Educated guess on Wednesday's rate hike by The Fed (9/21/2022)

If The Fed was a BMX jumper, this photo sums up how they're doing right now at their mandates...  #steveemigphotos

This Tuesday and Wednesday The Fed governors meet (officially Federal Open Market Committee- FOMC), to decide exactly how much they want to fuck up our lives further.  I mean, to decide how much to raise interest rates by raising the Fed Funds Rate, to "fight inflation."  The big money is betting on a .5% to .75% hike (50 or 75 basis points).  Their next meeting after that is November 1st & 2nd.  

Here's the problem, The Fed has pretty much lost all credibility with the stock market traders.  Traders know The Fed will have to lower rates again, to bail out Wall Street and corporate America, probably within 6 to 12 months.  The Fed is trying to convince Wall Street traders that they really mean business, and that interest rates will stay high at least through then end of 2023.  Then stocks and real estate will drop, and overall consumer sales will drop, what they call "demand destruction."  If we go into a serious recession, people buy less stuff, prices drop, and that makes inflation go back down.  The Fed wants some inflation, but only about 2% per year.  Right now were officially at 8.3%.  Big difference.  The problem is, the stock markets keep rallying after each rate hike, believing The Fed will drop rates back down in 6 months or so.  In the past 3-4 months, the market falls the week or so before the rate hikes, then rallies back up on the announcment day, and keeps going up.  We might see another market drop on Monday, then Tuesday the markets will most likely be flat.  Then Wednesday, Fed governor Jay Powell makes his official announcement of their decision.  Here's what I see as the most likely reactions by the stock market on Wednesday.  

Disclaimer

.25% rate hike- Not going to happen, we're way beyond the traditional level of interest rate hikes at this point.

.5% rate hike- Stocks soar several hundred points on Dow and Nasdaq- probably a 1% to 3% rise, and continuing rally in coming days and weeks, until October inflation number comes in above 8%, when things drop back some, like they did last week. 

.75% rate hike (most expected outcome right now)- stocks rise, maybe 200-400 points on the Dow, and 100 or more points on the Nasdaq.  Another false hope rally comtinues until October inflation number comes in at 7.8% or higher.

1% rate hike- (Possible, but unlikely action)- The Fed actually, sort of, kind of, looks like they're serious about fighting inflation.  Markets drop a bit Wednesday through Friday, and then another false hope rally begins slowly.  

1.25% rate hike- (Nobody expects this)- The Wall Street traders go "Oh shit, maybe The Fed IS actually serious," and the markets drop a couple hundred points, or more, and The Fed actually gets the results it wants, slowing down the economy enough to actually have some effect on asset prices, and therefore on people's mindsets, and inflation cools off a little faster than it's gradual slowing pace it's doing right now.

1.5% rate hike- Absolutely no chance whatsoever of this happening, but this is how much The Fed would have to raise rates to actually cool things off as much as they say they want to, to actually bring down asset prices quickly, slow down consumer spending, and then slow down inflation, since they are so fucking far behind the curve now.  

That's my view on the possible scenarios possible this next week.  Remember, I'm just a crazy homeless guy (who has been predicting this current recesson since 2019), and this post is for entertainment and education purposes only, and should not be taken as advice.  Click the "Disclaimer" link above for the full disclaimer for this blog and all my financial oriented posts.

Blogger's note- Wednesday 9/21/2022- 4:11 pm Pacific- after The Fed announcement- So... I was right and I was wrong.  Yes, as expected, The Fed raised rates by .75% or 75 basis points.  The immediate reaction was that stocks went down.  I figured that was likely, but I thought that the markets would rise by the end of the day, as they have on (I believe) the last three Fed rate hike days.  

A hour after the announcement, stock markets bounced up, and the Dow, Nasdaq, and S&P 500 were all positive.  I've been calling these "false hope" rallies, with the markets believing The Fed will have to lower rates in 4-6-8 months because of the recession or some major crisis (like the Lehman Bros. collapse in 2008).  Then, the markets dropped back down, which is what would normally happen on a huge interest rate hike day.  But financial markets have been anything but normal since 2008, and particularly since 2020.  The Dow closed the day down over 500 points, about -1.7% lower, with a similar percentage drop in the Nasdaq and S&P.  

