The Dow Dives 750 Points Because a Recession Signal Is Flashing Red

[Elderberry]

Ben Walsh,Barrons.com•August 14, 2019

 Recession Worries. All three major U.S. stock market indexes fell sharply as the U.S. Treasury market flashed a recession warning and weak economic data from China and Germany added to investors’ concerns.

The Dow Jones Industrial Average and the S&P 500 were both off 2.8% in afternoon trading, while the Nasdaq Composite had lost 3.1%.

More: https://www.barrons.com/articles/dow-jones-industrial-average-fell-because-of-a-recession-red-flag-51565800315?siteid=yhoof2&yptr=yahoo

[Applewood]

Yup!  There goes the supposedly great economy.  People scoff at my fits over the stock market dipping every Trump moves a muscle, but it's not just the stock market that is jittery.  This trade war and Trump's game playing is going to cost everyone something sooner or later. 

Ah, but I'm not supposed to be worried about my future -- that's selfish.  Even if I lose everything, it's a small price to pay for making America great again.  Or something.     

[IsailedawayfromFR]

Yup!  There goes the supposedly great economy.  People scoff at my fits over the stock market dipping every Trump moves a muscle, but it's not just the stock market that is jittery.  This trade war and Trump's game playing is going to cost everyone something sooner or later. 

Ah, but I'm not supposed to be worried about my future -- that's selfish.  Even if I lose everything, it's a small price to pay for making America great again.  Or something.     

You really need to find something less stressful to dwell on.

Or perhaps a drink.

[Cyber Liberty]

More of a yellow than a red, and Trump's reelection will probably be scotched if that light actually goes red in the next few quarters.  A Recession is defined as, what, two consecutive quarters of negative GDP growth? 

Rats are sure to play the expectation card, and declare a recession even with positive growth.  The press will help, as they did with Bubba Clinton in 1992 when a Recession was actually over 3 quarters before the Election.  Unfortunately, GDP growth is a lagging indicator.

[Cyber Liberty]

You really need to find something less stressful to dwell on.

Or perhaps a drink.

My private bar at the Castle is open 24/7.

[Applewood]

You really need to find something less stressful to dwell on.

Or perhaps a drink.

I have to care about my future.  I don't have great amounts of wealth I can afford to lose or to throw around. 

You think you are secure.  Maybe you don't have much stock. But what you and others don't understand is that Trump's game playing is about to cause a recession.  And that recession will hit everyone no matter what kind of investment or retirement strategy you have.  It's also going to cost you in your everyday life too.  Consumer goods will become more expensive.  Real estate is already hitting the skids.  And that artificially low unemployment figure is about to rise.  BLS won't be able to fudge the numbers enough to hide the increase. 

The warning signs are there.  If you choose to ignore them and put all your trust in your orange god, that's your business.  Just don't come to me with a tin cup begging me for scraps when your income ends up in the toilet.  I will be too busy looking for my own next meal. 

[Cyber Liberty]

Something I learnt about wimmins a while ago.  If you say "Calm down," she'll calm right down....

[EdJames]

I have to care about my future.  I don't have great amounts of wealth I can afford to lose or to throw around. 

You think you are secure.  Maybe you don't have much stock. But what you and others don't understand is that Trump's game playing is about to cause a recession.  And that recession will hit everyone no matter what kind of investment or retirement strategy you have.  It's also going to cost you in your everyday life too.  Consumer goods will become more expensive.  Real estate is already hitting the skids.  And that artificially low unemployment figure is about to rise.  BLS won't be able to fudge the numbers enough to hide the increase. 

The warning signs are there.  If you choose to ignore them and put all your trust in your orange god, that's your business.  Just don't come to me with a tin cup begging me for scraps when your income ends up in the toilet.  I will be too busy looking for my own next meal.

With all seriousness, you need to seek a competent investment advisor.

If you are retired and/or on a fixed income, you should have very little risk exposure.

And for everyone, it make no sense to have a great deal of unguarded exposure in equities at this point in the cycle. 

(These daily ups and downs in the major equity indices should be in the category of "interesting news," not anything for you to be worried about.)

[Cyber Liberty]

With all seriousness, you need to seek a competent investment advisor.

If you are retired and/or on a fixed income, you should have very little risk exposure.

And for everyone, it make no sense to have a great deal of unguarded exposure in equities at this point in the cycle. 

(These daily ups and downs in the major equity indices should be in the category of "interesting news," not anything for you to be worried about.)

I'm out now, but I was sweating it 2-3 years ago when Trump took office.  It was unknown (to economists) what effect that would have.  I violated my 5-year investment horizon accidentally by retiring two years earlier than planned.  As it turned out, I made out fine.

[EdJames]

I'm out now, but I was sweating it 2-3 years ago when Trump took office.  It was unknown (to economists) what effect that would have.  I violated my 5-year investment horizon accidentally by retiring two years earlier than planned.  As it turned out, I made out fine.

 

[Cyber Liberty]

 

We're good, now that we got our Castle.  I got lucky.  I'm risk-averse, so that wasn't a good time for me.

[InHeavenThereIsNoBeer]

More of a yellow than a red, and Trump's reelection will probably be scotched if that light actually goes red in the next few quarters.  A Recession is defined as, what, two consecutive quarters of negative GDP growth? 

