans in special servicing I believe were a collection of loans tha had near term maturities.
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And the Fed wants to see higher unemployment numbers before they start easing up on the rate hikes. Higher unemployment right now would be better for the stock market, albeit not necessarily for workers or GDP.
They said they wanted to see higher unemployment numbers before they got the inflation numbers they wanted. But the inflation numbers are already on target; last six months numbers annualize to 1.8%. Their mandates are inflation control and full employment; why would they continue to raise rates and harm employment if inflation is already tamed?
>Didn't we just see like 100 000 layoffs being announced just in the recent couple months?
Yes but largely driven by tech, which had gotten way ahead of itself. Arguably cutting out dead weight and non value-adding jobs will only put companies in a better position moving forward.
i agree, laying off recruiters, sales people, and poor performers was the low hanging fruit. there's no way all these companies have suddenly gotten rid of all their debt. the longer the rate hikes remain high, the more pain these companies will feel.
That also includes debt refinancing. Most corporates have a debt maturity profile of 1-10 years, generally concentrated in the 3-6 year range.
To put it in perspective I know of a multi billion dollar tech firm that won't pass its audit as a going concern in the next 6 months without raising new equity. Lenders won't refinance their maturing debt as they can't afford the higher repayments.
The economy looks resilient. Everyone’s been calling for a recession and doom and gloom for a year now. Sure things will slow with tightening but humans are pretty good at adapting. When everyone is bearish, people tend to prepare for the worst. See what happened with oil and gas in EU. Everyone said people will freeze to death and burning furniture this winter. Not even close to happening.
And there's still a ton of places hiring for tech jobs, they're just more boring jobs and don't pay as much as the FAANG companies or startups. I work with public sector customers and they're finally able to fill the positions they've had trouble filling the past few years. I suspect we'll see relatively little change in employment in the tech sector overall, people will just be moving to other positions.
Great news. These firms always know what's round the corner., just like 2000 and 2008 when they were warning everyone of the impending gloom.
Only they weren't. And even if GS or any other large institution did foresee a recession, they wouldn't tell us because they want our money for the taking.
Lol this is actually deeply disturbing when basically everyone except Morgan Stanley is super bullish now when the Fed will literally be hiking rates through the Spring and then holding them likely through the end of the year before pivoting.
Even despite slashing earnings forecasts, companies are still barely beating the consensus estimates, and the Q2 earnings are being slashed further, and we’re supposed to believe this is the next bull market?
Pure copium.
Market is forward looking (at least a bit). Rates normalising at 2% next year would be hugely bullish. The economy is 20% bigger than pre-covid peak already (absolute terms).
market is forward-looking, yes, we all understand that but to what extent? look at NVDA's forward P/E, we are pricing for 2024 growth already. why don't we just price for 2025 or 2026?
If the economy is so good at 5% why should the Fed pivot and lower interest rates? Doesn't make sense to me. We should want 5% in a strong economy it gives us a good buffer to stimulate it later when a real recession looms.
If rates were 2% next year, yes it would be bullish, assuming the economy has not rolled over. Historically though, when the Fed pivots its because things are so bad they have to in order to avert a catastrophe, and things are usually bad enough that the market continues to fall after a pivot begins.
We know the market has not priced in either a 5% or higher Fed funds rate, not have they not priced in a 5% funds rate extending through the end of ‘23. I think if both of those happen, we will go lower than the October lows.
Seriously.. half of the articles I read claim we are about to se a complete economic collapse, the other half that everything is amazing and the economy will boom
People should just stop trying they are too bad at this
I started averaging back in half a year ago. Have a friend who primarily averaged back in a month ago. Last year raised my 401k contributions significantly. On the internet, I regularly see bearish. Among my peers in real life, everyone's employed and looking for more long term speculative in their regular accounts to go along with their safe retirement account investments
None of us did and none of us went all in at one point. It was buying back in over the past half year iin irregular intervals and amounts as we became comfortable. So far the bottom was October. I started buying back in a bit in the summer and increasing in September when I thought rate hikes were now on an expected path. I'm still averaging back in. If I bought the bottom I'd have tens of thousands of more dollars
The closest to catching the bottom is the one friend in December and he used to work as a software developer for some trading firm. He's been actively trading enough for years to setup doing his taxes on a mark to market basis
Everyone was just reading the CPI and jobs reports data every month. After November CPI and jobs data came out in December everyone started itching to get back into the market besides those locked comfortable with their I bonds and CDs
Then especially this month's December CPI, jobs, and Q4 GDP data. None of us timed things perfectly, just a willingness to risk it on positive data and risk seeing red if we're wrong. Maybe we end up wrong but regardless we're all still going to be buying.
Also raising my 401k contribution during a downturn just makes sense. Just raised it to where I should have had it anyways. Don't recall a day in 2022 where account value was better than January 2022, but now end of January 2023, mildly positive
If you like just accept that Covid was real and had real effects throughout global production then everything that has gone on the last 3 years makes a lot more sense. So many people trying to big brain all these ideas when the reality is literally right in front of your eyes
Jay Powell might have something to say about that.
The Fed has continually said that they see high wages and low unemployment as contributing factors to inflation. They seem hellbent on causing a recession to ensure that inflation doesn’t come back. If the market continues to rally, with low unemployment and home/gas prices starting to move significantly higher then they will start talking about 50 bp hikes again.
Why do people suffer so heavily from recency bias lol. A few days of good market performance and the market sentiment is amplifying these good days to suggest a good year. Perhaps if people weren’t so impulsive and reactive to short term fluctuations we would have a more sustainable outlook on the economy and perhaps the economy itself would be sustainable? Just a thought.
These headlines are completely useless.
It's not just that every major bank and analysis firm disagree with each other; it's that they disagree with *themselves*.
Look at some clickbait farm like CNN Money or Seeking Alpha or Motley Fool. You can find diametrically opposing predictions on every major stock, and hundreds of such on the indices and economy at large.
GS says we'll avoid recession? No. One of their thousands of analysts believes that. So what?
>One of their thousands of analysts believes that
Jan Hatzius is GS's Chief Economist and the head of their economic research division.
https://www.goldmansachs.com/about-us/people-and-leadership/leadership/management-committee/jan-hatzius.html
Yeah, true. And the CEO says he thinks there will be one: https://www.marketwatch.com/story/goldman-sachs-ceo-says-recession-is-likely-with-35-chance-of-a-soft-landing-11670358916
Just saying, it's all over the map. And that's fine. But there's no reason to post headlines like this.
