OT - Dow plunges 1,175 - worst point decline in history

[MattTuck]

Originally Posted by zap

https://www.reuters.com/article/us-i...-idUSKCN1NI28P

So, the guy who works for PIMCO, with 1.7 Trillion Assets Under Management, that makes money based on the amount of assets under management, is concerned that rates might rise too fast, and depress asset prices, and thus decrease the AUM of his employer? big surprise!

Talk about conflicts of interest. That's like asking a guy who owns his house whether he thinks it is good or bad for his house to decrease in value.

While I am sympathetic to this rich guy's plight, I'm not sure what else the fed is supposed to do? Continue to keep rates artificially low on the premise that we're still in emergency conditions, remain the great enabler of fiscal profligacy, permanently hold on to their bloated balance sheet of questionable assets?

It is time to get on with it already. Cut the apron strings and let the economy float on its own. There are deep structural fissures with the economy and the fed is, at best, holding it together with band aid solutions. If we have a slow down, it isn't because the fed was 6 months early, or raised by an extra 25 basis points. It will be because people can look down the road more than 6 months and see that deep structural reforms are needed, and no one is in the wheelhouse to make them.

[zap]

Its complicated...but when was the last time the economy floated on it's own

Time will tell how things shake out.

[kevinvc]

New construction projects are slowing significantly, wage growth is still flat, personal and corporate debt are rising... lots of signs pointing to an economic slowdown / recession.

The fed has kept interest rates low since the last bust and throughout the apex of the current recovery / boom. When this bubble pops, that is a major tool that will not be available to mitigate the impact and move towards recovery.

I'm concerned that this next drop may not be as severe as the one that started at the end of 2007, but it may be a lot more difficult to pull out of it.

[likebikes]

rollercoaster ride today.

[kevinvc]

What's the big deal about an 800 point / 3.1% drop? Tariffs are going to bring back all those manufacturing jobs eventually, right?

[wc1934]

Originally Posted by kevinvc

What's the big deal about an 800 point / 3.1% drop? Tariffs are going to bring back all those manufacturing jobs eventually, right?

'I am a tariffs man'.

[kevinvc]

Originally Posted by wc1934

'I am a tariffs man'.

Worst superhero ever

[joosttx]

Originally Posted by kevinvc

What's the big deal about an 800 point / 3.1% drop? Tariffs are going to bring back all those manufacturing jobs eventually, right?

I think that graph which showed the decoupling of corporate earning and wages illustrates that jobs/wages and stock price are not positively correlated. So the question is do you want to keep middle class retirees and Muni's with pension funds out of the poor house or let the next generations make some dough?

[cloudguy]

Originally Posted by joosttx

I think that graph which showed the decoupling of corporate earning and wages illustrates that jobs/wages and stock price are not positively correlated. So the question is do you want to keep middle class retirees and Muni's with pension funds out of the poor house or let the next generations make some dough?

Unfortunately, there's been another disturbing decoupling that has emerged more recently, as well.

https://www.washingtonpost.com/news/...=.f358b2200f91

[joosttx]

Originally Posted by cloudguy

Unfortunately, there's been another disturbing decoupling that has emerged more recently, as well.

https://www.washingtonpost.com/news/...=.f358b2200f91

tariffs should help.

I think part of this is what I mention above and the other is the labor force is smaller. Still troubling.

[54ny77]

would be interesting if the author of those fun scatterplots and data visualization is using pure unemployment figures or making some assumption/adjuster for underemployment.

i'd argue there's a great many people out there, at various socioeconomic levels, who are unemployed but not statistically accounted for in that regard. they've exited the labor marketplace at some point in past several years and just never got back into it.

that's had a profound impact in certain industries and regional areas.

Originally Posted by cloudguy

Unfortunately, there's been another disturbing decoupling that has emerged more recently, as well.

https://www.washingtonpost.com/news/...=.f358b2200f91

[verticaldoug]

https://www.scmp.com/economy/china-e...y-out-concrete

The other point of view from probably the most neutral paper in the region.

[oldpotatoe]

Originally Posted by wc1934

'I am a tariffs man'.

yeegads..slow learner...words matter....

[el cheapo]

So let's say the laws of reversion to the mean are in effect and our government has allowed for pensions to be swapped for 401k's potentially setting up a 1929 disaster if the stock market falls. Maybe those wacko survivalists aren't so crazy after all.

[zap]

edit

Originally Posted by 54ny77

i'd argue there's a great many people out there, at various socioeconomic levels, who are unemployed but not statistically accounted for in that regard. they've exited the labor marketplace at some point in past several years and just never got back into it.

U3 is reported widely.

U4-6 listed here https://www.bls.gov/news.release/empsit.t15.htm

There is also labour participation rate which remains low. https://data.bls.gov/timeseries/lns11300000