Author Topic: Has The Grand Experiment Killed Cycles?  (Read 2729 times)

RuleNumberOne

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Re: Has The Grand Experiment Killed Cycles?
« Reply #20 on: February 06, 2020, 09:55:22 AM »
One security blanket that current investors have is indexing. They feel they are diversified and the index averages a 15% return every year. All the people i talk to who are fully invested use indexing. They shovel all their savings into the index and stay fully invested at all times. They see everyone else doing the same thing and it makes them feel warm and cozy.

Europe is actually a bad sign of what can happen. They have had negative rates for years but the economy only keeps getting worse. They have no way of getting out of their slump and rates are already at -0.4%. And i suspect companies and people in Europe noticed that a few quarters ago - that they have no way of getting out of their slump.
 
I talked to someone yesterday who had been working in silicon valley during the dot-com bubble and was also investing in the stock market of 1999-2000. He was of the opinion the yield curve does not matter much. He thought panic could be triggered by either a tightening of venture capital or a layoff announcement from a prominent company.


RuleNumberOne

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Re: Has The Grand Experiment Killed Cycles?
« Reply #21 on: February 06, 2020, 09:31:29 PM »
Strange times. DAX index is at an all-time high even as industrial orders keep going down. ECB chief Lagarde says the ECB has nothing left but that only makes the market go up even more. Hubris-filled central bankers have destroyed free markets.


https://www.bloomberg.com/news/articles/2020-02-06/lagarde-warns-ecb-has-limited-options-to-fight-lingering-threats

"The warning came just hours after data showed a huge drop in Germany factory orders, indicating the manufacturing recession in Europe’s largest economy is far from over.

Lagarde told European Parliament lawmakers on Thursday. “This low interest rate and low inflation environment has significantly reduced the scope for the ECB and other central banks worldwide to ease monetary policy in the face of an economic downturn.”

https://www.reuters.com/article/us-germany-economy-industrial-orders/german-industry-orders-slump-on-weak-euro-zone-demand-outlook-subdued-idUSKBN2000QA

Contracts for ‘Made in Germany’ goods fell 2.1% from the previous month, the Statistics Office said. That was the biggest drop since February and compared with the Reuters consensus forecast for a 0.6% rise.