Keeping Powell in place was politically astute. He is surely not influenced by the White House. Look at his record.
OT: Stock and Investment Talk
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I'm not pinning it all on the Dem's. Russia is def a huge part of this, and the US oil companies have become, as is the current narrative, "more disciplined" in recent years (IE enjoying the higher prices). But the Dem's are in on it, and instead of looking to the likes of Saudi Arabia, Biden should be working with the Rep's in an oil now for green energy infrastructure compromise.
This is an interesting debate. On the one had by raising rates the FR is trying to cool the housing market. On the other, the housing market is said to have a significant shortage, which if accurate should keep prices high, if not drive them higher in time.
I'm watching the home builders because of this. For a sector that typically sells cheap, they are currently selling below their typical multiple.
Yeah, look at his record. Late last year, when Biden was still deciding if he would reappoint Powell they met in the WH. The very next day Powell announced the pivot away from transitory and became hawkish. Seems obvious that this was the price of reappointment. Smoke = Fire.
Who made him Chairman? And what did that person do when Powell tried to raise rates when he should have? I know you won’t answer in any intellectually honest manner.
I disagree. And will leave it at that. Clearly, the ball is in Powell's court. I hope his Fed gets more aggressive in curbing inflation.
Grow-up. I am having a non-partisan conversation.
You can't disagree with the facts. They are what they are. Fed Chairs are not as "independent" as you claim them to be. Yellen was exactly the same.
Calm down and grow-up. Nothing partisan in the past posts until you tried to do so. Go to the CE board if you can't control yourself.
Give him a break. His BTFD strategy is falling apart the same week as the rumor mill is reporting that his hero Cathie Wood might be stepping down.
Guess we can confirm my suspicion - you wouldn’t respond in an intellectually honest manner,
Powell and Yellen were telling us that inflation was "transitory" and completely misread the situation. You can't pump trillions of dollars into the economy and expect inflation to not go up. Now, they are playing catch up and will take down the economy in the process. Until there is complete demand destruction, inflation will continue.
Brought some Ally and PG. Trying to buy quality companies at close to 52 week low and decent dividend. Mainly buying quality dividends stocks close to 4-5%. Still at 75% cash. It appears everyone believe S&P is going down 30-35% and they are now talking about S&P 3000 or 37%. After these purchases, I will hold for several years. Before they started raising the interest rates, stocks were way overpriced and not a good environment to hold stocks.
Cramer basically saying don’t buy stocks until it settles because anything you buy is going down. I’m not adding any more AMZN, GOOG, MSFT, META, or APPL till they fall further, I think close to 10%. I also have some NVDA, my most riskiest Tech holding. I want to buy ADBE but has to fall further.
Even with this method, I have a substantial loss from my ATH but it could easily been 4 times greater if I just held my holdings. I should do well when the markets turn around in 1-2 years.
Cramer basically saying don’t buy stocks until it settles because anything you buy is going down. I’m not adding any more AMZN, GOOG, MSFT, META, or APPL till they fall further, I think close to 10%. I also have some NVDA, my most riskiest Tech holding. I want to buy ADBE but has to fall further.
Even with this method, I have a substantial loss from my ATH but it could easily been 4 times greater if I just held my holdings. I should do well when the markets turn around in 1-2 years.
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ESG concerns really did negatively effect capex. Some traditional sourcing of funds for this capital intensive industry dried up. I mean, why invest when one side of the government tells you they're going to shut you down? And of course, most of these companies lost a lot when the price of oil plummeted a few years back. I read somewhere it would take a billion dollars to bring a moth balled refinery back online. Not even mentioning the compounding issue of labor shortages. Lots of reasons for the high cost of energy, but I don't think it'll ever change. Energy inflation is here for the long term. After all a new green infrastructure will cost and someone has to pay for it. One reason why I believe getting inflation back down to 2% CPI will take a lot of work.
The only thing that is going to bring down the price of oil in the short run is a big pull back in demand. If that doesn't happen, oil will stay high and 2% inflation target will become next to impossible to achieve. Since the admin seems determined to kill fossil fuels I think this inflation is here to stay until they lose their power.
Also things got more interesting in Europe this week with big reductions in gas flowing from Russia.
From post-9/11 to the financial crash, the price of oil grew from $30ish to $180ish per barrel, with inflation largely in the 2-3% range for that time period.