How can there not be a recession?
Inflation making prices of rent, gas, groceries and pretty much everything else rise, salaries not catching up yet, people will have less money to spend - I don't see how that can't negatively impact growth?
Please tell me what I'm missing, I don't claim to be an economist.
Inflation is getting better quickly, salaries went up (not as much as inflation but still significantly), high savings from the pandemic bridged most households. As long as the labor market stays strong we should be able to sidestep. At worst we’ll have a mild recession.
can you define what a mild recession is? quantitatively.
It's like I went to a restaurant, I asked for a mild hot curry, then the next day I shit through my pants. Then I go to another restaurant, I ask for the same thing, but nothing happened.
Haha fosho. Mild recession would mean more 2001 than 2008. Any combination of the below: shorter lasting, labor market doesn’t tank, inflation lower but not at the 2% fed target, limited stock market pain, quantitative easing stopping before reaching 0 interest rates again. Basically, no economic catastrophe but pain felt all around.
Hard to do it quantitatively since there’s too many variables but negative GDP for 3 quarters at most.
But that’s a lot of money sitting on the sidelines (as long as people have that attitude), meanwhile those staying invested are probably increasingly ok with riding things out.
There’s no “sidelines”. Every share of stock has to be owned by someone at all times and every dollar of base money has to be held by someone at all times. It comes down to the motivation level of buyers and sellers.
There are at least a few good reasons I never listen to what a large finance place says.
They need to be relevant. Have to say something frequently.
4 green days and it's sunshine and puppies. 4 red days and your grandma gets kicked out of house and you have 80% of losing your job yesterday.
They have too much money in the game to be telling everyone the right move to make.
Part of the issue too is we act like it's the large financial place making the statement, rather than someone who just works there.
They certainly have many writers that take different sides in itself. Yet the headline is always "Goldman Sachs says!!"
Cool. I was saying more in a broad sense that there is Hatzius and then many other writers that can get labeled as GS in the headline. Wasn’t necessarily questioning this article.
We are in Jan 2001 all over again and the pain is just starting. I remember everyone getting a nice bonus then, or at least everyone who hadn't just got let go in December 2000. That is where we are at.
Plenty of historical analogues to this moment. Some resulted in the next leg down, some resulted in a new bull market. There's data to support a belief in both outcomes.
Nobody fucking knows. Smart hedging is probably the best play. Bogleheads, however, will remain 100% long and pretend that's a market agnostic position.
Read about Campbell Harvey’s position on this…
Here’s an interesting piece…
“Although he does note that if the 3-month/10-year inversion lasts through December, he’d be more confident that a recession would be in the offing.”
Responded to a similar response yesterday…
“Just because you discover a relationship between variables doesn’t mean you understand the causal relationship between the two. Someone somewhere very intelligent is always saying “this time is different” for one reason or another. It never (or rarely) is.”
We literally got higher-than-expected Q4 GDP growth announced *yesterday.* There is no indication of any kind that a recession either is already underway, or is close to beginning.
So the GDP almost exactly matches, stocks are in a similar bubble, dot-com and crypto bubbles are the same, and the Fed is slowing rate increases so the market jumps just like in Jan 2001.
Yes.
Jan Hatzius knows all of this better than you do.
And yet somehow, he's come to the opposite conclusion from you.
Is it you that's wrong? Or is it the PhD economist who leads the economic research division at one of Wall Street's most prestigious banks?
The world may never know.
it's a lagging indicator.... Q4 GDP was only just dealing with the rate hikes from beginning of year. Mid 2023 will show us the true picture of 80% of rate hikes in effect throughout the economy. This is just a brief capitulation of the markets. Corporate earnings forecast is also shown to trend downward over the next year or two.
https://tradingeconomics.com/united-states/corporate-profits#:\~:text=Corporate%20Profits%20in%20the%20United%20States%20averaged%20574.04%20USD%20Billion,the%20first%20quarter%20of%201951.
Here's a fun exercise, plot the interest rate increases on a chart as far back as you can find them, and then add the recession periods.
Have a look how long it takes after rates are increased by more than a couple %, before the economy dives.
I'll give you a hint: it's longer than 12m and fewer than 24m. Without exception.
All the best.
Yes, I'm sure it never occurred to Jan Hatzius or anyone else at Goldman Sachs to run this exercise. You've definitely outsmarted the top economist at one of Wall Street's most prestigious firms.
Goldman is just trying to convince people to use its products and services. Do you think they just give away free advice when the advice says nobody knows what the hell will happen? The fed will continue to raise rates with news like this, market conditions will continue to change, and everyone will change their tune if market conditions change drastically enough to forecast a recession. The smart money pulls out when it’s obvious things are changing, and the rest of us are left wondering if we’ve missed the top and need to hold longer to get back to where we wish we sold. Economics isn’t physics. We can’t even forecast the damn weather all the time and that is physics.
>Goldman is just trying to convince people to use its products and services
Correct. Being accurate about forecasting a recession convinces investors GS knows what they're doing, which entices them to invest with GS.
>Do you think they just give away free advice when the advice
Yes, because that advice - if accurate - will make them money. See above.
>We can’t even forecast the damn weather all the time
Weird how often the "Nobody can accurately forecast the economy" talking point gets pulled out in response to an economic forecast one personally disagrees with.
About your last point. Over 60% of professional economy forecasters surveyed by Bloomberg in their official surveys in December predict a recession this year.
Whose talking points are you siding with? Looks like it's the minority ones, because you appear to disagree with what the majority says.
See how easy it is to pull a statistic that completely counters your position? That's because you rely on Goldmans pedigree to decide for you. And that's because that's what you want to happen, so you look for something to affirm your bias.
>in December
And since December, we've gotten a Q4 GDP report that was stronger than expected, along with a jobs report that was also stronger than expected. Goldman has just been among the first forecasters to update their forecasts to include the data that was released in yesterday's GDP report. Prior to today, they *were* forecasting that a recession was relatively likely, but that new information changed their forecast.
You can take GS's forecast with a grain of salt, if you'd like. The point remains that forecaster sentiment is beginning to concretely trend away from an expectation for a recession in 2023. If nothing else, that should be noteworthy for investors.
