[2020] A little stock market sense

[DrQ]

That is exactly the "shock" headline that I was talking about. It sounds so scary to "top $1 trillion for the first time ever", but it means absolutely nothing if you don't take into account inflation and population growth. And the huge percentage jumps mentioned in your clip are based off of the artificial lows during the pandemic.

I would take that article with a huge grain of salt -- it is just meant to get hits.

Kurt

As you can see, I highlighted the meat of the article: Increasing monthly balances, increasing delinquencies both as a percentage.

Mote -> log syndrome

 

[WaikikiFirst]

The stock market over the last few days indicates that concern is mostly growing about the Fed's penchant for "higher for longer" and inflation. Just ?yesterday? the Fed released a transcript that showed they had UPGRADED their view of the US economy recently. Stronger economic view by the Fed is the perverse concern ... for whatever tea leaves are worth

 

[Superchief]

Is it really a "recession" in the freight industry when prices are just returning back closer to normal after the unprecedented Pandemic price increases? Seems like it should be categorized as a bubble popping vs. a "recession".

Kurt

Yellow Freight's bankruptcy will disrupt the industry for a while. There are a lot of reasons behind it, but some other companies are also vulnerable. I have friends in the logistics industry who are currently working long hours dealing with some of the disruptions caused by YF.

Yellow is shutting down after 99 years. Here's what happened.

The trucking company, once one of the U.S.' largest, will cease operations amid battle with union and struggles to pay debts.

www.cbsnews.com

 

[PigsDad]

As you can see, I highlighted the meat of the article: Increasing monthly balances, increasing delinquencies both as a percentage.

Yes, but those comparisons are against the unprecedented pandemic lows. I'm not disagreeing that consumer debt is up, but comparing to those pandemic lows is not necessarily the best measure.

Kurt

 

[Superchief]

Yes, but those comparisons are against the unprecedented pandemic lows. I'm not disagreeing that consumer debt is up, but comparing to those pandemic lows is not necessarily the best measure.

Kurt

This is similar to comparing employment levels to pandemic lows rather than pre-pandemic figures.

 

[Ironwood]

Watch out for China's economic slump! The Global spillover could be significant.

 

[HitchHiker71]

Watch out for China's economic slump! The Global spillover could be significant.

Given how export dependent China's economy still is - as onshoring efforts accelerate globally and globalism goes out of style - expect more headwinds for China - not less. This is partly why China's economy is starting to fray from what I have read. For example, two years ago - there were two battery manufacturing plants in the US. Here's the tracking list today from one of the YT BEV news outlets I consume:

There are now over 50 battery manufacturing and assembly plants under construction or operational as of today. Onshoring is taking hold across multiple industries in a similar fashion.

 

[easyrider]

Given how export dependent China's economy still is - as onshoring efforts accelerate globally and globalism goes out of style - expect more headwinds for China - not less. This is partly why China's economy is starting to fray from what I have read. For example, two years ago - there were two battery manufacturing plants in the US. Here's the tracking list today from one of the YT BEV news outlets I consume:

View attachment 80338

There are now over 50 battery manufacturing and assembly plants under construction or operational as of today. Onshoring is taking hold across multiple industries in a similar fashion.

I read that they expect a lithium bottleneck in the supply chain as early as next year. The main concern is lithium mining not keeping up with demand. It could be smoke and mirrors to drive lithium prices higher, idk and idc. It will be interesting to see how this plays out especially with all of the jobs these create. My bet is it will be good for the economy and what's good for the economy is good for the markets.

Bill

 

[billymach4]

Fuhgetaboudit

 

[DrQ]

Wall Street Bet Big on Used-Car Loans for Years. Now a Crisis May Be Looming.​

The used-car market’s hot streak may be ending as borrowers struggle to make payments and regulators say some auto lenders are “setting up consumers to fail.”​

Wall Street Bet Big on Used-Car Loans for Years. Now a Crisis May Be Looming.

The used-car market’s hot streak may be ending as borrowers struggle to make payments and regulators say some auto lenders are “setting up consumers to fail.”

www.propublica.org

 

[easyrider]

Look out !!! Things are shaping into a mess. Maybe Friday or Monday.

Bill

The collapse in Treasury bonds now ranks among the worst market crashes in history

Investors have been fleeing the bond market, causing long-dated bonds to lose 46% since March 2020, Bloomberg reported.

markets.businessinsider.com

 

[Brett]

Look out !!! Things are shaping into a mess. Maybe Friday or Monday.