Is the reality of dark times ahead finally setting in on Wall Street?  Perhaps.  As I said back on March 22, in my old blog.  This year, 2022, feels like another 2008, and we've had a bumpy downhill ride in stocks since, along with a huge rise in interest rates, both of which I predicted.  We're still a ways from the numbers I forecast in that post (Dow below 27,000, Nasdaq below 10,000, and S&P below 3,500), but those numbers look possible now, by the end of 2022.  

I expect some Black Swan event, or perhaps, at this point, just reality setting in of a severe recession, which will drive markets down A LOT in the end of September or October, and then they'll hit bottom between October and next spring.  That's where it appeared we were heading back in March, and that's where it still appars we are heading, until inflation (official CPI) gets close to 2%-3%.  And that's a long way off.  

I think the recession period experience, for everyday people, will last years.  There will be ups and downs, but we have years of tough economic conditions ahead, for most of the U.S. (and world) population.  That part reminds me of the early 1990's.  Officially, we had two recessions then, a "double dip."  But for most people, the economy was slow from early 1990 through most of 1996.  The 2020's will feel a lot like that.  But the policiy makers live in a bubble far removed from the day to day experience of most Americans.  At their financial level, the recession is a minor inconvenience, and zeros in their investment values.  It's much different for everyday working people trying to feed families during layoffs and rising food and gas prices.  

There's a whole lot of change across society that needs to take place, which I've written about in my Big Freakin' Transition idea, several places.  There's a lot of change in how businesses and organizations operate to take place (out of old Industrial Age models, and into Information Age native models), as well as a massive populist movement, because most jobs today can't sustain a decent standard of living.  There's just a ton of issues that need to get worked out, throughout society, in my opinion.  That will take years, no matter what The Fed does.

I also believe The Fed will overcompensate, again, flooding us with liquidity, new money, in 2023, maybe 2024, which will slow this whole shake out process down, and lengthen the overall economic mess.  Things may move towards some kind of stable new normal by 2026 or 2027, and probably a bit later.  This whole decade will be pretty crazy, and that's if we avoid more major wars.  As I've been saying for quite a while, we are just beginning the craziest couple of years of the 2020's.  Buckle up, now it's about to get REALLY interesting.

My thoughts on financial markets:

White Bear Investment Ideas

A September to remember...

 The CPI inflation rate came in at 8.3% (YoY) this morning (Sept 13, 2022),  .2% higher than the markets expected, which led to a much needed dose of reality in asset prices, which is why stocks are tanking.  

Disclaimer

Welcome to Recessionary Wave #2 of what I call The Phoenix Great Depression.  I've been blogging about a prolonged period of economic downturn since 2018.  This is it, I believe we're now heading into what will be the worst part of the 2020's now.  That's the bad news, a gnarly recession that will be comparable to the Great Recession.  If you lose your job, or have an absurd amount of debt, things will get tough.  But we'll get through it.  We all made it through 2020, and that was an actual economic depression AND a 100 year pandemic, at the same time.   

What does all this mumbo jumbo mean for you, an average working American?

(One) Prices on every day things, will keep rising, in general.  Gas prices have back off, but food, household items, and utilities will probably keep rising for a while. 

(Two) Home prices are beginning to come down in many cites, particularly in the West, Southwest, and the South.  They will probably drop quite a bit more, particularly in cities with lots of  high tech, like the San Francisco Bay Area, L.A., Seattle, and Austin.  The smaller cities that saw huge home price increases during the pandemic (Boise, Denver, Salt Lake City/Provo, Nashville, etc.) will see really big price drops.  The Northeast, Midwest, and plains states will see mild real estate declines.  

(Three) Rent prices MIGHT actually decline in some of the higher priced cities, over the next year. This is iffy, but the potential is there. We'll see.  

(Four) Interest rates will go up more next week, after The Fed's meeting, by .5% to .75%, and will most likely go up .5% more later this year.  Loans of any kind will be harder to get, and charge more interest for a year or more.  Credit cards, new student loans, car/truck loans, business loans, and home loans.  So 30 year fixed mortgage rates should be around 7.5% to 8.5% by the end of 2022.  The Fed can't lower interest rates, even if we fall into a deep recession, until the inflation rate (CPI) is down below 3% or so.  That will probably be LATE 2023.  