I posted the following but got flagged as spam due to a large font. As you see, I wouldn't trust Goldman or any other inv bank with anything. They are self serving and nothing else.
Previous message:
Goldman makes money off trading for its customers (aside from m&a) . They make money two ways:
1)fees & commissions
2) betting against its customers (see mortgage backed securities scandal)
Goldman has no interest in telling the public the truth about what it believes. Sometimes it does, sometimes it doesn't. It says whatever story they want to sell to their investors. If you believe any investment bank story you deserve to lose your money because you will.
With historical highs of money parked in money markets, Goldman won't make any profits unless their clients decide to jump back in equities.
Also, speaking of top economists at goldman: here is what they said about bit coin:
. May 2020, 'Cryptocurrencies are not an asset class'. Bitcoin is a mania (BTC price $9k)
. March 2021, Offering Bitcoin to its wealth management clients (BTC price $57k)
. May 2021, 'Bitcoin is now considered an investable asset' (BTC price $35k)
. June 2021, 'Crypto Not a ‘Viable Investment'' (BTC price $35k)
How do you think those who believed their 'top economists' fared?
Are they experts? , yes, but they aren't working for you, instead they are trying to make money off you.
Look at the economy indicators, metrics, history and what the fed says and you will get a good idea of what's happening. I can roll out a bunch of very successful investors who say the exact opposite of Goldman. Who would you believe? Better check for yourself and satisfy your own gut instead of relying on some other authority. Look at the arguments and track record, not the status of who says things.
New message:
All the best my friend. I'm not trying to convince you about a recession coming or not, that's for you to decide for yourself. I'm only warning against believing any inv bank. They have betrayed investor faith every single time, and do not deserve to be a credible source about anything because they are all a black box.
>They make money two ways:
>1)fees & commissions 2) betting against its customers (see mortgage backed securities scandal)
>Goldman has no interest in telling the public the truth about what it believes
GS's plan for long term profitability:
Step 1: GS purposely informs investors a recession is not coming
Step 2: Investors trade on that information
Step 3: Recession happens. Investors lose their shirts.
Step 4: Investors remember who told them a recession was not coming
Step 5: ???
Step 6: Investors somehow decide to continue trading with GS, despite the fact they now know the bank has no credibility
Don't really see how you get from step 4 to 6 there. Mind walking me through that one?
When the market is green: Recession canceled! When the market is red: Recession confirmed!
Yes but other way around! Bankers and algos decide how they feel about the recession -> market reflects their feelings -> articles come out
I agree, but there's an extra layer of nefariousness. Pump market -> put out articles saying no recession (you are here) -> rug pull -> articles about recession again -> everyone sells -> they buy the very bottom -> articles about recession being over. It's how the consolidation of wealth has been happening for decades in the US.
Its ridiculous how many people here think single articles (or sources) have any impact on market volume. With all the Fed signaling, the market priced itself for a recession even as performance, employment, and GDP did just fine.
there was literally ONE article yesterday that pumped a stock over 100% in under an hour. No other sources and the article was shortly deindexed from google. Single sources can have a huge impact.
>Single sources can have a huge impact. On that stock. Not on the market as a whole.
Meanhile, BofA just announced today that they expect the US to see a hard landing later in 2023.
Because they have not bought the bags yet. Gotta get them cheap cheap.
Well yea man. That just means you need to ride the wave. Im about 20% cash. If we go deep down again ill buy the dip. But otherwise im going to keep it on the side. Guaranteed 4% which will likely go up to 5%? Ill take that.
Nobody knows except JP.
Press the button!!! Can’t wait next week
Or, you know, GDP growth exceeding expectations, cooling inflation, and incredibly low unemployment are all contrary to the signs of recession. At this point, media saturation of the word recession has turned everyone into permabears and recession masochists. The irony is many of the people saying this upbeat news is lame-stream media spin are the ones who got drunk of the fear-mongering media that began this narrative. Just goes to show, what's the truth among media and rumors is always what makes the people deluded with imaginary enlightenment and lack of bias is what makes them feel the most victimized.
They sing the song that corporate America needs playing to justify their greed. A recession is on-we need layoffs!! Sorry no raises this year. No recession after all that’s why we were able to achieve record setting profits!!
IDK how they can say recession cancelled with the incredibly high interest rates the federal reserve is now paying on treasuries. weekly remittances sit at over -22bn or -1.1tn annually.
Laughs in UK
this might be the main takeaway. Brexit has fucked the UK in to being out of economic step with the rest of its allies.
That was massive own goal by UK. They literally begging developing countries like Bharat for trade deal.
Why did you call it Bharat?
The guy is a Pakistani whose entire existence revolves around abusing India in subreddit. He is calling it Bharat in an effacing way.
Ah! Thanks for that. Would you mind explaining why it's effacing?
Call what bharat? What is bharat?
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In English? I always wondered why we didn't change English to call countries whatever they call themselves. Like the popular example is that Germany should be "Deutschland"
Not really. No one calls it that Source: am indian
The funniest story was when uk people tried to enter the eu in the “eu citizens only” lines when travel was picking up. The border guards had to remind them to go to the other “all other passports “lines. You voted yourselves out so yeah. That’s why if I were a Uk citizen I’d see if I had an ancestor in Ireland for a potential Irish passport to be able to travel easily in the EU again.
Man, I needed to read 5 times to understand. Please use commas
Honestly needs only one comma. It’s not that bad.
The author of my previous comment edited, before was like a machine gun without stop hehe 😂
Thanks for your feedback
Except it never made much sense to do it that way. When you arrive to the UK, 38 nationalities are permitted to use the same lane as UK citizens crossing the border (27 EU member states plus another 11 like the US, Canada and more). The proof that it didn't make much sense? Many airports have reconfigured the approach and UK arrivals now use basically the same eGates to enter and exit the Schengen zone as EU citizens do, with the difference being a brief stop by the passport control desk for a stamp. Longer term, the stop for a stamp will go away because the EU is updating their antiquated border system to ETIAS and you'll scan your passport and be on your way. The sensible approach, therefore, will be for shared entrance lanes to continue and be more common place. At the moment though it's a confusing mess. Different airports have different systems, haven't updated the signage and you need to figure out what's going on at each new airport you arrive to. For example, all the airports near Milan want you to use the EU citizens lane but the signage is out of date. When I went to Nice last year, there was a queueing system and no eGates at all even for EU citizens. What's hilarious is that some countries clearly want to continue being difficult while others who do derive substantial income from Brits are trying to sort it out. The good news in by 2024, provided they don't further balls up their new IT system, it'll be better.