Bill

The collapse in Treasury bonds now ranks among the worst market crashes in history

Investors have been fleeing the bond market, causing long-dated bonds to lose 46% since March 2020, Bloomberg reported.

markets.businessinsider.com

The stock market probably won't collapse this week

The labor market showed continued resiliency in September, adding 336,000 jobs last month
https://www.wsj.com/economy/jobs/jobs-report-september-economy-unemployment-d9409b8b

 

[Superchief]

I've given up on figuring out the stock market. It's been down a lot in the past two weeks and who knows what it will do next. It seems to be impacted most by Fed actions. The Fed recently indicated it will raise rates again if the target inflation rate of 2% isn't reached. I don't see how that is achievable under current conditions. The uncertainty of the spending cap is also a factor. I'm not optimistic at this point.

 

[Brett]

The Economy’s Secret Weapon: Seniors With Money to Spend
Americans 65 and older account for record share of spending and are less susceptible to interest rates
https://www.wsj.com/economy/consumers/us-economy-seniors-spending-money-d9f529c5


"Why has consumer spending proven so resilient as the Federal Reserve has raised interest rates?
An important and little-appreciated reason: Consumers are getting older.

The elderly a spending force to be reckoned with. Americans age 65 and up accounted for 22% of spending last year, the highest share since records began in 1972 and up from 15% in 2010

Seniors’ high spending propensities reflect health, wealth and perhaps lingering psychological effects of the pandemic.

“All my life it was, save for this, save for that,” said Maureen Green, 66, of Cape Cod, Mass. “Now there’s money in the bank and I’m spending in ways that bring me closer to friends and family than I did before.”

Another factor in the elderly’s favor: relatively strong finances. Americans age 70 and older now hold nearly 26% of household wealth, the highest since records began in 1989, according to the Federal Reserve.

Living better, longer—and larger - “The lifestyle of the senior has changed dramatically—they’re more active than ever,

American Cruise Lines, which gears its cruises toward older consumers, said it is seeing double-digit sales growth this year, driven largely by boomers. "

 

[DrQ]

Fall of the zombies? Why corporate failures could surge in 2024​

Fall of the zombies? Why corporate failures could surge in 2024

Debt-laden companies across Europe, Middle East and Africa face a $500 billion refinancing scramble, a challenge that could kill off many of them if they fail to get the cash they need at rates they can afford.

www.reuters.com

The rise of the MEGA bankruptcy: 459 US firms have filed for bankruptcy this year - the most since 2020 - and 16 had more than $1 billion in assets​

• Economists warn large-scale bankruptcies can have devastating consequences
• Some 459 firms filed for bankruptcy so far this year - already more than in 2021
• Bed Bath and Beyond, trucking firm Yellow and Silicon Valley Bank among the biggest casualties

459 US firms have filed for bankruptcy this year, new figures show

Large-scale corporate bankruptcies are at their highest level since 2020 as elevated interest rates continue to batter businesses.

www.dailymail.co.uk

 

[easyrider]

The stock market probably won't collapse this week

The labor market showed continued resiliency in September, adding 336,000 jobs last month
https://www.wsj.com/economy/jobs/jobs-report-september-economy-unemployment-d9409b8b

That news and the plunge protection team seemed to have temporarily avert matters. Because of the new war the market should be ok ? Some one said when missiles fly it's time to buy and I wonder how that plays out with all of the other global happenings ?

Bill

 

[easyrider]

Did anyone see that Microsoft was audited and was asked to pay 29 billion ? They are appealing.

Bill

https://www.cnn.com/2023/10/11/tech/microsoft-irs-back-taxes/index.html?utm_source=optzlynewmarketribbon

 

[CO skier]

The Economy’s Secret Weapon: Seniors With Money to Spend
Americans 65 and older account for record share of spending and are less susceptible to interest rates
https://www.wsj.com/economy/consumers/us-economy-seniors-spending-money-d9f529c5


The elderly a spending force to be reckoned with. Americans age 65 and up accounted for 22% of spending last year, the highest share since records began in 1972 and up from 15% in 2010

Seniors’ high spending propensities reflect health, wealth and perhaps lingering psychological effects of the pandemic.

That is not the story of this Senior.

The airlines are not getting $50,000+/year now that I have retired. Two years after my retirement, the company has still not found a replacement, and may not, considering my skill set and the lack of skills/motivation of "millenials" and generations following them. Sales will continue to suffer, and that may eventually lead to downsizing in addition to no one replacing me and the related business expenses continuing at $0/year.

I started tracking my personal spending. $600+ per month just on groceries is now $350 or less. Dining out with inflation, plus 17% taxes, plus 18% tip ... fuhgeddaboudit. My $1,500/month business dining expenses plus $600/vacation dining out has gone to zero -- (less than $100/vacation needed at the grocery store to replace that $600 restaurant bill). Thanks to my personal spending tracking, my monthly fast food expenses are reduced by 50%, and I do not miss it. (That, alone, may explain the decline in McDonald's stock price over the last year. )

So, caveat, this is one cheapskate "elderly" data point whose spending "adjustments" in retirement would bankrupt the restaurant industry (but not McDonald's) and send the economy into a Depression. Difficult to believe I am some kind of exception and there is, instead, some kind of Secret Weapon "Senior" ATM out there. Sure, there are some Seniors who might spend more money after retirement than before ... but that is definitely the rare exception.