(Five) The GOOD NEWS- If you have some money set aside to invest.  Asset prices should drop dramtically over the next 6 months to a year.  We will see some of the best prices for stocks, real estate, crypto, and collectibles in this coming year.  If you're in a position to buy any of these, and you do your homework and proper due diligence and search for great deals, there will be many amazing deals to take advantage of.  I'm talking of long term investments, not day trading gambling.  Some of the best deals of the next couple of decades will happen in the next year, in my opinion.  

Recessions are when everything goes on sale, and almost nobody wants to buy

Here's where we're at right now.  Inflation is historically high, it's been over 8% (annual average) since March, and it was 7.9% in February.  It's been over 6% since last October.  Today's numbers came in at 8.3%.  That means The Fed (Federal Reserve) will keep raising interest rates to slow down inflation.  If they figured inflation that same way they did in the 1970's, today's inflation would be higher today than it was in 1979-1981. (Check Shadow Stats for details)

A good "yardstick" for watching interest rates is the U.S. 10 year treasury rate (chart here).  It was about 1.77% at the beginning of 2020, and is 3.43% today.  That's a HUGE jump in interest rates.  Most people pay more attention to the 30 year fixed mortgage rate, the interest you pay to buy a home.  Using the Google calulator, that's now just over 7% (20% down, $500K loan, 698 FICA score- the US average score).  Those mortgages were about 3% in January.  Home mortgage rates have more than doubled this year, and they WILL go higher.  

Next week, The Fed (F.O.M.C.) meets, and they are expected to raise interest rates another .5% at least, and likely .75%, after today's inflation numbers.  So we know most interest rates will follow that lead, and rise as well.  

Inflation should slowly calm down, and will likely be around 6% to 7% by the end of this year.  But The Fed wants 2% inflation, and that's a long ways away.  

Overall, we're heading into another gnarly recession.  It's always smart to pay down your highest interest debt as much as possible.  It's smart to keep learning new job skills for your current job, to avoid layoffs.  If you do get laid off, figure out what job skills you may need to learn to get a new job, or find a new career.  A LOT of people, MILLIONS, will have to find new careers in the next few years,  that's just the nature of these crazy times we are in, something I've written a lot about.  

Most people, generally, will have to cut back on spending, and just buckle down and work through this, like every other recession we've all lived through.  It's not the end of the world, though it may feel like it at times, for some people.  

I know this is not what everyone wants to hear.  But I'm a futurist thinker looking at what's really happening.  Like I said, there will be a lot of great deals on big assets, and there will be a lot of cool news businesses that start in the next 2-4 years, and grow after that.  So that's my take on things.  If you don't know whether you should listen to me, here are a couple of blog posts from months or years ago.  

The Economy for 2022- March 22, 2022

Predictions: As we head blindly into 2020- January 26, 2020

A Beginner's Guide to the Next Great Recession- August 9, 2019

Recession Tips: 25 ways to put cash in your pocket TODAY

Here's a panhandler using shock value to try and get some donations.  I saw this guy, and snapped the photo, with his permission, in Hollywood back in 2019.  He had a bunch of weird and funny signs, asking tourists for cash, I'm not sure how this one panned out for him.  

This post is a companion to the one I wrote the other day, "20 legal ways to put cash in your pocket this week."  Like I said in that post, we all have our favorite go to ideas when we need to come up with a little extra cash for some reason.  The point of making this big list is to expand your thinking, to some ideas that maybe didn't cross your mind.  Warning, the links in this video might be offensive to humans, or NSFW.  But you're reading a post about free money, so there's a good chance you don't have a job, so that probably won't be a problem.  

(One) Cash in change you've been saving- Yes, change.  Coins.  Icky physical money.  Yes, it's old school. But it's one of the easiest ways to save some money without really trying.  When I was a taxi driver, years ago, I had a small cup, in the cup holder of my cab, with some change in it.  Sometimes in a taxi, when a fare was, say $6.65, there are people who wouldn't round up and pay me $7.00.  Really.  They wanted that 35 cents in change back.  So that's what the cup was for, change I could grab quickly for those passengers.  Taxi driving, in the mid-2000's, was a mostly cash business.  I was buying gas every day, and food, and I paid for those in whole dollars, and threw the change in the cup.  So my cup of change kept filling up.  

