Still think TITNC3: Return of the Iceberg was peak

Is Disney cheap right now?
You guys are smarter than me. I just follow the sheep. Where’s our sheepdog?

 

If SPX finishes green today Ima lol.

 

Check it:

lol

 

Crisis averted, recession ended

 

Everything is cheap right now. The question is, will it get cheaper?

 

Maybe.

 

Yes

 

Splain your thesis.

 

market r fuk

 

We know your thesis. I wanna hear his/hers/theys/its/whatever.

 

That would get me suspended.

 

You can PM me

 

The money printer was turned off and inflation is double what they say it is. Once the fed cranks up rates and stops the student loan moratorium is when the music really stops. Business will cut jobs and go on a hiring freezes. Housing is next.

 

I disagree with plenty of these details, but putting that aside, since all of this is common knowledge what makes you think investors and businesses have not positioned themselves for these concerns already - hence the ~20% selloff?

 

Positioned or not, the market has lost more since March 2022 than all of 08. We are in a recession and it's only going to get worse. My multi billion dollar a year hospital is already threatening jobs being cut and hiring freezes... Hell, when I took this job (rn) they went on a hiring freeze in 17' - my first hospital in 08' stopped a pension contribution.

Obviously I work in medical, but to me the writing is on the wall.

 

And what do you disagree with... Was the money printer not turned off? Is inflation really 8%, cause I'd like to live where you are..

If the fed turns the rate up what will happen?

What about student loans, or are you one of those people that think the fed will really forgive them?

And you think housing is stable?

 

Is this not a given in consideration of how inflation works, the money supply being larger, and the investing population having grown nominally?

Hospital budgets run largely on insurance reimbursement, which is to say Medicare reimbursement in truth because the vast majority of hospitalized patients are 65+. Medicare has been under-reimbursing hospitals for ages. It's such an ongoing issue the AHA publishes a fact sheet about it every year: https://www.aha.org/fact-sheets/2020-01-07-fact-sheet-underpayment-medicare-and-medicaid

The shortfall is typically made up by private insurance, but with deductibles and OOP Max's rising annually, more and more of that billing is passed to patients who do not or cannot pay and becomes uncollectible debt the hospital simply writes off.

In case you haven't guess, I, too, am in medical.

Please don't confuse your anecdotal experience with conditions write large. If we went by what you see at work everyday, everyone who doesn't work at the hospital must be sick and dying, right?

Depends what you consider "the money printer". Reverse repo is still a thing. Rates are slowly rising but still extremely low by historical standards.

You may want to read up a bit more on fractional reserve banks. Banks print and destroy cash by the billions on the daily.

By the way the Fed calculates the CPI? Yes. There are certainly plenty of criticisms to level at the methodology by which CPI is calculated, most obviously in that it excludes many volatile items that real consumers cannot exclude from their life (such as direct energy and food purchases).

Inflation tends to be a localized item. San Francisco, inclusive of housing costs, has been over 10% inflation for years now. Detroit, conversely, is *deflating* by the same methodology.

To whom? In the housing market the most likely outcome is what we are already seeing: Decreased demand fighting with decreased supply and investment opportunity for cash buyers. Housing prices skyrocketing over the past few years were largely a case of a decade of underbuilding and underinvesting in the trades coming to a head. Don't expect it to get better. We're going where Canada is.

The other great area affected by rates, business investment, is likely to slow some but I hesitate to say it will be catastrophic. Rates are currently 0.75%. That's still exceptionally low by historic standards:

https://fred.stlouisfed.org/series/FEDFUNDS

And I do not expect it to deter the next generation of entrepreneurs. Rates were 5% when Jeff Bezos founded Amazon.

That is not within the Fed's purview. The President has some leeway to do so via executive order, but the majority of student loans would require an act of Congress to be forgiven.

That is not going to happen, nor should it. The vast majority of student debt is held by people in the upper two quartiles of income and they very much have the ability to repay the debt. Canceling student doubt would largely amount to a handout to the segment of the population that least needs it (college educated people earning college educated incomes). It would also be inflationary as people no longer required to address their debt service turned the income formerly earmarked to pay it towards consumption instead.

Yes, quite. Demand is drastically higher than supply. Buyers today are coming on board with significant down payments and much more stringent lending standards than '07/8/9. Their DTI is lower and they are taking out FHA or conventional loans, not NINJA ARMs.

As rates rise, things are likely to get *more* stable, because no one who bought two years ago on a 3% fixed 30 mortgage is going to sell and refi into a 6.25% 30 year mortgage if they have one remote iota of sense. It makes WAY more sense to stay put and take a *pay cut* before it makes sense to double your mortgage interest.

The simple fact on housing is this: We drastically underbuilt after 2008 for a changing population that is now displaying a much higher demand for housing. Prices should rise aggressively when demand is high and supply is low.

 

So market strong, got it.

 

Real street is hanging on.
Wall Street is taking it to chin from what I see.

Soon Wall Street will get fed-up and ask CEOs to start laying folks off to show they are lean and ready to fight to increase their share prices.