I am beginning to think 1929 style deflation?
We are at the top of a massive bull.
That was not true in 1921 or 1922.
We have the debt, the equity values etc…for a crash.
We have the putz from hell.
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We have a much more “rigged” economy today with the levers of government positioned to favor corporations and the wealthy. You can forget about deflation. Inflation, lack of antitrust enforcement, price gouging, and excessive Executive Compensation are the rules of the game.
intercst
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I’d have to ask, just because we’re in a massive bull stock market, which will necessarily end, why do you leap (sorry, no pun intended) from that to 1929 style deflation? A crash? Yes. A general economic slowdown for a few years? Of course. As regular as a castor oil addict. But I don’t see the specter of 1929. Personally, as a person with a lot of money, I’d love to see some substantial deflation. Not 1929 maybe but money for nothin’ is always welcomed
Actually with tariffs we had a worse market in 1921-1922 if you go by values.
Fed policies are quite different now. Back then there was a doctrine known as real bills. This indicated that central banks should supply more funds during economic expansions, when individuals and firms demanded additional credit to finance production and commerce, and less during economic contractions, when demand for credit contracted.
A slowing economy got less money, leading to more slowing. Now the Fed acts counter-cyclically, supplying more money when there are recessions.
DB2
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Valuations don’t support a new bull market
OK. So? I don’t see deflation in that.
It’s 16% over valued now?
Ok. Maybe it halts or maybe it continues to boucoup overvalued.
The article’s title is kinda jokey anyway. “This years deep slump”?
Unless there was another one I slept through it was about 8.xx% Hardly “deep” and hardly a “slump.”
I’m no arguing with you. I have successfully timed the market before. If we’re heading for something I can make money on I’d like to be able to see it.
The last time we had a 'generational wash-out of all previous gains was 2008. I did a quick look-back at things and looked at all the ups and downs, corrections and crashes. At the time think I concluded that we won’t have “the big one” before sometime in the 2030’s. Of course every age has it’s peculiarities and we are heading into one here in the next few weeks. The history rhyming if not repeating rule applies.
Bob,
You are arguing degrees of downturn. In 1921 there was not $35 trillion in debt. Fiscal policy matters more than monetary in the demand side part of the cycle.
@FCorelli Same answer as to Bob.
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A) Are we in the brave new world of demand side? I haven’t see it.
B) Fiscal policy? OK We’re sort of doomed in that case? (sorry, couldn’t get there without it sounding political)
C) They’ll save, or maybe “address” the economy any way they can. Fiscal, monetary, and anything else they come up with.
I agree the throwing of money has less maneuver room with 35 trill already out there but they’ll do what they have to.
C)
This is now a demand side economics period in the US.
That is a very abstract notion on one level.
BTW this is like debating the Vietnam War eventually the warhawks got it. The Supply-side economics guys will only be seeing the light after a complete crash and facing just what a pack of lies they were wallowing in.
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While true, I find it very hard to believe the Fed would decrease the money supply (as they did in the Great Depression).
DB2
There is sure to be a Bear, especially with the market this frothy. That said, TFG can cause a period of honeymoon and swoon from the finance sector, so it might be a little later than sooner. Never can tell.
I doubt a major catastrophe, absent, you know, catastrophe (Invasion of Taiwan, another pandemic, Taylor Swift stops touring, those kinds of things.) 
But I’m sitting with mucho dinero on the sidelines waiting for a re-entry point. I wish it would get here and get it over with, already.
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Technically he is a lame duck. He needs to get everything done quickly to push anything at all. Real or imaged that perception matters. It leads to more power later. If he can claim success.
Has he ever been much of a success in life prior?
The track record is hellish. He is all in.
Austerity and tariffs immediately. Strike fast and hard.
The markets right now are going south while yields head north.
We do not know. We are about to open a can of worms. Why not?
Who me worry?
???
TPG is the lame duck
DB2
TFG or TIG second term lame duck.
You can understand that.
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Well, in spite of multiple, large, and public failures he did manage to get himself elected to the most powerful position in the world, so there’s that.
But no, I expect failure in multiple venues at multiple times. That doesn’t mean that there can’t be a honeymoon period, especially from True Believers® who have a lot of money at their disposal to put into the market at first.
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No one is a true believer.
No one.
Too many lies for that.
But those who want tax cuts and have money are on the sidelines. They will remain on the sidelines as smart money does.
He takes on larger projects and lands them. But all of them turn to crap. It is not bragging rights to screw up on a larger stage.