Oil is a factor contributing to inflation, not the factor, and the price of oil doesn’t need to fall for its impact on inflation to ease, though it does need to stop racing higher.
(also keep in mind that the price of oil recovered to over $100 following the recession while at the same time we were worried about stubbornly low inflation)
The ultimate judge for E&P was the capital markets refusal to fund new production without ever getting to positive free cash flow. That predates the rise of ESG (which, in candor, is a joke). The bankruptcies of CHK and SandRidge, among others, helped shut off the flow of money.
That said, the speed that certain wells can be reinstated depends on the well location. Conventional or unconventional onshore, domestic can be back in 6 months or less. Think Permian Basin. Offshore deep water GoM? Yeah, that’s longer, and a lot more expensive, no doubt
Refineries are a whole different discussion. Notoriously cyclical crack spreads., massive capital intensity. You’ll often read that it’s been many decades since a new refinery was built in the US (which is a little misleading because existing refineries do add capacity and run more efficiently today, so total output has increased). But there are times when crack spreads are quite narrow, and the most profitable crude to refine is also the heaviest and dirtiest (which is squarely in the crosshairs of the ESG crew). No one cries for refiners when crack spreads are low and profits are near break even (or worse).
Then add the elimination of Russian supply, and you have quite a mess. And releasing mmbbls from the strategic reserve certainly doesn’t help Bring supply back on. Nor does talk of an excess profit tax. Overall, a very poor job by the administration on this front.
That said, the speed that certain wells can be reinstated depends on the well location. Conventional or unconventional onshore, domestic can be back in 6 months or less. Think Permian Basin. Offshore deep water GoM? Yeah, that’s longer, and a lot more expensive, no doubt
Refineries are a whole different discussion. Notoriously cyclical crack spreads., massive capital intensity. You’ll often read that it’s been many decades since a new refinery was built in the US (which is a little misleading because existing refineries do add capacity and run more efficiently today, so total output has increased). But there are times when crack spreads are quite narrow, and the most profitable crude to refine is also the heaviest and dirtiest (which is squarely in the crosshairs of the ESG crew). No one cries for refiners when crack spreads are low and profits are near break even (or worse).
Then add the elimination of Russian supply, and you have quite a mess. And releasing mmbbls from the strategic reserve certainly doesn’t help Bring supply back on. Nor does talk of an excess profit tax. Overall, a very poor job by the administration on this front.
I got out before it went entirely under but I took a loss on Sandridge when the Saudis flooded the market in 2014. Went from green (when Isis was making advances and oil markets got jittery) to red (Saudi market share war) real quick.
Sandridge and CHK are good examples of your typical 2000s leveraged operator. There was a lot of enthusiasm for the industry, and highly liquid and hungry credit markets to fund capital.
The enthusiasm is obviously gone and the cheap / easy money days are likely in the rear view mirror for lower quality issuers.
The Fed is getting tough. :)
www.cnbc.com
Fed promises 'unconditional' approach to taking down inflation in report to Congress
Federal Reserve officials rolled out strong language Friday to describe their approach to inflation, promising a full-fledged effort to restore price stability.
You weren’t alone. Many investors were burned looking at these companies stock prices relatice to proved, producing reserves or even PUDs, Price decks kept collapsing, though, I think the very last issue of Outstanding Investor Digest was exclusively focused on CHK. Mason Hawkins sung its praises. Compelling, but ultimately totally wrong.
Thought Musk was about free speech.
www.cnbc.com
SpaceX fires at least 5 employees over internal letter criticizing CEO Elon Musk
SpaceX has fired at least five employees involved in circulating a letter around the company that was critical of CEO Elon Musk.
Is It Time to Move to Cash? The Father of the 4% Retirement Withdrawal Rule Did.
With markets officially in bear territory, many retirees are anxiously wondering what they should do. The man who wrote the 4% Rule recently shifted to mostly cash, but should you?
Bill Bengen is one of the most influential figures in the financial planning industry. Based on the history of the capital markets since 1926, his research found that retirees could safely spend approximately 4% of their retirement nest egg over any 30-year period. These findings were based on a number of assumptions, including a portfolio investment mix of 55% large-cap U.S. stocks and 45% intermediate-term U.S. Treasury bonds.
Recently, however, Bengen disclosed that he has moved his own personal portfolio to 20% stocks, 10% bonds and the remaining 70% to cash. This news may have some retirees wondering whether they should do the same.
