Meanwhile, this is probably a good time to explain why we’re so gloomy and doomy…
Where’s the recession?
Where’s the stock market crash?
Has the bear market turned into a bull market? Has the coming recession been upstaged by an approaching boom?
What’s the problem? Why spoil a good party by mentioning that the curtains are on fire and the police are at the door?
If you listen to the popular press, you might think the US’ finances are delightfully robust. Here’s Dan:
‘The NASDAQ just closed out its best first half of a year ever, with $QQQ up nearly 40%.’
A US$3 trillion apple
The financial writers are awe-struck. 2023 started out as one of the worst years ever. But instead of getting worse as everyone (including us!) expected…the year is half gone, and it’s still not half bad.
The broad stock market has still not recovered from its 2022 sell off. The Dow, now over 34,000, is still more than 1,000 points below the high set at the beginning of last year. But the bounce from last year’s lows has been impressive. The S&P 500 is up 14% so far this year. But the aforementioned NASDAQ gets top billing.
Fortune:
‘The rally in tech megacaps gained further traction, with the Nasdaq 100 notching its best ever first-half of a year and Apple hitting the US$3 trillion milestone.
‘Nearly US$5 trillion has been added to the value of companies in the Nasdaq 100 since the start of the year, with the tech-heavy gauge defying bubble warnings and jumping almost 40%…gains have been even more pronounced when narrowed down to the megacap space — which has soared 74%.’
In the economy, too, the press sees only pink cheeks and robust health.
Business Insider: ‘“Rolling recession” turns to “rolling expansion,” says top Wall Street economist’:
‘…stocks could be set to see a 2023 rally continue and broaden out beyond megacap tech shares in the second half of the year, according to a closely followed Wall Street economist.
‘“…look at those industries and sectors that have been depressed. They’re showing signs of recovering,” Ed Yardeni, president of Yardeni Research, said in a phone interview Friday afternoon.
‘Pent-up demand [for houses] has fuelled strength in the sector — and for home builders — despite mortgage rates that have risen toward 7%.’
Bidenomics inaction
The latest ‘data,’ says the press, is positive.
Employment…inflation…sales — it’s ‘all good,’ or so they say. And Joe Biden tells audiences what a great job he’s done; here’s a recent speech:
‘Bidenomics is working….
‘Today, the US has had the highest economic growth rate, leading the world economies since the pandemic. The highest in the world. (Applause.)
‘…we created 13.4 million new jobs. More jobs in two years than any president has ever — (applause) — made in four — in two.
‘And, folks, it’s no accident. That’s Bidenomics in action…’
Really? Is the economy really so good? Are stocks such good investments? Is there no reason for darkness and worry?
We’ll look more closely tomorrow. In preview, gloom makes a comeback!
By way of further explanation, here at Bonner Private Research, we tend to look on the dark side. Perhaps it is because of those many years we spent in a Baltimore ghetto. We hear corks popping; we duck to avoid the crossfire. We smell lilies; we look for the open casket.
The ‘big loss’
Or maybe it is just our sorry métier. You work all your life. You save your money. You invest it. After the age of 55, the worst thing you can do is to take the ‘big loss.’ It’s like a bad fall in the bathroom. Because it’s almost impossible to recover. You can still make profits. But you won’t have time to compound them substantially.
So, for most readers, missing a boom is much less of a problem than not missing a crash. Missing a boom is like taking a vacation; you can get back to work later. But get hit by a crash…wiping out half your money…and you may have to downsize faster and further than you intended.
Our number one goal here at Bonner Private Research is to try to understand what is going on. Washington promises to build a better world for you. Wall Street promises to make you rich. Our job is to make sure you’re not devastated when those promises don’t turn out.
We don’t mind being ‘too early’. And we forgive ourselves for being wrong sometimes. But we damned sure don’t want to be blindsided by a crash we didn’t see coming.
Regards,
 |
Bill Bonner,
For The Daily Reckoning Australia