At the time, I was living in my taxi, and had my clothes and personal stuff in a storage unit.  I bought  a little plastic water jug, put it in the storage unit, and started throwing the extra change in there.  Once the change started adding up, I wanted to add more change to it.  It just happened automatically.  Then I started throwing a dollar bill or two in the jug.  When I was in a bind, I'd shake some change out of the jar, to cover what I needed.  Eventually, I bought separate little jugs with quarters, dimes, nickels, and pennies.  When I finally had to move out of my storage unit later on, I finally cashed it all in.  The dime jug along had over $100 in it.  I saved over $100 in dimes, without trying.  For real.  Just by paying for things with cash, paying in whole dollars, and throwing th change in a cup, I was saving $30 to $70 a month, without trying.  So if you make this a habit, and get in a bind, cash in some of that change.  

(Two) Cash in aluminum cans/other recyclables you've been saving- This is another habit you can do pretty easily.  If you have a bin for aluminum cans, and maybe glass and plastic bottles, if they can be cashed in where you live, then you have some untapped money growing day by day.  When you're in a bind, cash in those recyclables in and use the money where you need it.

(Three) Tap into a "slush fund" you have for "rainy days"- A "slush fund" is my name for some savings set aside, in a place or account seperate from every day money, and separate from long term savings.  So you may have your checking account to use for every day expenses, and then CD's or a savings account destined to go into retirement, investments or some long term goal.  I've found that having an "in between" savings account, maybe $50 to $200, is good for the mid term things in life that just come up.  With a slush fund, you have a little back-up money when a tire blows on the car, or the kids need money for a trip at school, or whatever.  It's more than can you can easily pull out of the checking account.  You can pull some money out of the slush fund to handle a problem, without having to touch your long term savings for retirement or investments.  So if you have a slush fund, pull some money out of there, take care of the current issue, then build that money back up in the slush fund again.   

(Four) Pull money from savings/CD's- If the reason you need money is big enough, and important enough, and you have a savings account or CD's, you can tap into those to pay the unexpected expense.  

(Five) Pawn something at a pawn shop- Pawn shops go back to anicent China, around 3,000 years ago, and were also around in Ancient Greece and Rome.  That doesn't surprise me.  Since civilization has existed, there have been people who got into a bind and needed some money for an emergency.  Pawn shops loan people money, and hold a physical object as collateral.  The loans are generally fairly small, $20-$500 maybe, most of the time, and the interest rates are pretty high.  But the interest is not that much in total, since the loans are small.  The most popular things to pawn are jewelry, musical instruments, guns, power tools, and electronics, though they make take other items with value.  You take something to a pawn shop, they offer you a certain amount, far less than the value of the item, and they give you cash, and hold the item until you pay off the loan.  You come back, usually within 30 or 90 days, pay off the loan and the interest, and get your item back.  Simple and effective.  There's a reason pawn shops have been around for 3,000 years.  

(Six) Sell something at a pawn shop- Pawn shops also buy physical items outright.  Jewelry, guns, musical instruments, sporting equipment, power tools, and electronics are the primary items they buy.  They may buy other things if the items have inherent value.  Usually they pay 10% to 20% of the current value, so you don't get a high price, but you get CASH RIGHT NOW.  That's the point of pawn shops.  

(Seven) Sell clothes at a consignment shop- These primarily buy women's clothes or baby clothes and gear, depending on the shop.  You take in used clothes, they pick what they like, and pay you cash for those pieces.   

(Eight) Sell something of yours to a friend or family member- Find someone in your immediate life, and sell them something of yours.  "Hey Bob, you know that motorcycle helmet I have in the garage, I'm in a bind, will you give me $50 for it?"  That kind of thing.  

(Nine) Sell collectibles to a local shop- There aren't as many brick and mortar collectibles shops as there used to be.  But if you collect something, and there's a shop that buys those things in your area, then you can sell pieces of your collection.  This can be sports cards, comic books, action figures, high end watches, collectible figurines, stamps, or anything else that people collect.  

(Ten) Sell collectible coins to a local coin shop- This is another kind of collectible, and there are still some physical shops in many areas where you can sell collectible coins.

