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Duke Mu said:
DJA is back to end of Biden term levels

S&P was about 6100 when Trump took office

NASDAQ was about 20,000

Investors are betting that Trump will TACO on Tariffs and the economy can slowly grow short term. However, this BBB is an economy killer long term.
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looks like the Dow has not returned to where it was when Biden left office... down about 1%

looks like the NASDAQ is up about 2%

looks like the S&P is up about 2%
 
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Universal basic Income is going to have to be a thing very soon. Also I am glad the entire education system dropped everything for STEM education as we pour more and more young people into fields that won't be hiring hardly anyone ever again.


gizmodo.com

CEOs Are Quietly Telling Us the Truth: AI Is Replacing You

They say AI is just a tool to help workers. But read between the lines, and the message is clear: your job is already on the line.
gizmodo.com gizmodo.com
 
altmin said:
Universal basic Income is going to have to be a thing very soon. Also I am glad the entire education system dropped everything for STEM education as we pour more and more young people into fields that won't be hiring hardly anyone ever again.


gizmodo.com

CEOs Are Quietly Telling Us the Truth: AI Is Replacing You

They say AI is just a tool to help workers. But read between the lines, and the message is clear: your job is already on the line.
gizmodo.com gizmodo.com
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This is literally the only reason I can think of that the markets are doing what they're doing right now. The expectation of imminent and rapid productivity increases and cost reductions must be outweighing all the negative indicators.
 
lawtig02 said:
This is literally the only reason I can think of that the markets are doing what they're doing right now. The expectation of imminent and rapid productivity increases and cost reductions must be outweighing all the negative indicators.
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I guess.

Sure, AI has the potential to explode productivity, but was that not the case in April when the market tanked 15%(?)? Sure, the political and policy conditions right now aren't the same as April, but right now remains a regressive economic environment.

Additionally, as corporations tithe mass layoffs at the alter of AI gods, who's buying their products? All AI does is further concentrate wealth into the upper 0.0001%. Appears to me, the market isn't particularly rational from perspectives beyond ~ the next 1hr, 1day, and 1 quarter.

If AI really is the answer to the market's performance, the market isn't pricing in the massive social and political entropy that comes with a once in a century level reordering of work and income, AND the current state of politics, where ruthless, heartless cruelty is a principle.
 
Healing said:
I guess.

Sure, AI has the potential to explode productivity, but was that not the case in April when the market tanked 15%(?)? Sure, the political and policy conditions right now aren't the same as April, but right now remains a regressive economic environment.

Additionally, as corporations tithe mass layoffs at the alter of AI gods, who's buying their products? All AI does is further concentrate wealth into the upper 0.0001%. Appears to me, the market isn't particularly rational from perspectives beyond ~ the next 1hr, 1day, and 1 quarter.

If AI really is the answer to the market's performance, the market isn't pricing in the massive social and political entropy that comes with a once in a century level reordering of work and income, AND the current state of politics, where ruthless, heartless cruelty is a principle.
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1. I'm WAY outside my area of expertise on this, so I may be wrong about all of it.
2. Good point about April, although that was before we realized TACO.
3. I have a very strong hunch the market doesn't give a shit about the social and political entropy that's coming.
 
lawtig02 said:
3. I have a very strong hunch the market doesn't give a shit about the social and political entropy that's coming.
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I grossly agree, however, I wasn't clear - when wealth concentrates to absurd levels, on top of already unprecedented concentration, who are the customers? I would say, "oh, well, this is where UBI and socialized healthcare come into play", yet, see comment re: ruthless and cruel political environment.
 
lawtig02 said:
1. I'm WAY outside my area of expertise on this, so I may be wrong about all of it.
2. Good point about April, although that was before we realized TACO.
3. I have a very strong hunch the market doesn't give a shit about the social and political entropy that's coming.
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You're right that they don't care about what's coming, but they ought to. You take away millions of jobs - including many if not most white-collar occupations - and you're looking at massive social and economic unrest, instability, and likely violence that we haven't seen since the Great Depression. And as Healing said, who is going to buy all of these AI-made and generated products and services if more and more people don't have a job? Stockbrokers may likely start to care about AI economic disruption when we have riots of hungry people in the streets and they become a target of those who have been left with nothing. As for Universal Basic Income, good luck trying to implement that when Trump Republicans are at this very moment gutting existing social and welfare services left and right.
 