I’m not retired yet.
Is It Time to Move to Cash? The Father of the 4% Retirement Withdrawal Rule Did.
With markets officially in bear territory, many retirees are anxiously wondering what they should do. The man who wrote the 4% Rule recently shifted to mostly cash, but should you?www.yahoo.com
Bill Bengen is one of the most influential figures in the financial planning industry. Based on the history of the capital markets since 1926, his research found that retirees could safely spend approximately 4% of their retirement nest egg over any 30-year period. These findings were based on a number of assumptions, including a portfolio investment mix of 55% large-cap U.S. stocks and 45% intermediate-term U.S. Treasury bonds.
Recently, however, Bengen disclosed that he has moved his own personal portfolio to 20% stocks, 10% bonds and the remaining 70% to cash. This news may have some retirees wondering whether they should do the same.
Big dip in oil prices this week. A lot of thought from the CNBC trader's/charts/options guys that there is more downside to be had.
Think the fear of a pullback in demand is the driver.
Oil and energy stocks are artificially inflated. When the tide turns with Putin, they will crash 20-30% in a week.
Ha, ha, my parents knew Tom Ward. They lost some on his company too. I'm pissed someone just didn't get them out, it's often better to cut your losses, even if in an IRA where you can't harvest the loss.
Wonder about his tax consequences. Of course you only pay taxes if you make money and making is better then losing.Is It Time to Move to Cash? The Father of the 4% Retirement Withdrawal Rule Did.
With markets officially in bear territory, many retirees are anxiously wondering what they should do. The man who wrote the 4% Rule recently shifted to mostly cash, but should you?
Bill Bengen is one of the most influential figures in the financial planning industry. Based on the history of the capital markets since 1926, his research found that retirees could safely spend approximately 4% of their retirement nest egg over any 30-year period. These findings were based on a number of assumptions, including a portfolio investment mix of 55% large-cap U.S. stocks and 45% intermediate-term U.S. Treasury bonds.
Recently, however, Bengen disclosed that he has moved his own personal portfolio to 20% stocks, 10% bonds and the remaining 70% to cash. This news may have some retirees wondering whether they should do the same.
Not understanding going so much cash when you can get bonds at very short maturities -- 1, 3, 6, 12 months -- and at least earn something on an investment. Cash does give flexibility though.
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This is a very different situation. If you look at inflation over the course of history its not consistent as to where it rears its ugly head. In money printing era inflation has been in financial assets, but that has changed in the last year. Currently inflation is in real assets like oil, food, etc.
Today's issues are much harder to fix and when you combine that with an admin that is hostile to fixing the supply side its obvious that only a drop in demand will bring down the price of oil. Also add into the equation that financing for the entire supply chain just got a lot more expensive. The admin is spending their time brow beating big oil, talking about price controls, begging Venezuela and Saudi Arabia to produce more oil which either won't help or will make things worse in the case of price controls.
I just don't think these two periods are an apples to apples comparison.
Today's inflation is mostly due to conflict and COVID, not monetary policy (which means, lots of fear and emotion). The Fed is going to have to take less action than the market thinks since inflation will plummet once Putin and China are done doing what they do.
Great option, just wish they didn't have an arbitrary $10k cap on purchases.
Yes. I’m capped out this year but intend on doing more. A ray of sunshine in what may be a stagflation world for for foreseeable future. I’m basically sweeping up liquidity from other accounts right now without selling anything at a loss and will dip into Marcus when I’m out of “loose change in the sofa.”
Kind of OT, but our local pool is closing because they can’t find any lifeguards. I talked to one of the board members and he said he can’t explain it, they had a waiting list of lifeguards up to 2020 and the bottom dropped out. They even significantly raised pay and that didn’t attract anyone.
As someone who is only 31, I struggle to wrap my head around this as I’m not that far removed from working part time jobs in college/high school. I keep hearing this is a direct impact of inflation/stagflation but that doesn’t square with me.
For those who were around during the 70s/80s stagflationary period, did small businesses struggle to find employees due to the perceived imbalance between pay, effort, and cost of living?
As someone who is only 31, I struggle to wrap my head around this as I’m not that far removed from working part time jobs in college/high school. I keep hearing this is a direct impact of inflation/stagflation but that doesn’t square with me.
For those who were around during the 70s/80s stagflationary period, did small businesses struggle to find employees due to the perceived imbalance between pay, effort, and cost of living?
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