 

[Superchief]

That is not the story of this Senior.

The airlines are not getting $50,000+/year now that I have retired. Two years after my retirement, the company has still not found a replacement, and may not, considering my skill set and the lack of skills/motivation of "millenials" and generations following them. Sales will continue to suffer, and that may eventually lead to downsizing in addition to no one replacing me and the related business expenses continuing at $0/year.

I started tracking my personal spending. $600+ per month just on groceries is now $350 or less. Dining out with inflation, plus 17% taxes, plus 18% tip ... fuhgeddaboudit. My $1,500/month business dining expenses plus $600/vacation dining out has gone to zero -- (less than $100/vacation needed at the grocery store to replace that $600 restaurant bill). Thanks to my personal spending tracking, my monthly fast food expenses are reduced by 50%, and I do not miss it. (That, alone, may explain the decline in McDonald's stock price over the last year. )

So, caveat, this is one cheapskate "elderly" data point whose spending "adjustments" in retirement would bankrupt the restaurant industry (but not McDonald's) and send the economy into a Depression. Difficult to believe I am some kind of exception and there is, instead, some kind of Secret Weapon "Senior" ATM out there. Sure, there are some Seniors who might spend more money after retirement than before ... but that is definitely the rare exception.

i'm totally with you. Now if I can only get my 2 boomerang adult daughters and wife to track spending like you and I do.

 

[Brett]

That is not the story of this Senior.

The airlines are not getting $50,000+/year now that I have retired. Two years after my retirement, the company has still not found a replacement, and may not, considering my skill set and the lack of skills/motivation of "millenials" and generations following them. Sales will continue to suffer, and that may eventually lead to downsizing in addition to no one replacing me and the related business expenses continuing at $0/year.

I started tracking my personal spending. $600+ per month just on groceries is now $350 or less. Dining out with inflation, plus 17% taxes, plus 18% tip ... fuhgeddaboudit. My $1,500/month business dining expenses plus $600/vacation dining out has gone to zero -- (less than $100/vacation needed at the grocery store to replace that $600 restaurant bill). Thanks to my personal spending tracking, my monthly fast food expenses are reduced by 50%, and I do not miss it. (That, alone, may explain the decline in McDonald's stock price over the last year. )

So, caveat, this is one cheapskate "elderly" data point whose spending "adjustments" in retirement would bankrupt the restaurant industry (but not McDonald's) and send the economy into a Depression. Difficult to believe I am some kind of exception and there is, instead, some kind of Secret Weapon "Senior" ATM out there. Sure, there are some Seniors who might spend more money after retirement than before ... but that is definitely the rare exception.

OK
Fortunately I am part of those senior demographics. I slowly accumulated investments during the past 40 years with good returns (and I was frugal)
I'm now spending more in retirement than at any other time and it feels good. Probably more the result of luck than skill !

 

[easyrider]

I'm not a senior yet but I think our senior spending will be about the same or a bit more as it is now. Some of my retired friends have bought alot of things so the article is true for some people.

Bill

 

[artringwald]

We definitely spend more on discretionary expenses (like vacations) in retirement because the mortgage and cars are all paid off. With pension and social security checks coming in as long as we keep breathing, we do manage not to spend too much more than what's coming in. Our net worth has grown considerably since I retired in 2008.

 

[CO skier]

Now if I can only get my 2 boomerang adult daughters and wife to track spending like you and I do.

If there is some kind of magical "Economy Secret Weapon", that is the demographic.

 

[CO skier]

Our net worth has grown considerably since I retired in 2008.

Mine, too, but when the income stops, the fear of outliving one's savings takes front and center, and any middle class senior with any sense sooner or later realizes this ... and joins the "Happy Hour Special" crowd when dining out, among other cost-saving measures.

My brother-in-law, who recently passed away, was burning through $10,000/month in an assisted care facility for the past 3 years. That scares the .... out of me, even more so when factoring in inflation over the next 10 years before I may be in that situation.

Maybe I am just spending too responsibly.

 

[easyrider]

Mine, too, but when the income stops, the fear of outliving one's savings takes front and center, and any middle class senior with any sense sooner or later realizes this ... and joins the "Happy Hour Special" crowd when dining out, among other cost-saving measures.

My brother-in-law, who recently passed away, was burning through $10,000/month in an assisted care facility for the past 3 years. That scares the .... out of me, even more so when factoring in inflation over the next 10 years before I may be in that situation.

Maybe I am just spending too responsibly.

That's what happened to many people. Even with long term care insurance going to the "home" is expensive.

Bill