(Eleven)- Sell used furniture to a local consignment shop- Do you have some high quality furniture that you don't really need or want anymore?  There are furniture consigment shops that may buy it.  In many cases, they may come to your house, check it out, and make an offer.  If you accept the offer, they give you money on the spot, and haul the items back to your shop.  In some cases, you may have to take the furniture to their shop to get it checked out.  

(Twelve)- Sell gold, silver, or platinum to a local shop or jeweler- If you bought gold, silver, or platinum as an investment at some point, you can sell these for cash at a gold and silver shop, coin shops, and many jewelry shops will also buy them, for cash on the spot.  

(Thirteen)- Sell jewelry to a jewelry shop- They may not pay top dollar, but they will likely pay more than a pawn shop for quality jewelry, and gemstones.  

(Fourteen)- Go collect aluminum cans/recyclables, then cash them in- If you don't have a bin of aluminum cans or other recyclables, you can go out and pick some up.  There's a lot of competition if it pays well, but you can find a few dollars worth if you put some time in searching.  

(Fifteen)- Sell record albums, CD's, or DVD's to a local shop- There are lot less of these music shops than there used to be, but they do still exist.  You can still sell used vinyl records, CD's, and DVD's, if you have any, to local music shops. 

(Sixteen) Take money out of the offering plate at church, and leave God an IOU- OK, I'm kidding, DON'T do this.  I just wanted to see if anyone was really reading this far down this list.  

(Seventeen) Take item back to a store (keep your receipts)- If you have some item you bought recently, and have a receipt, like clothes, an appliance, even canned foods, you can take them back to the store and get a refund.  

(Eighteen) Babysit for someone- Does anyone you know need someone to watch their kid(s) today?  This one makes sense more for younger people, like teens, who may do some babysitting already.  Babysitting pays a lot better now than when I watched neighbor kids while in high school.  Back then the pay for watching two demon spawn boys was $1 and hour and all the government cheese I could eat.  I don't like governemtn cheese.  Things have improved since then, from what I've heard.  If you babysit, get word around, see if anyone needs you to sit the kids today.

(Nineteen) Do a job on Fiverr if you're already signed up and active- If you have some basic design/technical skills, and  are already signed up on Fiverr to do gigs, try to get one or two today.

(Twenty) Do a job on Mechanical Turk if you're already set up and active- If you have some design or technical skills, and are already signed up and ready to go on Mechanical Turk, try to score gig today.

(Twenty-one) Offer to do some service for friends or neighbors- See if any of your neighbors have a small project you can to to earn some cash.  Ask them in person, on social media, or use a site like Nextdoor to find some local gig to do and earn some cash.  

(Twenty-two) Teach a skill to someone for a fee- Do you have a skill that someone in your area would like to learn.  Teach the neighbor's daughter how to do a cartwheel for her cheerleader tryouts, teach Aunt Ester how to work Instagram, teach someone how to play a song on their new guitar.  Whatever.  Actually, you can do this online/on-phone as well these days, so it could be a person anywhere.  Be creative.  

(Twenty-three) Do homework for someone for cash/trade- I used to do this for a couple of my roommates in community college, back in the day.  I once read 90 pages and filled out a 7 page worksheet for a $6 pepperoni pizza.  Hey, I was young and needed money.  Work a better deal than that, but you get the idea.  

(Twenty-four) Give someone a haircut (if you know how and they actually want one)- Got some skills with the clippers and scissors?  Give someone a haircut and style for some cash.  People in the hood know about this one, barber skills are highly respected in the hood, homeless shelters, and jails.  But haircuts can be done anywhere. Well almost anywhere.  I saw some guy giving haircuts in the back row at church once, and that didn't go over well.    

(Twenty-five) Ask for money on social media (Good, LEGIT causes only!)-Sites like CyberBeg and Begging Money are two sites left where you can do this.  If you have a LEGIT cause ("I need beer" is not a legit cause), you can log on and ask strangers to help you out.  I've never tried either of these, but they are out there, and you can try them if you want.

(Twenty-six) Ask friend or family for a loan- There's a reason why this is near the bottom of the list.  Loans from family and friends can really help out in a time of need.  They can also turn into long term beefs that keep people from talking to each other for years.  That's why this is so far down on the list.  Do not ask a person close to you for a loan unless you actually intend to pay it back.  