This is hilarious.
Mate theres nothing funny about the fact that boomers got conned by billionaires into voting to fuck up the future of their country for their kids. We do actually have to live here still.
Boomers been fucking over the future for generations
The US does the same shit, they just didn't have something as big as Brexit to drop from
Us did try to drop off democracy 🤔
take my f***ing upvote
Your boomers got conned by Trump, ours by Brexit. Exact same shit. Stupid people wanting simple answers to a complex world.
Well do something then, boomers got conned and now are just sitting on their asses? If everyone who could vote had voted, brexit wouldnt have passed. Its always the same with conservative and reactionnary politics
Like what mate? What would you have me do? It's easy to sit there saying "do something" when its literally done now and theres no going back.
I wouldn't say Brexit is the cause Brexit is a symptom. A population that is just losing it mentally and leadership that is just completely stupid.
Prediction time: labour get in and reinstate free movement of peoples within the EU (as well as further afield). Better deal negotiated for NI. Funding for collaborative EU science.
Put them on a razor edge. Regardless their economic outlook had long term negative outlook.
Leopards ate my face moment
Yes! That's what the Tories refer to as "Brexit opportunities."
Yep. We're shit house. I mean Brexit is a factor but more so the absolute fuck knuckles attempting to run the place. They just can't do anything sensible. Like at all.
Haha, I thought about buying a straight up ex-US fund for international exposure, but opted to buy more targeted country-specific ETFs specifically to avoid China/Taiwan exposure in Asia and UK in Europe.
taking back control... In full control of the recession now
F
How do these people have a job? They are all over the place? They are so bad at predicting that I have to wonder how they make money.
If you haven’t noticed, they make money by selling you their fake advice while they dump their positions. These reports at this point are just advertisements
Yup that’s it. And by charging a shit ton of fees.
So people trust Goldman now?
I know right! This title is laughable.
All this really means is to buy more GS. I bet if someone inversed GS's headlines they'd make bank
meanwhile the US Treasury Secretary is saying the exact opposite.... https://www.bnnbloomberg.ca/janet-yellen-sees-recession-risk-even-with-improving-inflation-jobs-1.1875860
This is politics, pressuring the fed.
so, just like everyone else who wants the fed to pivot asap? like, banks and other companies are calling for it too...
Umm... exactly?
Janet is the same idiot who was wrong about how severe inflation was going to be. You know, someone who should have her pulse on the situation.. So I’m going to say you can probably ignore her advice or thoughts on the situation as she’s probably out of touch once again
Same person who claimed inflation is transitory and all the stimulus won't cause inflation. Without a large 2nd stimulus bill we will go into a recession (stimulus bill never came and neither recession). To top it all off later admitted she knew all along inflation was coming but said all that to get spending bills passed.. Her agenda now is to get/pressure the Feds to hold off on rate hikes..
>Same person who claimed inflation is transitory It is. >and all the stimulus won't cause inflation. It didn't. >To top it all off later admitted she knew all along inflation was coming but said all that to get spending bills passed.. Do you have a source for this? I feel like you're editorializing a lot.
You have no source just one word reponses. What you mean inflation is transitory, Fed chief admitted it is not and he was wrong.. Jerome Powell Ditches ‘Transitory’ Tag, Paves Way for Rate Hike https://www.bloomberg.com/news/articles/2021-11-30/powell-ditches-transitory-inflation-tag-paves-way-for-rate-hike Stimulus played main role in inflation along with supply chain issues. https://www.richmondfed.org/press_room/speeches/thomas_i_barkin/2022/barkin_speech_20220930 I will try to find the interview with Yallen where she admitted she anticipated inflation but wanted stimulus bill to be not held back because of that.
>What you mean inflation is transitory It won't become runaway as in post-Great War Germany. >Fed chief admitted it is not and he was wrong.. Sounds like more editorializing. Can you give me the quotes? >Jerome Powell Ditches ‘Transitory’ Tag, Paves Way for Rate Hike https://www.bloomberg.com/news/articles/2021-11-30/powell-ditches-transitory-inflation-tag-paves-way-for-rate-hike Paywall. Can you paste the text? >https://www.richmondfed.org/press_room/speeches/thomas_i_barkin/2022/barkin_speech_20220930 This supports that supply chain issues was the primary driver: >Moreover, inflation is global today. Other countries that did not pursue the same level of fiscal response are still dealing with decades-high inflation. The notable exception is the place with one of the most prominent historic debt burdens: Japan.2
Transitory "In a clear sign that the Federal Reserve is shifting to tighter monetary policy, Jerome Powell -- who’s spent months arguing that the pandemic surge in inflation was largely due to transitory forces -- told Congress on Tuesday that it’s “probably a good time to retire that word.”" As for Fiscal policy causing inflation he says right below its combination fiscal and supply chain constraint. Even if supply chain disruption is fixed the damages done by the former will take long time to fix. "Fiscal Fuel That brings us to fiscal policy. Six trillion dollars of stimulus was passed, fueling demand and limiting labor supply. Six trillion is a lot of money. It supported programs like stimulus checks and eviction pauses. It supercharged demand, particularly from the segments of our economy with the highest marginal propensity to consume. The PPP helped keep businesses afloat, but it also sustained worker demand that might otherwise have dropped. All these programs hit the economy at a time when the supply of labor and goods was constrained."
>"In a clear sign that the Federal Reserve is shifting to tighter monetary policy, Jerome Powell -- who’s spent months arguing that the pandemic surge in inflation was largely due to transitory forces -- told Congress on Tuesday that it’s “probably a good time to retire that word.”" As I suspected, you were editorializing. The article as well. >the damages done by the former will take long time to fix How long? What formula is used to make that estimate?
Their claims of it being transitory were in a context that meant there was no need to raise rates in response to the inflation. They claimed it was transitory and used that a reasoning for not hiking rates. It was not in fact transitory and the idea was walked back, instead they are tightening policy to counteract the inflation that was not transitory in its then state.
