Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
But the stock market is not the economy.
Duh You got my point!
But the stock market is not the economy.
Interesting article in NYT on the 2 consecutive quarter definition. I hope that the link works: https://www.nytimes.com/2022/07/26/...te=1&user_id=b685681543a24c3adaf2b160d24a744d
Paywalled for me.
IOW: "Blah, blah, blah, blah, blah. We'll let you know if you are in a recession. Trust us! We're very important and have all the answers. You don't know anything. Don't trust your lyin' eyes."
But, of course, YMMV
I have no idea if we are in a recession. And, ever since I can remember the definition of a recession has been two straight quarters of negative economic growth. I don't recall anybody questioning this definition in the public. There were times when the statistical work to get the growth rate has been questioned - "Let's wait until we have the final numbers on widget production for June." Or the seriousness of the recession was very mild. Like many other things in life, the dosage dictates how poisoness something is.
Never heard of them. Are you sure you got the right end of the horse, there?
IOW: "Blah, blah, blah, blah, blah. We'll let you know if you are in a recession. Trust us! We're very important and have all the answers. You don't know anything. Don't trust your lyin' eyes."
But, of course, YMMV
Paywalled for me.
If the stock market is a leading economic indicator, the 3 major indices are up 10% to 13% in the last 2 weeks! And at least opening on the upside today.
but, the stock market is not an economic indicator.
However, is it a leading economic indicator in the sense that market prices equal discounted expected future cash flows, so an increase in prices implies that investors see improved cash flows (that is, better future economic conditions) relative to prior expectations? OTOH, improving market prices may reflect a lower discount rate, which is consistent with the recent decline in longer-term treasury yields. ...
In high theory perhaps, but not in reality. Stock prices are more supply and demand. Do you seriously think that Gamestop stock price is based on discounted cash flows? Or any of the other crazy high P/E stocks.. nah.. supply and demand and greater foolstuff.
I just watched a set of 3 or 4 talking heads saying there was no recession 'cause the definition is NOT 2 quarters of declining GDP. This was followed by a retrospective of these same talking heads (recorded during previous recessions) when each said the definition of a recession was "Definitely" two consecutive quarters of declining GDP. Cha CHING!
In high theory perhaps, but not in reality. Stock prices are more supply and demand. Do you seriously think that Gamestop stock price is based on discounted cash flows? Or any of the other crazy high P/E stocks.. nah.. supply and demand and greater foolstuff.
Sorry, I wasn't sure if it would work since I'm a subscriber. Try this one... I'm suppose to be able to share 10 articles a month and I "think" this link will work:
https://www.nytimes.com/2022/07/26/...bFqB3k29PabXorLdTKEcuWB703UPfK&smid=url-share
Thank you, that worked.
Mr. Krugman and I don't see eye to eye on a number of things, but I think he's very smart and articulate and interesting to read.
And it's even worse when you look at real world inflation vs. the lower government figures. I hear that income is up, yet it's actually down when factoring in inflation, and that's even using the government inflation figures, which make it seem better than reality.All of these pundits are largely saying the reason for no recession now is job market is still good. However, inflation is running 3%+ higher than income growth is currently, which is the equivalent of unemployment rate jumping quite a bit (~3% to 6.5%) and incomes growing in line with inflation, which is more typical of a normal recession.
I'm pretty sure that wherever it was reported that income was up that it was also indicated that it was nominal income and not real income.
Personal income increased $133.5 billion (0.6 percent) in June, according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased $120.4 billion (0.7 percent) and personal consumption expenditures (PCE) increased $181.1 billion (1.1 percent).
The PCE price index increased 1.0 percent. Excluding food and energy, the PCE price index increased 0.6 percent (table 9). Real DPI decreased 0.3 percent in June and real PCE increased 0.1 percent; goods increased 0.1 percent and services increased 0.1 percent (tables 5 and 7).
In high theory perhaps, but not in reality. Stock prices are more supply and demand. Do you seriously think that Gamestop stock price is based on discounted cash flows? Or any of the other crazy high P/E stocks.. nah.. supply and demand and greater foolstuff.
Wrong, that is absolutely NOT the case.And just what is the authoratitive source for your "real world inflation"? Or is "real world inflation" anecdotal based on GenXguy's experience and view of the world?
I'm pretty sure that wherever it was reported that income was up that it was also indicated that it was nominal income and not real income.
The theory has been decoupled due to the Fed's loose monetary polices for the past two decades. As the easy money dries up for these companies and the general public, stock fundamentals like DCF, PE, will come back into play.