I vote to call it a Bear Market!

[aja8888]

The way I see it, is if you are counting on an equities "recovery" to fund your retirement future, you really need rethink your plan. Look what happened in Japan.

 

[NW-Bound]

Perhaps with the speed that this market has gone down, the bear bottom will be reached sooner.

I think we all hope for that.

And then, we can all look back and say "See, it's only a correction. I told ya".

 

[El Magnifico Loco]

It is conventional to talk about length of bear markets as the time period of the drop, but easily confusing and not clear that it does not include the time for recovery.

The drops and recovery periods from April 2000 and Oct 2007 were much longer than three years.

Yes. As I recall, we did not truly recover from the 2000 bear until after we experienced the 2007 bear. But I think on average, from peak to peak, it's 3 years.

Another interesting question is whether we are still in a secular bull, or at the beginning of a secular bear.

 

[audreyh1]

Yes. As I recall, we did not truly recover from the 2000 bear until after we experienced the 2007 bear. But I think on average, from peak to peak, it's 3 years.

Another interesting question is whether we are still in a secular bull, or at the beginning of a secular bear.

Just looking at indexes, not counting dividends, the market had finally recovered in Oct 2007, just in time for the next bear!

But if you count in dividends, that shortens it. But when you take into account inflation, its drain is worse than the gains from dividends. They very roughly cancel each other out. Accounting for inflation and dividends the 2000 bear market never recovered and continued into the 2007 bear market, taking another 5 years or more to completely recover.

 

[NW-Bound]

Should I remind everyone why 2000-2010 was called "the Lost Decade"?

Don't you now wish you will get what Bogle suggested for the next 10 years' return?

 

[JoeWras]

My neck is sore from watching the wild swings today. Down 600 intraday and closing up 250. Madness. I don't generally watch, but peaked in at things during breaks from working on my garden.

 

[cyber888]

My neck is sore from watching the wild swings today. Down 600 intraday and closing up 250. Madness. I don't generally watch, but peaked in at things during breaks from working on my garden.

Lol. I saw that .. down 600 red .. then last 15-30 minutes went 200+ green .. low volume trades push it to green. Was that the Plunge Protection Team at work ?[emoji12]

 

[Scrapr]

My neck is sore from watching the wild swings today. Down 600 intraday and closing up 250. Madness. I don't generally watch, but peaked in at things during breaks from working on my garden.

Roll on Bull market roll on

 

[NW-Bound]

My neck is sore from watching the wild swings today. Down 600 intraday and closing up 250. Madness. I don't generally watch, but peaked in at things during breaks from working on my garden.

I watched the market a bit in the morning, wrote 3 out-of-the-money covered calls on some stocks that were green while the market was red. Then, got tired of seeing everything going down, so went out to the backyard to do some work.

Needed to run to Home Depot for some "stuff". Stopped by my laptop to check on the market about 1/2 hour before close. Nice!

Lol. I saw that .. down 600 red .. then last 15-30 minutes went 200+ green .. low volume trades push it to green. Was that the Plunge Protection Team at work ?[emoji12]

The market declined until 1.5 hrs before close, then it started to turn around.

Total volume of the day was indeed lower than the daily average, but most of the trades were during the last hour and trading stayed heavy until close.

 

[ShokWaveRider]

The "Day" traders are taking advantage of the swings.

 

[NW-Bound]

Well, I do not care who is buying, as long as there's somebody buying, and buys a lot.

 

[Dtail]

The "Day" traders are taking advantage of the swings.

The Wall Street hedge fund firms who have "Program trading" algorithms set up, are probably cleaning up.

 

[TravelinFamilyMan]

-1. Not yet!!!

 

[Scarab]

-1 Reminds me of when the wife waits for a Kohl's sale, and she has a handful of % off stackable coupons, and Kohl's cash. Buying along the way.

 

[VanWinkle]

-1 Reminds me of when the wife waits for a Kohl's sale, and she has a handful of % off stackable coupons, and Kohl's cash. Buying along the way.

That Kohl's cash has cost us more money than it ever saved.

 

[REWahoo]

That Kohl's cash has cost us more money than it ever saved.