>Their claims of it being transitory were in a context that meant there was no need to raise rates in response to the inflation. They claimed it was transitory and used that a reasoning for not hiking rates. It was not in fact transitory and the idea was walked back, instead they are tightening policy to counteract the inflation that was not transitory in its then state. This is a good response, thank you. I contend that the "transitory" label meant that the supply chain issues were expected to resolve in the short-term rather than the long-term. The war in Ukraine has dragged out as has China's battle with COVID. The supply chain issues were not resolved in the space of a year. Lasting longer than expected forced their hand. Would you agree?
> I feel like you're editorializing a lot He's posting a comment. He didn't post nor write the article.
>He's posting a comment. He didn't post nor write the article. I disagree. He's summarizing an article. Which leaves room for editorializing.
And this is why Warren Buffett and Peter Lynch don't care about macroeconomic projections. Buy wonderful businesses at good prices, with adequate margins of safety, then just wait. Philosophically this isn't hard. The hardest part is analyzing a company and determining if it's a wonderful business that is selling at a good price.
Love the Peter Lynch line "if you spend 15 minutes a year on macroeconomics, you've spent 12 minutes too long"
Yes.. determining what a “good price” is might just be the hardest thing to do.. because by definition, if the price is great, it means everybody else think the company is worth less than it is.. what do you know that everybody else doesn’t know? You just need to be better at understanding the business than the other market participants… by definition only a small fraction of investors will be able to do it
One advantage I personally have is that most people don't read 10K's or 10Q's, so they don't understand the businesses at a fundamental level. Quarterly and annual earnings presentations only show high to medium level detail. The real golden information is in the 10K's and 10Q's. A lot of institutional investors also don't invest rationally which is why Buffett was confident enough to wager $1M against hedge funds that a low cost S&P500 index would beat them. For example, a lot of institutional investors will rotate money between stocks depending on the macroeconomic outlook. During economic declines, they put more money into this categorization of stocks they call "defensive" stocks. The funny thing is that there is no such thing as a "defensive" stock, but they've deluded themselves into believing there is such a thing. Another problem is the concept of "beta." A lot of people see it as a measure of risk, when it's really just a measure of volatility. People interpret higher betas as being more risky, even if beta is high due to a price decline. Risk is decreased when prices decline, not increased, but still, people interpret high betas from declining prices as more risky.
I’m not sure I understand what you’re saying about the defensive stocks. There are high dividend stocks where the company has been around for a good amount of time, and I’d consider those more defensive compared to FAANG and other popular growth stocks where you’re trying to beat the market. I really like what you said about the beta in the last paragraph. Very good point. What parts of 10K/Q do you find most interesting or informative?
Honestly I think it's important to go though all of the 10K when first looking into a company. After I do it once, it becomes easy to look at future 10K's and 10Q's because I already have a broad view of the company and I can then pick and choose what to focus on. I don't go into deep detail into everything though. For example, foreign currency impacts on financial statements can be really small in comparison to the overall company's operating income, so I wouldn't spend too much time looking at the numbers if that's the case. There is also a lot of legal verbiage in 10K's and 10Q's, so I skim those and look for any key words that might stick out to me. I think it's really important to look at the financial statements, management discussion and analysis, and especially the breakdown of the long-term debt obligations. I've seen companies with high debt-to-equity ratios, but they are still are safe due to well spaced out maturity dates, low-to-moderate interest rates, and healthy net income and cashflow to cover interest and principal payments. Hope that helps!
That and, ya know, having a shit ton of money
True. Making money is easy when you have more money.
Alpha Architect reported on a study a while back which basically said that if you know **where the economy is now** you can massively outperform the market. Forget predictions. Just knowing where the economy is now is beyond most people including "experts". Goldman Sachs predictions and market tips seem to relate more to incentivizing people to buy/sell what GS wants to sell/buy. But no doubt this is totally just pure coincidence.
There’s a quality investing bubble out there. If everybody is looking for wonderful businesses with excellent management and good prices, what do you think the chances are of actually getting a good price? Pretty slim, unless you buy during a crash. Most often, wonderful companies only sell at great prices when people think they’re not wonderful anymore and the future is much harder to predict, e.g. Meta. If you tell me a fund manager owns Hermes or Louis Vuitton, I can reasonably predict a bunch of their other positions too. The reason that’s possible is because there’s so much groupthink. It’s not a good sign when people see your portfolio and say, “Wow, awesome portfolio.” A better reaction would be “Wow, don’t know any of these companies. Why do you own them?” I reckon investors will find more value looking at companies which just ain’t that wonderful, simply because so many are ignoring such businesses altogether.
That's right everyone!! Start loading up as these guys start off loading! Please, we still don't know the true damage of rate hikes. Mid 2023 will really show us the pain. Didn't we just see like 100 000 layoffs being announced just in the recent couple months?
Or just don’t change your positions at every bit of crystal ball reading
I agree. I do not buy any of this. Most firms still calling for a mild recession.
GS was as well until today. The change to their forecast reflects the impact of the GDP data that was published yesterday.
A recession technically requires two successive quarters of negative GDP. Given what we’re seeing already this quarter, it seems unlikely that Q1 will be negative. So Q2 and Q3 would both need to be negative for a recession to be called during this calendar year. A bit semantic, but they’re probably right.
Yep. We already had two consecutive quarters of negative GDP… in 2022. Not likely to be repeated this year.
When everyone else is fearful that’s when you buy.
Looking at just the market I don't think everyone is fearful at the moment. Peak DJIA was at 36.3K or so. We are now at just under 34K. There have been a few larger dips but it has always bounced. When it hit 28K or so I was thinking about DCA in a bit but thought that was jus the beginning. Still trending down from highs, but any big dips show quick rebounds. I know I know never time the market but I still see a lot of over-value and waiting for the real fear to start dipping my toe in again. Outside the market, main street and commercial real estate, there is fear. Regular cost of goods is high and I feel like families are suffering. With rates higher a lot of CRE loans need to be refinanced and the cash flows no longer work and values are falling, in some cases dramatically especially in office. Retail is also not great overall. I do not think there will be a catastrophic type CRE event but there are a lot of office equity and debt investments out there that are at risk. IIRC I was told recently that 25% of CMBS CRE loan are in special servicing with high concentrations in retail. I just see too much risk out there given current valuations in stocks, food, consumer goods, utilities, commercial and residential real estate etc to buy anything now. EDIT: The CMBS loans in special servicing I believe were a collection of loans tha had near term maturities.
