Dow Jones Cashed in Today

[chalsall]

Originally Posted by Uncwilly

I would think that some female investors might take umbrage to that statement.

LOL... But, to share, I've known many females who had hair on their chests... It's a function of age (and, by inference, experience), not necessarily just sex...

[ewmayer]

Originally Posted by Dr Sardonicus

On March 23, 2020, the DJIA closed at 18,591.93, the lowest closing value this year to date.

On that day, as
Of course, I don't know how much Ernst's sister relies on his financial advice, or what form such reliance might take.

There are stories about people whose forecasts of, say, the weather, are so reliably wrong that if they predict fair weather, you immediately decide to take an umbrella.

It is possible that if the "everything bubble" bursts at this point, the whole financial system will collapse. In that case, the notion of bargains in the stock market would be otiose.

That advice was given before it became clear that the Powell Fed is far and away the most hyperactively activist Fed in the history of that institution. All the signs up to that point indicated Powell was intent on slowly drawing down the $4Tln-plus balance sheet on the Fed resulting from the GFC bailout programs, and restoring interest rates to something more like normal pre-GFC levels - Wolf Richter was giving monthly updates on the drawdown of the balance sheet, and I recall buying a 3-year brokerage CD yielding 3.05% in August 2018, a nice change from the basically 0% my cash had been 'earning' for the preceding 10 years.

I certainly don't recall seeing any "I'm buying big, because the Fed is gonna step in a huge way to boost markets" posts from you, Mr. Wise Guy.

And based on the dire state of the real economy - over 30 million people still out of work as result of pandemic-related business shutdown, something like 1/3 of Americans were unable to pay their rent last month (let that utterly shocking stat sink in for a moment), mass-eviction crisis looming and Covid-19 resurging due to premature reopenings all over the US - the Dow *should* be under 10,000, if it still in any way served as a gauge of the real economy. When markets become so completely disconnected from reality, they don't deserve the name any more. And hey, great, everyone fortunate enough to have some spare cash to invest is feeling good about life - that is the essence of the disconnect problem: People who are feeling good about things due to their own personal wealth being intact (and growing to the moon, for the class of folks the Fed really serves) are unlikely to give a good goddamn about the hordes of folks who are really hurting. Smug ex post facto internet posts are a good example of not giving a good goddamn.

[VBCurtis]

Originally Posted by kriesel

How could you afford to invest while in college? Such affluence as to afford college and other investments too was unimaginable to me then. Paying for college solo required almost all my resources, extra time to finish, and some loans to get out quicker than otherwise.

Some of us are granted more responsbility than we're ready for; my parents allowed me to invest the savings they had set aside for my college. If I blew it, I'd have to find my own way through school.
I chose a public university to better ensure I wouldn't have to borrow to finish, one which I never departed: I teach there now.

[Dr Sardonicus]

Originally Posted by ewmayer

That advice was given before it became clear that the Powell Fed is far and away the most hyperactively activist Fed in the history of that institution.

Excuses, excuses...

I certainly don't recall seeing any "I'm buying big, because the Fed is gonna step in a huge way to boost markets" posts from you, Mr. Wise Guy.

No, I didn't proclaim on March 23 that it would be a good time to buy. However, you might want to look at this post, which was posted about 9 hours before you posted the Yoda-esque sagacity you had conveyed to your sister.

And based on the dire state of the real economy - over 30 million people still out of work as result of pandemic-related business shutdown, something like 1/3 of Americans were unable to pay their rent last month (let that utterly shocking stat sink in for a moment), mass-eviction crisis looming and Covid-19 resurging due to premature reopenings all over the US - the Dow *should* be under 10,000, if it still in any way served as a gauge of the real economy.

Indeed. I commend your qualifying your mighty big "if" as you have done. A lot of people use the word "should" as you did, but without the qualifying hypothesis, and without acknowledging that that hypothesis might not be satisfied.

However, the notion that "Wall Street is not the economy" is not exactly new. It has, in fact, been pretty well accepted for quite some time.

And I quite agree, the myriad economic woes, both macro and individual being wrought by the pandemic, will manifest themselves in the prices of stocks. The Dow may still plummet to 15,000, 10,000, and below. However, that may herald a more general economic collapse. And as I indicated before, that would make the notion of "bargains in the stock market" meaningless.

Speaking of economic reality, has the price of gasoline made anyone else snap to attention recently?

I still find it highly amusing that you told your sister to wait for the market to fall further, on the very day it hit bottom in the current go-round.

[ewmayer]

Triple shot of Wolf Richter:

Never Before Have I Seen So Much Fake Unemployment & Jobs Data by the Bureau of Labor Statistics. Labor Department Nails It | Wolf Street

Normally, the jobs report by the Bureau of Labor Statistics is released on the first Friday of the month. And the unemployment claims report is released Thursday every week. But this month, the monthly jobs report was also released today because of the 4th of July weekend. And now we have this delicious situation of both reports on the same day, with the Labor Department’s unemployment insurance data – people who are actually receiving unemployment benefits under state and federal programs – calling the Bureau of Labor Statistics’ survey-based report a liar. And we’ll go through them.

What the Labor Department reported today:

The total number of people who continued to receive unemployment compensation in the week ended June 27 under all state and federal unemployment insurance programs, including gig workers, surged by 937,810 people in the week, to 31.49 million (not seasonally adjusted), the highest and worst and most gut-wrenching ever.

All I can say is, buy Tesla shares! They are clearly going to infinity, because down is up, bad news is good news, etc.

[masser]

Considered putting this in Hmmm Things thread, but it probably fits better here: Current Stonk Market Revival versus Great Depression, Great Recession.

[Till]

Originally Posted by ewmayer

All I can say is, buy Tesla shares! They are clearly going to infinity, because down is up, bad news is good news, etc.

Good one...

[garo]

Originally Posted by ewmayer

All I can say is, buy Tesla shares! They are clearly going to infinity, because down is up, bad news is good news, etc.

Would have made a lot of money if you had followed your own advice

[ewmayer]

Originally Posted by garo

Would have made a lot of money if you had followed your own advice

You can still have some kicking-yourself fun by doing the math needed to fill in the blank in the following:

Tesla's current market capitalization is _____x that of the sum of the market cap of every other publicly-traded carmaker on the planet.

Over on Wolf Street a few weeks ago I made a quip - at least I thought I was quipping - to effect of "if TSLA's market cap fails to hit $1Tln by EOY, you can bet the Fed will step in and start buying shares directly. How does Fed chair Jerome Powell expect to MAGA by way of money-printing without directly supporting the shares of America's leading Ponzi-corp? Think of the children, Jerome!"

[masser]

Originally Posted by masser

Here's a crude prediction: The S&P 500 won't see 3386 again for another 5 years.

I only considered the 7 years it took for the index to return to it's tech bubble peak after that bust and the 6 years it took for the index to return to it's previous peak following the global financial crisis. My prediction is optimistic!

'It's tough to make predictions, especially about the future" - Yogi Berra.

Maybe the lesson should be: don't fight the federal reserve.

[ewmayer]

Originally Posted by masser

Maybe the lesson should be: don't fight the federal reserve.

Wolf Richter's latest on the Fed's ongoing program to make a mockery of the word "market", especially of the so-called "free" variety:

The Zombie Companies Are Coming | Wolf Street

Having unlimited ability to create money out of nothing with just a few keystrokes is "absolute power" in the financial-market sense. And absolute power does what it is notorious for doing...