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lawtig02 said:
1. I'm WAY outside my area of expertise on this, so I may be wrong about all of it.
2. Good point about April, although that was before we realized TACO.
3. I have a very strong hunch the market doesn't give a shit about the social and political entropy that's coming.
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1. Trying to predict or explain the short-term market movers is a fool's errand. If it was predictable or explicable, someone would have put that predictability in their pocket and then it's not there any more for us to ponder.

2. It's especially a fool's errand when it comes to the United States at this point in history. That's because of the weird and counter-intuitive possibility that US assets will increase in market value even as their asset quality degrades. I've mentioned the multiple equilibrium problem before: let's assume that the US will default on the debt by December. Which way should the market move?

Well, the more natural intuition would be that the market will decline, because duh. And that's still a strong possibility. But it's also true that in panics, people flee to "safer assets" which, historically speaking, have been US Treasuries. Most trading is algorithmic based on historical and modeled dependencies. Those historical tendencies show that in times of distress, the right move is to sell your Vietnamese assets and buy US safe assets. This poses a huge dilemma for an investor, because the US collapse would cause a global panic. So as an investor, you have to think, "what will everyone else do in response to this news?" That's definitely what the trading algorithms are doing.

OK, so how do you price the US assets. If you think that most people are going to use historical correlations, then US assets would increase in value during the disruption and thus you should buy those assets, not sell. We're now deep in game theory. Every single person could think the assets are valueless, but still buy them on the expectation that others will find the assets valuable. This is what used to happen with corporate takeovers, where tender offers could be successful at prices that every single investor thought too low -- and it's why the front-loaded tender offer was made illegal by the Williams Act. On the other hand, it's possible that people will recognize that even US Treasury bonds are shit assets if there's been a default, in which case you'd expect the market to decline. So what to do if you expect a collapse? Ah, tricky question.

Keep in mind also that there has never been a brisk trade in US-Treasury CDS, even though you'd think that would be one of the best securities to insure in that way. Well, I shouldn't say never because maybe it's a market that has come to life when I'm not paying attention, but as of five or ten years ago it wasn't. Why? Because it was thought to be like nuclear war insurance; you're never going to get your payout because the event will wipe out the ability of your counterparty to perform. Well, maybe we're seeing the flip side of that. Why worry about a US economic collapse? If it happens, we're all dead (figuratively speaking) anyway.

3. Remember what happened in the pandemic. The earnings of big companies shot up during and after. It's because they survived while many small businesses went bust. This happened in 08 also. Well, the earnings of small businesses are not publicly traded. If the retail sector suffers a downturn and declines by 10% in value overall, retail stocks could still gain because the big firms could pull all the customers who used to shop at local small business.

So a key variable in the equation is "how much of the economy will be publicly traded" and if that number goes up, the publicly traded sector can get more valuable even if the overall economy declines.

4. So I don't think it's all about or even primarily about AI. I very much doubt there are many people trading big $$ on the potential prospect of huge AI deployment that throws people out of work. The optimists say it will happen within two years (which is still an eternity in today's hyper short term market), but really? And even if it does, will the early adopters benefit from it? It might take a while to get right. Often, when technology is introduced, there's an edge case that was unanticipated and ultimately dooms the whole effort. Long Term Capital Management had an "arbitrage" strategy that worked super-well for years. But it didn't account for political actors, and thus when the Russian Duma did something LTCM did not expect (I don't remember the trade exactly, but I think it had to do with currency controls), the careful arbitrage it had set up blew up in its face and it lost money on both sides of its trade. It had to be bailed out. Same will likely happen with AI.
 
Wheels81 said:
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ADP data showed US private employers unexpectedly cut 33,000 jobs in June, badly missing expectations of around 98,000 jobs added. It was the first month of job losses in the private sector in over two years.

will be interesting to see the jobs report which is typically released on the first Friday of the following month which will be July 4th

will the report be released on a holiday 🤔
 
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