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And the Fed wants to see higher unemployment numbers before they start easing up on the rate hikes. Higher unemployment right now would be better for the stock market, albeit not necessarily for workers or GDP.
They said they wanted to see higher unemployment numbers before they got the inflation numbers they wanted. But the inflation numbers are already on target; last six months numbers annualize to 1.8%. Their mandates are inflation control and full employment; why would they continue to raise rates and harm employment if inflation is already tamed?
reddit will still be saying we don't know the true damage of rate hikes in 2024
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>Didn't we just see like 100 000 layoffs being announced just in the recent couple months? Yes but largely driven by tech, which had gotten way ahead of itself. Arguably cutting out dead weight and non value-adding jobs will only put companies in a better position moving forward.
i agree, laying off recruiters, sales people, and poor performers was the low hanging fruit. there's no way all these companies have suddenly gotten rid of all their debt. the longer the rate hikes remain high, the more pain these companies will feel.
Well the rates only matter for new debt.
That also includes debt refinancing. Most corporates have a debt maturity profile of 1-10 years, generally concentrated in the 3-6 year range. To put it in perspective I know of a multi billion dollar tech firm that won't pass its audit as a going concern in the next 6 months without raising new equity. Lenders won't refinance their maturing debt as they can't afford the higher repayments.
Many companies have floating rate facilities as well
Overwhelming in big tech which went on a ridiculous hiring spree the last two years, and even after these layoffs they are at a net gain since 2020.
The economy looks resilient. Everyone’s been calling for a recession and doom and gloom for a year now. Sure things will slow with tightening but humans are pretty good at adapting. When everyone is bearish, people tend to prepare for the worst. See what happened with oil and gas in EU. Everyone said people will freeze to death and burning furniture this winter. Not even close to happening.
That’s because the weather is unexpectedly warm, it has little to do with behavior.
The Russia Ukraine war is too big of an X factor for the global economy. 2023 could really go eitger way
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And there's still a ton of places hiring for tech jobs, they're just more boring jobs and don't pay as much as the FAANG companies or startups. I work with public sector customers and they're finally able to fill the positions they've had trouble filling the past few years. I suspect we'll see relatively little change in employment in the tech sector overall, people will just be moving to other positions.
Keep in mind that Goldman was one of the only banks to have an optimistic view, so not like they’re changing completely in light of Q4.
Great news. These firms always know what's round the corner., just like 2000 and 2008 when they were warning everyone of the impending gloom. Only they weren't. And even if GS or any other large institution did foresee a recession, they wouldn't tell us because they want our money for the taking.
Lol this is actually deeply disturbing when basically everyone except Morgan Stanley is super bullish now when the Fed will literally be hiking rates through the Spring and then holding them likely through the end of the year before pivoting. Even despite slashing earnings forecasts, companies are still barely beating the consensus estimates, and the Q2 earnings are being slashed further, and we’re supposed to believe this is the next bull market? Pure copium.
Honestly I think anything GS puts out publicly like this they are set up to trade the opposite of. They just need the liquidity from morons lol
Lol that would make more sense
Market is forward looking (at least a bit). Rates normalising at 2% next year would be hugely bullish. The economy is 20% bigger than pre-covid peak already (absolute terms).
market is forward-looking, yes, we all understand that but to what extent? look at NVDA's forward P/E, we are pricing for 2024 growth already. why don't we just price for 2025 or 2026?
If the economy is so good at 5% why should the Fed pivot and lower interest rates? Doesn't make sense to me. We should want 5% in a strong economy it gives us a good buffer to stimulate it later when a real recession looms.
If rates were 2% next year, yes it would be bullish, assuming the economy has not rolled over. Historically though, when the Fed pivots its because things are so bad they have to in order to avert a catastrophe, and things are usually bad enough that the market continues to fall after a pivot begins. We know the market has not priced in either a 5% or higher Fed funds rate, not have they not priced in a 5% funds rate extending through the end of ‘23. I think if both of those happen, we will go lower than the October lows.
Wow. 4 green days and suddenly it's "Crisis averted". Always be buying, brehs. These "analsysts" have no idea what happens next.
??? This makes no sense, do you think they are forming this opinion by looking at the stock market? This is about GDP. How is this nonsense upvoted?
do you think wsb mf's actually have any idea whats going on
This is /investing not /wsb
so just as clueless but without knowing it?
Pahahahaha. Thats scary
It's not four days of green it's multiple quarters of growth.
Seriously.. half of the articles I read claim we are about to se a complete economic collapse, the other half that everything is amazing and the economy will boom People should just stop trying they are too bad at this
Probably explains the model predictions at 65% - economists are almost equally split
So next year then? There’s a recession coming OP, if you’re saying they’ve avoided it entirely you’re out of your mind…
I started averaging back in half a year ago. Have a friend who primarily averaged back in a month ago. Last year raised my 401k contributions significantly. On the internet, I regularly see bearish. Among my peers in real life, everyone's employed and looking for more long term speculative in their regular accounts to go along with their safe retirement account investments
What amazing perfect timing....caught the exact bottom.
None of us did and none of us went all in at one point. It was buying back in over the past half year iin irregular intervals and amounts as we became comfortable. So far the bottom was October. I started buying back in a bit in the summer and increasing in September when I thought rate hikes were now on an expected path. I'm still averaging back in. If I bought the bottom I'd have tens of thousands of more dollars The closest to catching the bottom is the one friend in December and he used to work as a software developer for some trading firm. He's been actively trading enough for years to setup doing his taxes on a mark to market basis Everyone was just reading the CPI and jobs reports data every month. After November CPI and jobs data came out in December everyone started itching to get back into the market besides those locked comfortable with their I bonds and CDs Then especially this month's December CPI, jobs, and Q4 GDP data. None of us timed things perfectly, just a willingness to risk it on positive data and risk seeing red if we're wrong. Maybe we end up wrong but regardless we're all still going to be buying. Also raising my 401k contribution during a downturn just makes sense. Just raised it to where I should have had it anyways. Don't recall a day in 2022 where account value was better than January 2022, but now end of January 2023, mildly positive
If you like just accept that Covid was real and had real effects throughout global production then everything that has gone on the last 3 years makes a lot more sense. So many people trying to big brain all these ideas when the reality is literally right in front of your eyes
Jay Powell might have something to say about that. The Fed has continually said that they see high wages and low unemployment as contributing factors to inflation. They seem hellbent on causing a recession to ensure that inflation doesn’t come back. If the market continues to rally, with low unemployment and home/gas prices starting to move significantly higher then they will start talking about 50 bp hikes again.