(Twenty-seven) Panhandle money from a stranger- "Panhandling" is asking money from a stranger in the streets.  That's the actual definition, paraphrased.  Panhandling is begging for money, something that has been happening since money was invented.  There are so many people who do it now because there are a lot more down and out people in society these days, and because it works.  You can either just ask a stranger for money somewhere, or make a sign asking for money, and sit or stand in a place where a lot of people will see you.  Crazy as it sounds, about 1% to 3% of people will give a complete stranger a small amount of money.  If you do this, be polite, and say "Thank you."  

There are four main types of panhandling: (1) One on one- asking a stranger for money on the street,  (2) "Flying a sign"- holding a sign in a popular location, asking for money, (3) Running a non-profit organization- have your volunteers ask strangers for money, then pay yourself $250K a year as CEO, and (4) Becoming a politician- Put on a suit, make bullshit promises, and ask strangers for money in the street.  Even if you lose the election, your meals, travel, hotel, and bar tabs get paid for the whole time you're running.  

(Twenty-eight) Put granny on the corner to turn tricks- OK, I'm joking again, don't do this to granny, even if she has false teeth and can take her dentures out and really do a good job.  I just wanted to see if anyone made it to the bottom of the list.  

So there you have it, 25 LEGIT, potential ways to put money in your pocket today.  And two funny ways to give you a laugh and get you to read the whole list.  As an added bonus, I'm going to add one more.  Start your own blog, and put a donate button on it, a "cyber tip jar," as they used to call these, where people can throw you a few bucks to buy a cup of coffee, or buy lunch, or something.  Like this one below... where you can send me a couple of bucks from the money you'll make off these ideas.

Recession: What's coming in September 2022?

This is one of the best minds on the economy around, Chamath Palihapitiya.  This talk by him, about 11 minutes, is from a few weeks ago, but goes into the macroeconomic picture in the world today, going back to the Great Recession of 2007-2009.  There are some unrelated photos edited over most of this, but the audio is solid.  

Disclaimer

I've been writing about a long, sticky, major economic downturn for about 3 1/2 years now.  The trends I have been watching for many years, began to merge, suggesting really crazy times ahead.  I've grown to be pretty good at forecasting the coming econmic climate, but haven't been able to build a business to take advantage of the trends I've seen building.  I'm a broke homeless guy now, and it's easy to make the case I have no clue what I'm talking about, despite some pretty solid predictions over the last couple of years.  I've been watching and studying financial markets, and several long term social trends that affect them, for 30 years now.  This, right now, is the biggest part of the downturn we're heading into, in my opinion.  I think the rest of 2022, 2023, and 2024 will be the craziest years of this recession and in business and financial worlds.  But I don't want you to take my word for it.  

In this post, I'm putting several links of talks and interviews by actual, respectable, mostly really wealthy, investors, econmists, and economic analysts.  What they're all saying in the last month or two is getting pretty similar.  Check out any of these that interest you, and their thoughts on this recession.  This will give you a better picture of where we're at, to gain a much better understanding of what's happening now, and what will likely happen in September 2022, and the months and years beyond.  

Mohamed El-Erian- CNBC TV interview August 29th, 2022- 5:43

Summer is Ending, Our Experts are Forecasting a Big Fall- Daniela Cambone/Stansberry Research- edit of several interviews from the summer of 2022- August 26, 2022- 13:55

The Fed Wants to Crash the Markets and Bankrupt Households- Joe Brown/Heresy Financial looks at Jay Powell's remarks from August 26th, and explains where he sees The Fed's stance will take us in coming months, August 26th, 2022

The Housing Crash is Here (50% drop in sales)- Adam Taggart of Wealthion interviews Nick Gerli of Reventure Consulting- August 24th, 2022- 44:05-this is part 2 of this interview, Part 1 is on Nick's channel, and is linked at the end of this video

Fed to Slow Rate Hikes as Housing Market Squeeze Looms- Daniela Cambone interviews Nomi Prins- August 19th 2022- 22:25

Mohamed El-Erian- "The Risk of Recession is High and Getting Higher"- Yahoo Finance, uploaded August 6th, 2022- 33:32

"People don't know what's coming"- Ray Dalio's last warning- August 18th, 2022-32:55

The Crash of a Lifetime- Rich Dad Radio- Robert and Kim Kiyosaki interview Harry Dent- 46:08

"The Scary Truth About the Next Economic Collapse"- Gary Vaynerchuk- edit of several Gary Vee videos- March 12, 2022- 13:03

Jim Rogers on Wealth and the Current Economic Climate- Interview by Michelle Jamriskoat-Bloomberg Live- August 4th, 2022- 19:39

These are a few of the best minds in economics, investing, and business in todays world.  These are only a few of the many people sharing similar ideas, in the last few weeks and months, and are ones I believe really have some solid thoughts to share.  

