Friday, February 16, 2024

Stagflationish Data, Sentiment Extreme, When We'll Be Buyers, And That Dangerous Soft-Landing Narrative (video)

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  1. Marty: I have been watching your videos and comments on a daily basis even though I have not been active in making comments. Like always, thank you for taking the time to put together amazing videos and updating us on the market. It is time consuming, but definitely worthwhile in my opinion. Your thoughts, technical analysis, macro-economic views, valuable experiences through many cycles of Bull/Bear markets, and solid financial advice are great.
    The US economy is definitely in a tough spot with Stagflation, rising inflation with weak economy. Japan, as the 4th largest economy in the world, is in recession. Germany and China, as the 3rd and 2nd largest economy, are on shaky ground. What makes the US different from others when you have weak economy, rise in credit card payment delinquency, depletion of saving, rise in layoffs, geopolitical tension, unstainable commercial real estate loans, and much much more with the list? The economy is definitely not healthy when you have the market only focuses on some with insane P/E ratios.

    Note: Two (2) years ago, I don't even know what is P/E ratio. LOL... :)

  2. Thanks Sam! You are too kind!
    Right on all counts... In terms of the US economic dynamics, I think we can boil the resilience -- in the face of all you mentioned -- to the fact that we've had this rare combination of rising fiscal (govt) spending right alongside of consumers continuing to spend aggressively while drawing down their savings... Typically these two factors counterbalance one another... I.e., when the consumer pulls in, govt steps up to fill the gap... When the consumer is an active economic "agent," government typically runs much smaller deficits, as it's not needed to juice the economy... Combine large fiscal deficits with a very active consumer and you get strong GDP growth... Of course that is not a long-term sustainable phenomena.

    One thing I'm quite certain of is that we're in for some serious volatility ahead.

    Have a nice weekend my friend!