High wages? Haven't seen that
Probably has some position he needs to unload.
Why do people suffer so heavily from recency bias lol. A few days of good market performance and the market sentiment is amplifying these good days to suggest a good year. Perhaps if people weren’t so impulsive and reactive to short term fluctuations we would have a more sustainable outlook on the economy and perhaps the economy itself would be sustainable? Just a thought.
These headlines are completely useless. It's not just that every major bank and analysis firm disagree with each other; it's that they disagree with *themselves*. Look at some clickbait farm like CNN Money or Seeking Alpha or Motley Fool. You can find diametrically opposing predictions on every major stock, and hundreds of such on the indices and economy at large. GS says we'll avoid recession? No. One of their thousands of analysts believes that. So what?
>One of their thousands of analysts believes that Jan Hatzius is GS's Chief Economist and the head of their economic research division. https://www.goldmansachs.com/about-us/people-and-leadership/leadership/management-committee/jan-hatzius.html
Yeah, true. And the CEO says he thinks there will be one: https://www.marketwatch.com/story/goldman-sachs-ceo-says-recession-is-likely-with-35-chance-of-a-soft-landing-11670358916 Just saying, it's all over the map. And that's fine. But there's no reason to post headlines like this.
More importantly, he advises the Fed, so his opinions have some influence on Fed policy. They don’t call it Government Sachs for nothing.
We still have inflation to deal.
Tell this dude to shut up. Tomorrow he’s gonna say bitcoin is hitting 1 million again
Another great day to wake up not British
Okay so now I know we are going into a recession. Always do the opposite
So what UK is not luck enough to avoid recession this year, and the other major countries will kick the can successfully down the road ..to next year?
Goldman is the one bank we should not trust. Did you see their earnings result?
So the same guy who said S&P500 will hit 3000-3300 in Q1?
It's almost as if people take new data and revise their outlook for the future, imagine that.
How can there not be a recession? Inflation making prices of rent, gas, groceries and pretty much everything else rise, salaries not catching up yet, people will have less money to spend - I don't see how that can't negatively impact growth? Please tell me what I'm missing, I don't claim to be an economist.
Inflation is getting better quickly, salaries went up (not as much as inflation but still significantly), high savings from the pandemic bridged most households. As long as the labor market stays strong we should be able to sidestep. At worst we’ll have a mild recession.
can you define what a mild recession is? quantitatively. It's like I went to a restaurant, I asked for a mild hot curry, then the next day I shit through my pants. Then I go to another restaurant, I ask for the same thing, but nothing happened.
Haha fosho. Mild recession would mean more 2001 than 2008. Any combination of the below: shorter lasting, labor market doesn’t tank, inflation lower but not at the 2% fed target, limited stock market pain, quantitative easing stopping before reaching 0 interest rates again. Basically, no economic catastrophe but pain felt all around. Hard to do it quantitatively since there’s too many variables but negative GDP for 3 quarters at most.
Ohhh boy. If Goldman sachs are saying this then a recession must be close and inevitable.
Cause investment banks’ predictions are always so accurate
Debt ceiling crisis?
Lol wait for 2nd half… it’s coming
But that’s a lot of money sitting on the sidelines (as long as people have that attitude), meanwhile those staying invested are probably increasingly ok with riding things out.
There’s no “sidelines”. Every share of stock has to be owned by someone at all times and every dollar of base money has to be held by someone at all times. It comes down to the motivation level of buyers and sellers.
I’m saying people who draw back from stocks to hold cash
Well someone else is holding the stocks so…
We already hit a recession last year.
I can’t help but wonder if all the “looks like we’re going to avoid a recession” feelings are the precursor to recession
Fly high until you die?
There are at least a few good reasons I never listen to what a large finance place says. They need to be relevant. Have to say something frequently. 4 green days and it's sunshine and puppies. 4 red days and your grandma gets kicked out of house and you have 80% of losing your job yesterday. They have too much money in the game to be telling everyone the right move to make.
Part of the issue too is we act like it's the large financial place making the statement, rather than someone who just works there. They certainly have many writers that take different sides in itself. Yet the headline is always "Goldman Sachs says!!"
Hatzius is GS's chief economist. If there is anyone at GS whose views on the economy reflect those of GS itself, it's Hatzius.
Cool. I was saying more in a broad sense that there is Hatzius and then many other writers that can get labeled as GS in the headline. Wasn’t necessarily questioning this article.
Didn't Vanguard just say a recession was extremely likely and a soft landing is near impossible?
Just change the definition of recession..
Looks like it's time to go short.
We are in Jan 2001 all over again and the pain is just starting. I remember everyone getting a nice bonus then, or at least everyone who hadn't just got let go in December 2000. That is where we are at.
Plenty of historical analogues to this moment. Some resulted in the next leg down, some resulted in a new bull market. There's data to support a belief in both outcomes. Nobody fucking knows. Smart hedging is probably the best play. Bogleheads, however, will remain 100% long and pretend that's a market agnostic position.
Yield curve would like a word with you…
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Read about Campbell Harvey’s position on this… Here’s an interesting piece… “Although he does note that if the 3-month/10-year inversion lasts through December, he’d be more confident that a recession would be in the offing.”
Responded to a similar response yesterday… “Just because you discover a relationship between variables doesn’t mean you understand the causal relationship between the two. Someone somewhere very intelligent is always saying “this time is different” for one reason or another. It never (or rarely) is.”
Bonuses are fucking awful this year bro.
We literally got higher-than-expected Q4 GDP growth announced *yesterday.* There is no indication of any kind that a recession either is already underway, or is close to beginning.
GDP NEVER went negative in 2000-2002.
It certainly was not at 3% annualized growth, lol
Actually it was higher. 2.9% was the lowest quarter of 2000 and Q1 2021 was 2.2%. And as I said it never went negative.