If you want to get an idea of the future of the financial markets and business climate, look at the best minds looking forward, who actually run a business or have a history of making money actually investing (not trading). Generally speaking, they see asset bubbles and more pain ahead financially.  But that also means there are amazing bargains coming, at some point, when stocks, crypto, real estate, precious metals, and other assets hit bottom.  

But for most people, recessions mean a struggle to pay bills, with credit card, car/truck, student, and home debt, that they owe, becoming a much bigger issue than in good economic times.  Most people struggle through recessions, some worrying about losing jobs, finding a new job when they get laid off, and cutting back on expenses at home.  For some reason, few average people want to think about a coming recession, much less prepare for one, yet there will always be another one before long.  

One huge thing that is different about 2022, compared to previous recessions, is we now have the internet, and in particularYouTube, many popular platforms of social media, and all kinds of people doing research and putting out information about what is happening in the financial and business worlds.  The internet was around in 2007-08, but we didn't have the huge amount of content creators we have now, and social media was still pretty new to most people.  The level of communication between people now means that there are far more smart minds out there, researching, thinking, and talking about what's going on, than during the Great Recession.  

Yes, we had the recession of 2020, technically a short depression, but the pandemic caused downturn, and The Fed's response, kept it from being the recession it should have been.  Things got all out of whack with $5-6 trillion of new money flooding the economy, and millions of people turning into Stimulus Ballers for a while.  So now we get the more traditional recession that should have happened then, with high inflation heading in, as an added bonus.  

The level of good information available, and our hyper-connected level of communcation with each other now will change the way this recession plays out.  Yes, there is a lot of bad information out there, but there is also a lot of good information out there.  When you watch videos or read blogs and articles, look at someone's background.  If they're older, and have been successful at business or investing through several recessions, like Ray Dalio, Jim Rogers, Robert and Kim Kiyosaki, and Nomi Prins, in the videos above, they usually have some solid advice and thoughts.  Don't believe every word they say, but take a successful background as a sign that they have learned a lot over the years.  When several established business people start saying very similar things about where the economy is going, then it's smart to take them pretty seriously.  Then do your own thinking.  Check with other experts, see what they say.  This will help give you a better idea of the Big Picture of the world of investments and business, and hopefully help you make better decisions in your life.  That's the point here.  

This blog post, and all of mine about business, economics, and investments, is for your entertainment and education, and should not be taken as investment advice.  My full Disclaimer for this blog is linked above.  

Where the housing market is right now nationwide: Adam Taggart interviews Nick Gerli

If you have read my blogs on a regular basis, you know I've been writing about a crazy economic downturn that I saw coming, for 3-4 years now.  OK, now we're almost two years into the craziness, now heading into what I believe will be the worst couple of years of this decade (late 2022 through mid 2024).  

Real estate has been insane for two years, through the pandemic, for several reasons.  It seems to be beginning to head back down, towards some sense of reality now.  This 44 minute video is the best I've seen that shows an overall look where the residential real estate market is right now.  Nick Gerli digs into the realtime data, and explains what that's telling us.  If you have any interest in real estate right now, or over the next year or two, watch this video.  This is part 2 of this interview, here's Part 1, which is on Nick's channel, Reventure Consulting.  In Part 1, they go more into the macro economic trends happening, and this video above focuses more on residential real estate in the various areas of the U.S. right now, late August 2022.  