Rats are sure to play the expectation card, and declare a recession even with positive growth.  The press will help, as they did with Bubba Clinton in 1992 when a Recession was actually over 3 quarters before the Election.  Unfortunately, GDP growth is a lagging indicator.

Technically, a recession is defined as when the BEA says it is.  I believe the 'two consecutive quarters of negative GDP growth' is an older definition.

[InHeavenThereIsNoBeer]

With all seriousness, you need to seek a competent investment advisor.

If you are retired and/or on a fixed income, you should have very little risk exposure.

And for everyone, it make no sense to have a great deal of unguarded exposure in equities at this point in the cycle. 

(These daily ups and downs in the major equity indices should be in the category of "interesting news," not anything for you to be worried about.)

Yep.   20 years from now, the Dow won't be 750 points lower than it would have been if not for today.

[Bigun]

I'm out now, but I was sweating it 2-3 years ago when Trump took office.  It was unknown (to economists) what effect that would have.  I violated my 5-year investment horizon accidentally by retiring two years earlier than planned.  As it turned out, I made out fine.

I got out the day after Obama was elected and do not regret that for one second.

[corbe]

   Who hired this Powell guy?   

Trump hits 'clueless' Fed chair, 'crazy inverted yield curve' after stocks plunge

By Brett Samuels  - 08/14/19 03:43 PM EDT 

President Trump on Wednesday slammed Federal Reserve Chairman Jerome Powell, calling him "clueless" as stocks took a dive amid looming signs that a recession could be on the horizon.

The president spent part of his day hammering away at the Fed and defending his trade policy toward China, but escalated his attacks when he personally targeted Powell and blamed the central bank for any economic woes.

"Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve," Trump tweeted from his golf club in New Jersey.

"Germany, and many others, are playing the game! CRAZY INVERTED YIELD CURVE! We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!"

<..snip..>

https://thehill.com/homenews/administration/457448-trump-hits-clueless-fed-chair-crazy-inverted-yield-curve-after-stocks

[thackney]

   Who hired this Powell guy?   

Only the best....

[rustynail]

Worse than ought eight.  The Congress needs to return now!

[Bigun]

It's really hard to know which is the worst of the evils foisted upon us in 1913 under Woodrow Wilson. 

Is it the Fed, the Marxist income tax,  or the 17th amendment?

[Cyber Liberty]

Technically, a recession is defined as when the BEA says it is.  I believe the 'two consecutive quarters of negative GDP growth' is an older definition.

It's still a rule of thumb, in the economic sense:

A recession is the contraction phase of the business cycle. It begins after the economy reaches a peak of activity and ends as the economy reaches its trough. The National Bureau of Economic Research (NBER) describes it this way:

'A recession is a period of decline in total output, income, employment and trade, usually lasting six months to a year and marked by widespread contractions in many sectors of the economy.'

A common rule of thumb for recessions is two quarters of negative GDP growth.

https://study.com/academy/lesson/recession-vs-depression-definitions-and-differentiation.html

In political terms, however, it means what you say..."when the BEA says it is." 

[EdJames]

I got out the day after Obama was elected and do not regret that for one second.

I averaged out over time with no regrets as well.

[EdJames]

It's really hard to know which is the worst of the evils foisted upon us in 1913 under Woodrow Wilson. 

Is it the Fed, the Marxist income tax,  or the 17th amendment?

1913, a very bad year.
Woodrow Wilson, a very bad man.

 

[Cyber Liberty]

I got out the day after Obama was elected and do not regret that for one second.

We're in the "out club!"   

[Bigun]

1913, a very bad year.
Woodrow Wilson, a very bad man.

 

 

[Applewood]

With all seriousness, you need to seek a competent investment advisor.

If you are retired and/or on a fixed income, you should have very little risk exposure.

And for everyone, it make no sense to have a great deal of unguarded exposure in equities at this point in the cycle. 

(These daily ups and downs in the major equity indices should be in the category of "interesting news," not anything for you to be worried about.)

I have a good financial adviser and I have a mix of investments.  Problem is that I'm 66 and thanks to some bad advice, bad decisions, an initial period in my working life where I had no control over my pension (my employer invested in mutual funds that went nowhere) and Clinton's supposed great economy in the 1990s and that I had to leave the workforce much sooner than I anticipated (disability) -- I don't have a whole lot of money to play with.  So yes, even at my age I still have to have some growth in order to be able to afford to live a while longer. 

But you and so many others are just not getting it.  I don't care how financially secure you think you are.  You aren't.  And much of that lack of security is the result of a president who is playing games with our future.  He can blame the fed chairman and a whole bunch of other people all he wants, but a collapse is coming and when it does, it will be mostly traced back to him and his whims.

[InHeavenThereIsNoBeer]

It's really hard to know which is the worst of the evils foisted upon us in 1913 under Woodrow Wilson. 

Is it the Fed, the Marxist income tax,  or the 17th amendment?

I'd put them in that order, with the Fed as the worst, worse than the other two combined (which is significant in my book, because I think those two play off each other so powerfully).

Folks can argue about income vs consumption vs tariffs vs blahblahblah.  At some point, we need to fund the monster.  But debasing the currency, as a mandate, is just outright theft.