Labor Shortage has been ongoing and steadily increasing for more than 3 decades (due to low births, low fertility rates, fall in immigration, and very slow growth in the US Labor force.) $Cboe Volatility Index(VIX)$$S&P 500(.SPX)$$DJIA(.DJI)$$NASDAQ(.IXIC)$ I do find it funny that public awareness of the issue is always 30 years too late. Although, if you were a Fed dork like me since high school I remember Alan Greenspan laying this out in the mid-1990s and even earlier in the early 1980s when he chaired a council to save Social Security. For those in the know the labor shortage was
Using 2018 as a guide unemployment hit 3.6% and there were no signs of excess wage growth. We also had 7.1 million job opening. Yet inflation barely registered above 2%. This is not any different (over a longer term). My major issue now is purposely harming the US labor force. I have an ax to grind with this policy prescription. WHY do we have to HARM US WORKERS when we ALL know the EVIDENCE for using NAIRU and the Phillips Curve is EXTREMELY UNRELIABLE? Why do people have to suffer losses in income & employment (?) Every single day I wake up this is WHAT BOTHERS ME MOST WHEN I WATCH FINANCIAL NEWS SHOWS. The incessant attacks on those of us in the 99% (poor, lower middle, middle, and upper middle classes) - If you're rich and or wealthy you will be fine - Don't use Media in negatively
Investment Note - TFY is looking at a 4% Gain this month on the S&P 500 - My inflation prediction will ring true tomorrow. Remember this was the first year i included CPI, CPI Core, and PCE Inflation in my forecast. I didn't do too bad, but still need to work on getting it more correct in 2023. Read the picture. Expecting at least a 2% move up/down following the release off final CPI numbers for December on the 12th. Remember i predicted between 6% & 7% - Rise of punctuated equilibrium. Also i have a dire political prediction the folks who held Congress hostage a few weeks ago. The debt ceiling gimmick will back fire an will not end in the way these guys/gals think. I will elaborate more later.$S&P 500(.SPX)$ Follow me to&nbs
I'm now predicting a shallow recession as my baseline for 2023. It is likely to occur in Q3 or Q4, but there is a rising possibility depending on the pace at which Nominal Growth slows and the pace at which inflation falls we could potentially be in for a recession that never materializes until 2024 (or doesn't happen until 2025.) This is data dependent and I will keep an eye on it, but as of now with almost 500 basis points of Federal Reserve hikes (200bps which happened 12 months ago) the economy is still growing at a very rapid rate (Nominal.) Corp Profits will still be high and can easily accommodate wage increases, but not forever, so yes, I agree at some point to restore Global Balance the US will need to see some moderation in income growth. It is unsustainable from a Global Standpo
Quick off the cuff thoughts on why there may be a higher chance of much shallower recession then originally imagined. Have not rerun the numbers but good gut feeling right now. $SPY(SPY)$$Invesco QQQ Trust(QQQ)$$Cboe Volatility Index(VIX)$$TLT(TLT)$$DIA(DIA)$My estimates were way under on the pace of job growth. They were also off on the pace at which people would return to the laborforce increasing the size of the labor pool.Nominal growth in Q3 this year 7% (rounded.
Recap on inflation expectations for October 2022. TFY had a range of 7% low to 8% high and guess what we came in at 7.7%. If you're not in thr discord you lost a lot of money on the report today.Inflation Estimate Recap from Last Month -The inflation stats continue to fall within rangei had at the low end 7.97% and high end 9%.Numbers are still high, but the growth rate ofthe 2nd derivative is falling, which also lowers the annualized rate of growth in CPI. We are still on pace to close the year at between 6% or 7% inflation. These numbers will hit the Base Effects in Q1 of 2023 and likely continueto come down significantly. Be patient we are going to be well above 2% mandate until 2024. Although, l think the Federal Reserve should up the tolerance f
Investment Note - S&P 500 End of Year Target Price - This is an update due to choppy markets and high volatility the distribution of returns has dramatically expanded. I am now forecasting as of the close of Friday's Price a range up or down of 9.5% (+/-) on the S&P 500 by December 31st, 2022. Buy into weakness Extremely Fast Nominal Growth continues to support Corp Revenue Growth and Margins. 200-Day Moving Avg - 4,134.71 Current Price 3,752.75 Price Target High 4,098.74 or P/E 18.41 - Earnings Yield of 5.43% Low 3,418.73 or P/E 14.25 - Earnings Yield of 7.0% Current Earnings Per Share Estimates 2022 - 222.58 Consensus P/E 16.86 or earnings yield of 5.9% 2023 - 239.80 Consensus P/E 15.64 or earnings yield of 6.3% Long-term investors need to use the 2023 shallow Recession
Dispersion Trading Profitability and Just a Reminder. I will show you how to do it 3 years ago. Attached is the winning strategy for options traders ;) - If you're not following you should be ;) $Cboe Volatility Index(VIX)$$Invesco QQQ Trust(QQQ)$$S&P 500(.SPX)$$TANDY LEATHER FACTORY INC(TLF)$$SPDR DJIA ETF(DIA)$ Trading Long or Short Dispersion via Dow Components (l am bias to Short Dispersion given my overallmarket outlook & belief realized volatility will rise this year)lf we are all assuming(1.) Decelerating Global & D