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Off-Topic Stock Market & Crypto Discussion

Fitch Ratings downgraded its US debt rating on Tuesday from the highest AAA rating to AA+, citing “a steady deterioration in standards of governance.” The downgrade comes after lawmakers negotiated up until the last minute on a debt ceiling deal earlier this year, risking the nation's first default.
 
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08:30USDContinuing Jobless Claims(Jul 21)1.7M01.7M1.679M
08:30USDInitial Jobless Claims(Jul 28)227K0227K221K
08:30USDInitial Jobless Claims 4-week average(Jul 28)228.25K--233.75K
08:30USDNonfarm Productivity(Q2) PREL3.7% 2.632%-1.2%
08:30USDUnit Labor Costs(Q2) PREL1.6% -0.842.6%3.3%
Jobless claims up slightly
productivity up and unit labor costs down shows inflation is dropping…Goldilocks
 
mr.h said:
Fitch Ratings downgraded its US debt rating on Tuesday from the highest AAA rating to AA+, citing “a steady deterioration in standards of governance.” The downgrade comes after lawmakers negotiated up until the last minute on a debt ceiling deal earlier this year, risking the nation's first default.
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Share the whole picture.

Ratings Downgrade: The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.
 
When was the last time the FED landed softly?

I could see a spiral of equities, crypto, and real estate as consumers try to find cash. When/if this happens, it could get ugly quickly as most households don’t have much savings. It will take 12-18 months for real estate to see massive foreclosures and I’d expect the FED to have pivoted by then. Thus, equities and crypto would get hit harder because they are more liquid.
 
JD08 said:
Share the whole picture.

Ratings Downgrade: The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.
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Every financial CEO is saying that this means nothing.
I‘ll list them to you if you want.
 
mr.h said:
Every financial CEO is saying that this means nothing.
I‘ll list them to you if you want.
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First, if it means nothing, why do you keep beating the debt ceiling drum?

Second, I was just pointing out the debt ceiling standoffs were only a part of their reason.
 
09:45USDS&P Global Composite PMI(Jul) 5205252
09:45USDS&P Global Services PMI(Jul) 52.3-0.0852.452.4
10:00USDFactory Orders (MoM)(Jun)
2.3% 0.412.2% 0.4%
10:00USDISM Services Employment Index(Jul) 50.7-0.1851.153.1
10:00USDISM Services New Orders Index(Jul) 55-0.1955.655.5
10:00USDISM Services PMI(Jul) 52.7-0.155353.9
10:00USDISM Services Prices Paid(Jul) 56.81.9052.154.1

factory orders up
ISM numbers at or near expectations
any result above 50 is bullish..
 
mr.h said:
The first one is a 2019 article. The second article say the path is unsustainable, which I agree.
I believe we will see interest rates lower in mid 2004, especially if we have more rate hikes In 2023 and I believe the economy can handle it. I don’t believe the Fed will drive us into a recession and it’s an election year.
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That was the point to including it, Powell was already warning about the deficit when it was half what it is now.
 
SpikeUM said:
That was the point to including it, Powell was already warning about the deficit when it was half what it is now.
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I agree.
Funny that Powell did nothing about interest rates until 2022. Did lower interest rates allow the government to spend more because of the cost of borrowing?
 
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mr.h said:
I agree.
Funny that Powell did nothing about interest rates until 2022. Did lower interest rates allow the government to spend more because of the cost of borrowing?
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As if Powell has a gun to the head of Congress telling them to over spend!

Powell's job is to make sure inflation runs at around 2% or less along with keeping unemployment as low as possible without letting inflation run hot. Are you expecting Powell to increase rates while unemployment is high in 2020?
 
Bank failures: truly 5 have happened but the Banc of California and PacWest merger covers up the PacWest failure.
Oct 1, student loan payments hit and this group apparently accounts for 40% of consumer spending.
ERC ends April 2024 for 2020 and April 2025 for 2021- 30B/month or 400B/yr!

I feel like I'm on the shore looking out to sea. The weather looks really bad but the weatherman said it was going to be a great day for fishing. Do I trust my eyes or the weatherman?
 
90scane said:
Bank failures: truly 5 have happened but the Banc of California and PacWest merger covers up the PacWest failure.
Oct 1, student loan payments hit and this group apparently accounts for 40% of consumer spending.
ERC ends April 2024 for 2020 and April 2025 for 2021- 30B/month or 400B/yr!

I feel like I'm on the shore looking out to sea. The weather looks really bad but the weatherman said it was going to be a great day for fishing. Do I trust my eyes or the weatherman?
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This is not 2007.
 
TheEye said:
This is not 2007.
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Yeah, I'm not expecting residential real estate to cause bank failures. I do expect CRE to cause some additional bank failures. I do expect bank failures to cause liquidity problems for all sectors. Combine that with the end of student loan forgiveness, the end of ERC, higher rates, high energy costs...
 
90scane said:
Yeah, I'm not expecting residential real estate to cause bank failures. I do expect CRE to cause some additional bank failures. I do expect bank failures to cause liquidity problems for all sectors. Combine that with the end of student loan forgiveness, the end of ERC, higher rates, high energy costs...
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Expect it to be spread out over a much longer time frame than events of the past.
 
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90scane said:
When was the last time the FED landed softly?

I could see a spiral of equities, crypto, and real estate as consumers try to find cash. When/if this happens, it could get ugly quickly as most households don’t have much savings. It will take 12-18 months for real estate to see massive foreclosures and I’d expect the FED to have pivoted by then. Thus, equities and crypto would get hit harder because they are more liquid.
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Its possible, but there is still a lot of cash in the system, and PE has record amounts of cash available, so whatever happens might be sharp, but relatively short lived.
 
90scane said:
When was the last time the FED landed softly?
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In 2008 the Prime rate was so low the introduction of Quantitative Easing occurred. So the precedent doesn’t go very far back. Just because it hasn’t happened doesn’t mean it won’t. I wouldn’t be surprised to see more QT in the future. I am amazed at how many people thought restoring the Prime rate back to historic norms could only end in disaster.

As bad as the US budget deficit is, we are doing quite well compared to the rest of the world. If the voter base wants to elect a fiscally responsible president, then we will see a change but I don’t foresee that happening until the problem hits people right in the wallet.
 
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