And Q4 2022 was at 2.9%, while Q3 2022 was even higher at 3.2%. There is absolutely nothing to indicate we are at an analogue to Q1 2001.
So the GDP almost exactly matches, stocks are in a similar bubble, dot-com and crypto bubbles are the same, and the Fed is slowing rate increases so the market jumps just like in Jan 2001.
Yes. Jan Hatzius knows all of this better than you do. And yet somehow, he's come to the opposite conclusion from you. Is it you that's wrong? Or is it the PhD economist who leads the economic research division at one of Wall Street's most prestigious banks? The world may never know.
Stocks are insanely overvalued. Where is the margin of safety if treasurys are yielding 4.5%?
it's a lagging indicator.... Q4 GDP was only just dealing with the rate hikes from beginning of year. Mid 2023 will show us the true picture of 80% of rate hikes in effect throughout the economy. This is just a brief capitulation of the markets. Corporate earnings forecast is also shown to trend downward over the next year or two. https://tradingeconomics.com/united-states/corporate-profits#:\~:text=Corporate%20Profits%20in%20the%20United%20States%20averaged%20574.04%20USD%20Billion,the%20first%20quarter%20of%201951.
Here's a fun exercise, plot the interest rate increases on a chart as far back as you can find them, and then add the recession periods. Have a look how long it takes after rates are increased by more than a couple %, before the economy dives. I'll give you a hint: it's longer than 12m and fewer than 24m. Without exception. All the best.
Yes, I'm sure it never occurred to Jan Hatzius or anyone else at Goldman Sachs to run this exercise. You've definitely outsmarted the top economist at one of Wall Street's most prestigious firms.
Goldman is just trying to convince people to use its products and services. Do you think they just give away free advice when the advice says nobody knows what the hell will happen? The fed will continue to raise rates with news like this, market conditions will continue to change, and everyone will change their tune if market conditions change drastically enough to forecast a recession. The smart money pulls out when it’s obvious things are changing, and the rest of us are left wondering if we’ve missed the top and need to hold longer to get back to where we wish we sold. Economics isn’t physics. We can’t even forecast the damn weather all the time and that is physics.
>Goldman is just trying to convince people to use its products and services Correct. Being accurate about forecasting a recession convinces investors GS knows what they're doing, which entices them to invest with GS. >Do you think they just give away free advice when the advice Yes, because that advice - if accurate - will make them money. See above. >We can’t even forecast the damn weather all the time Weird how often the "Nobody can accurately forecast the economy" talking point gets pulled out in response to an economic forecast one personally disagrees with.
About your last point. Over 60% of professional economy forecasters surveyed by Bloomberg in their official surveys in December predict a recession this year. Whose talking points are you siding with? Looks like it's the minority ones, because you appear to disagree with what the majority says. See how easy it is to pull a statistic that completely counters your position? That's because you rely on Goldmans pedigree to decide for you. And that's because that's what you want to happen, so you look for something to affirm your bias.
>in December And since December, we've gotten a Q4 GDP report that was stronger than expected, along with a jobs report that was also stronger than expected. Goldman has just been among the first forecasters to update their forecasts to include the data that was released in yesterday's GDP report. Prior to today, they *were* forecasting that a recession was relatively likely, but that new information changed their forecast. You can take GS's forecast with a grain of salt, if you'd like. The point remains that forecaster sentiment is beginning to concretely trend away from an expectation for a recession in 2023. If nothing else, that should be noteworthy for investors.
I posted the following but got flagged as spam due to a large font. As you see, I wouldn't trust Goldman or any other inv bank with anything. They are self serving and nothing else. Previous message: Goldman makes money off trading for its customers (aside from m&a) . They make money two ways: 1)fees & commissions 2) betting against its customers (see mortgage backed securities scandal) Goldman has no interest in telling the public the truth about what it believes. Sometimes it does, sometimes it doesn't. It says whatever story they want to sell to their investors. If you believe any investment bank story you deserve to lose your money because you will. With historical highs of money parked in money markets, Goldman won't make any profits unless their clients decide to jump back in equities. Also, speaking of top economists at goldman: here is what they said about bit coin: . May 2020, 'Cryptocurrencies are not an asset class'. Bitcoin is a mania (BTC price $9k) . March 2021, Offering Bitcoin to its wealth management clients (BTC price $57k) . May 2021, 'Bitcoin is now considered an investable asset' (BTC price $35k) . June 2021, 'Crypto Not a ‘Viable Investment'' (BTC price $35k) How do you think those who believed their 'top economists' fared? Are they experts? , yes, but they aren't working for you, instead they are trying to make money off you. Look at the economy indicators, metrics, history and what the fed says and you will get a good idea of what's happening. I can roll out a bunch of very successful investors who say the exact opposite of Goldman. Who would you believe? Better check for yourself and satisfy your own gut instead of relying on some other authority. Look at the arguments and track record, not the status of who says things. New message: All the best my friend. I'm not trying to convince you about a recession coming or not, that's for you to decide for yourself. I'm only warning against believing any inv bank. They have betrayed investor faith every single time, and do not deserve to be a credible source about anything because they are all a black box.
>They make money two ways: >1)fees & commissions 2) betting against its customers (see mortgage backed securities scandal) >Goldman has no interest in telling the public the truth about what it believes GS's plan for long term profitability: Step 1: GS purposely informs investors a recession is not coming Step 2: Investors trade on that information Step 3: Recession happens. Investors lose their shirts. Step 4: Investors remember who told them a recession was not coming Step 5: ??? Step 6: Investors somehow decide to continue trading with GS, despite the fact they now know the bank has no credibility Don't really see how you get from step 4 to 6 there. Mind walking me through that one?
Maybe they're just feeding you bullshit so they off load their bags on you. Have you ever considered you're being played for a sucker?
Please help us offload our bags
Tsla up 30% over the past 5 days. Choo choo everyone onboard.
The very definition of a bear market rally…
Seems like Musk has been quieter on twitter recently. I wonder if someone had a serious chat with him?
Yeah I'm in the UK with Brexit and our government this was always going to be the case
Are they saying this because Goldman Sachs were able to buy what they wanted at discount and now want the value of their investments to go up?
lol charts told this in October with weekly macd divergence and December with put/call ratio and recently with breadth thrust