Khol's Cash = thinly disguised Crack Cocaine

 

[VanWinkle]

Khol's Cash = thinly disguised Crack Cocaine

 

[Scarab]

That Kohl's cash has cost us more money than it ever saved.

LOL!!

 

[NW-Bound]

I am proud of my wife. She went in, found something that she liked and her receipt showed excess of $1 or $2 above that free cash.

I was there with her, and it made me feel guilty. But I think they figure it out, and I have not seen a coupon in the mail recently.

 

[Closet_Gamer]

Just looking at indexes, not counting dividends, the market had finally recovered in Oct 2007, just in time for the next bear!

But if you count in dividends, that shortens it. But when you take into account inflation, its drain is worse than the gains from dividends. They very roughly cancel each other out. Accounting for inflation and dividends the 2000 bear market never recovered and continued into the 2007 bear market, taking another 5 years or more to completely recover.

A few years back, I read an article that said the Fed's various QE policies to drive down rates essentially amounted to price fixing the most important financial assets on the planet -- US Treasury bonds -- because virtually everything else finds its value as a risk premium relative to that risk-free return.

The fed used its limitless balance sheet to wrestle control away from the market on the price of treasuries and thereby removed from the market a very important pricing mechanism for everything else. Obviously, the fed always nudges these things via its rate actions, but QE was an entirely different beast.

I found that to be an interesting way of looking at it.

If you concur that's what happened, we should be prepared for a very out-of-the-ordinary market (up/down) as the Fed unwinds QE and allows the market to once again have more of a voice in setting the price of Treasuries and other assets. It took a decade (perhaps 2 decades to Audrey's point) in order to get here. The odds that this gets unwound in 36 months is shockingly low.

 

[El Magnifico Loco]

Agreed. I too doubt the Fed will unwind their balance sheet anytime soon. As soon as there is a hint of an economic slowdown, I believe they will stop and, depending upon the slowdown's severity, increase their holdings again.

Does anyone know how the US Fed's holdings compare to the ECB's, particularly as a % of GDP?

 

[audreyh1]

A few years back, I read an article that said the Fed's various QE policies to drive down rates essentially amounted to price fixing the most important financial assets on the planet -- US Treasury bonds -- because virtually everything else finds its value as a risk premium relative to that risk-free return.

The fed used its limitless balance sheet to wrestle control away from the market on the price of treasuries and thereby removed from the market a very important pricing mechanism for everything else. Obviously, the fed always nudges these things via its rate actions, but QE was an entirely different beast.

I found that to be an interesting way of looking at it.

If you concur that's what happened, we should be prepared for a very out-of-the-ordinary market (up/down) as the Fed unwinds QE and allows the market to once again have more of a voice in setting the price of Treasuries and other assets. It took a decade (perhaps 2 decades to Audrey's point) in order to get here. The odds that this gets unwound in 36 months is shockingly low.

Well the QE that’s unwinding now was started in 2013, so it really hasn’t been that long. Plus the asset inflation that happened as a result also occurred in 2013 onwards. Unwind a few years gains and/or go sideways for a few years and we are probably back on track. Having interest rates at higher levels is a big part forcing return to less inflated asset levels.

 

[FinancialDave]

I changed my avatar when I saw this thread. Maybe this is a "Teddy Bear Market"? At least, so far. I agree with others that it's probably not a full fledged Bear Market quite yet.

TBH I expect it to get much worse before long, but then what do I know about it?
(answer: absolutely nothing).

I agree

 

[jimbee]

Good gosh! I had no idea until reading your post. Yes, I think it's gone from a Teddy bear market to a bear market by now.

This bear may be more applicable than a Teddy bear.

 

[SecondCor521]

Agreed. I too doubt the Fed will unwind their balance sheet anytime soon. As soon as there is a hint of an economic slowdown, I believe they will stop and, depending upon the slowdown's severity, increase their holdings again.

Does anyone know how the US Fed's holdings compare to the ECB's, particularly as a % of GDP?

US Fed balance sheet is basically $4T and falling on a GDP of $19.8T. ECB balance sheet is euro4.5T and rising on euro16.4T of GDP.

That's on a quick couple of google searches, so the recency and quality of the data points may vary.