Daniela Cambone interviews Nomi Prins on inflation, The Fed, and our distorted economy

Nomi Prins was one of the first women quants (aka super math geeks) to work on Wall Street, and worked at Bear Stearns, Lehman Brothers, and Goldman Sachs in their heyday.  She then got tired of some of the tactics used on Wall Street, and became a self-directed financial journalist, writing several serious books about the economy, and the financial world, in the 21st century.  Her new book, Permanent Distortion is due out in October.*  This interview is very recent (August 16, 2022), and Nomi speaks about inflation, The Fed, and where our financial world may be headed right now.  This is a great look at where we are now, as inflation may be peaking, but is still incredibly high.  Nomi gives incredible insights into inflation the the business climate of the coming months.

*Not a paid link.  

Two good videos to watch about the future of stocks and real estate

It's July 27th, 2022, and the stock market is surging up after the The Fed announced a .75% hike in the Fed Funds rate, which sets the pace fo rall other interest rates.  Have stocks hit bottom, and they're going to head back up?  Or is this a bear market bounce?  This video takes a really solid look at those questions.  Check it out if you are wondering about the direction of stocks over the next 6 -12 months.  

What about real estate?  Are we in for a minor correction overall?  Or is there a major downturn coming?  This is a great video, also brand new, that looks into the mid-term and long term demographics affecting real estate.  If you're wondering where it might be headed, check this video out.  

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Could be a rough week for stocks and crypto- 7/15/2022 to 7/29/2022

Mohamed El-Erian is one of the few people you really want to listen to on the direction of the economy.  He's been saying for many months that The Fed was behind the curve on attacking inflation.  That had him worried that they would have to "slam the brakes on" at some point, raise interest rates dramatically, and... here we are, at that point.  

Disclaimer for this blog

The F.O.M.C. meeting (Fed governnors), is Tuesday and Wednesday, July 26 & 27, and they are expected to announce a .5% to .75% hike in the Fed Funds rate Wednesday afternoon.  But the recent, much higher than expected inflation rate, has led to rumors of a 1% interest rate hike.  That would be historic, and the stock markets could react poorly, particularly after this recent rally.  At this point, a .75% hike in the Fed Funds rate seems most likely.  But someone seems to have floated a rumor that The Fed might lower rates, and go back into bail out mode for stocks (and everything else).  With inflation as high as it is, that seems pretty much impossible.  That would just drive inflation much, much higher.  

Then, at close of the stock market on Thursday, July 28, Apple will announce its earnings, followed by its quarterly conference call.  Because of the way both the Nasdaq and the S&P 500 are weighted, Apple has a huge effect on both, and has been holding up both averages during this summer's tech bear market, though down around 14% recently, from the peak.  But signals are that Apple expects lower earnings and slower growth in future months, for multiple reasons.  If Apple's numbers and conference call are worse than the expectations of traders, than that could also have a big, negative effect on the markets.  If stocks take a dive, which is very possible, crypto could do the same thing, and drop back some as well. 

These two things give the potential for a really negative week in stocks, and some carry-over negativity in crypto.   

Blogger's note- 7/28/2022- 2:30 pm, Pacific time, 5:30 Eastern- So...  Stocks dropped some Monday and Tuesday, before the FED (FOMC) meeting announcment.  On Wednesday, The Fed hiked the interest rates by .75%, making loans of all kinds more expensive and harder to get for everyone, and the stock market rallied.  Today, Thursday morning, we found out that, yes, by the actual definition, we are in a recession, two quarters of GDP contraction.  But it doesn't matter, because Uncle Jay and Aunt Janet say that there isn't REALLY an actual definition of "recession."  Stocks rallied again, since the economy will get worse, but we don't call recessions recessions anymore.  

Then after market close, Apple beat earnings, crisis averted, so everybody pile into the rally tomorrow!  Maybe.  If you own stocks, just follow the rabbit down the hole and smoke whatever the worm on the mushroom is smoking, and life will be great.  Just don't try to sell your house for the price they sold for 3 months ago, if you're market was hot last year.  Tragedy avoided, and I feel like I've walked into a rave where everyone is on E but me.  New soundtrack for stock trading...  Hey, it's the end of July, we have five months left in 2022, and I'm sticking with my March 22, 2022 predictions for stocks.  But who cares? Nobody reads these updates.  Time will tell what happens.  And whatever you do, don't listen to Ray Dalio, Jim Rogers, Robert Kiyosaki, or Michael Burry.  And here's Joe Brown of Heresy Financial, making fun of people saying this recession is not a recession.  Absurd, yet flacid.

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