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2022-09-02

Everyone, from corporate CEOs to investors, is too focused on the still decent nominal data...

 ... when the inflation-adjusted numbers tell a more dire story

 Wall Street doesn’t care about real results so why should they? 

Corrected for inflation, real wages have declined 

Since March 2021, nominal retail sales have risen 6.9% but are down 4.1% in real terms.

Dow Jones, in nominal terms, oscillated around the 1,000 level from the late 1960s to the late 1970s, in real terms it plunged 73.1% from January 1966 to July 1982.


The 5% increase in S&P 500 earnings that Wall Street analysts forecast for 2022, as reported by S&P Global, will amount to a real decline. 

My earlier forecast of a 40% total drop in the S&P 500 from the early January peak is still relevant. 

 Gary Shilling Bloomberg 2 september 2022 

https://www.bloomberg.com/opinion/articles/2022-09-02/wall-street-is-in-denial-over-the-real-economy

Gary Shilling is author, most recently, of “The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation,” 


“the market can remain irrational longer than you can remain solvent.”

The man who actually said it 36 years ago, Wall Street veteran Gary Shilling, is no slouch at the dismal science himself and, unlike Lord Keynes, is still with us at age 85. He has some opinions about how rational the recent stock market rebound 

https://englundmacro.blogspot.com/2022/08/the-market-can-remain-irrational-longer.html


Lots of people suddenly seem to be asking whether we are in for a repeat of the miserable markets of 1966-82.

I don’t think so, but the best investors always consider the worst-case scenarios. 

On Feb. 9, 1966, the Dow Jones Industrial Average closed at 995.15. On Aug. 12, 1982—16 ½ years later—the closing value of the Dow bottomed at 776.92. 

Jason Zweig  WSJ 2 September 2022 

https://www.wsj.com/articles/stock-market-inflation-best-performance-11662130645


Vad var det då, frågar man sig, som hände fredagen den 13 augusti, som satte fart på världens aktiebörser. 

Jo, det som hände den dagen var att Mexiko förklarade att man inte längre kunde betala sin utlandsskulder. Det var /den dåvarande/ skuldkrisens födelsedag 

Paniken stod på lur, sammanbrott hotade västvärldens banksystem. 

Jag har skrivit en bok om det.

https://www.internetional.se/re82bok.htm


Den amerikanske centralbankschefen Paul Volcker agerade snabbt, fixade fram några kortfristiga miljarder dollar från kontot för strategisk lagring av olja och betalade Mexiko i förskott för framtida oljeleveranser.

Men han gjorde inte bara det. Han satte också högsta fart på de amerikanska sedelpressarna.

https://englundmacro.blogspot.com/2022/05/volcker-if-i-had-known-what-was-going.html


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