sure, the war. They think we are idiots.
The war and the virus, donât forget the killer virus.
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The demand side was not crushing. People got even checks from government to increase the demand. Printing money fueled the demand even more. Everything happened while restricted supply by broken supply chains. Result was obvious to predict - if you have more and more money in the economy chasing fewer and fewer goods. Itâs econ 101 recipe for inflation.
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I think the main difference was that in 2008 people got scared and nobody wanted to spend money - it was a demand crisis and for such recessions expansionary policies can help. In 2020-2022 people had no issue with spending money - it was a supply crisis. In such scenario expansionary policies overheat the economy.
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Could it be that another difference was that in 2008 whomever individual or company that went bankrupt the government let them down (except the big banks). Lost your job? good bye. Lost your house? good bye. Your 50 employee company bankrupted? Bad luck, it is the capitalism.
Whereas with the 2020-2022 almost everyone has been subsidized to compensate for the virus lockdowns.
Thinking out loud.
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If you have a hammer in your hand everything looks like a nail. For them every economic problem looks like a demand problem.
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This might be more about lack of tools/effective social safety net in the US. I donât think the primary purpose of the economic impact payments (aka stimulus checks) were to increase demand, but instead to relieve hardship due to unemployment/reduced hours. (But it does have quite a demand impact since itâs indiscriminate).
Unlike Europe, I guess the US couldnât (= not able to technically, or politically) just pay for reduced work-time, which seems to me the most efficient way to keep workers employed during a short-lived stress with lots of unknown. (With low interest + loan to keep business afloat)
And then they misjudge the size of the recovery plan most likely esp. given the war that started afterwards and impact on energy/food price, but itâs easy to say in hindsight.
But that still wouldnât mean that doing nothing would have been better, the counterfactual of doing nothing is a broken economy with mass unemployment that seems pretty undesirable for keeping a country stable.
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Well, if you have ultra-inflationary policy donât be surprised that you produced inflation. God thank that Bidenâs Build Back Better was stopped by some rational Democrat. We would have an Inflation tsunami with this crap.
Thatâs another nonsense. Even left-wing economist like Lawrence Summers were telling everyone that we will end up with high inflation. Not speaking of more conservative economists.
Another nonsensical argument. Itâs like saying: we screwed up the economy - but if we didnât do it, it would be even worse, likely another Great Depression. How about alternative of applying correct macroeconomic tools and policies to correct situations - something that rational economists were promoting since forever.
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Care to explain the counterfactual scenario?
How about focusing on the actual problem - fixing supply chains, ban lockdowns, rolling back terrible Bidenâs energy policies to increase energy production, and in general improve economic growth - increase the production of goods and services, moderate the demand side and keep monetary expansion reasonable.
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The pandemic was also part of the problem (and the main reason for the state of the economy)
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To larger extent it was the response to the pandemic rather than pandemic itself that is source of the problem.
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It may not apply to the US but Switzerland wouldnât have much inflation if it wasnât for raw materials, food and fuel. The war made fertilizers and fuel less available, it has an inflationary impact on the global market.
I get your point, though, inflation was out of hand in the US before the war and monetary and fiscal policy had to do with it, though supply chain constraints did too. It isnât an easy field to navigate, the FED is staying adaptative and is now ramping up its answer, weâll have to see where all of this leads.
Speaking of when do we reach the bottom of the dip. Has anybody here some insight on where we are standing on a bankruptcies point of view? 2001 had 9/11, 2008 had Lehman Brothers, Iâm not sure weâre not close to the bottom (or havenât reached it already) if we are not facing some other major event to precipite another leg down.
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Same suspicion here.
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Hey, do you mind providing the link where you got that graph from? Super interesting. I would have never imagined Swiss biggest customer was the US.
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I thought I will share this story here. Take whatever you want from it.
https://seekingalpha.com/article/4523903-buyandhold-2012-grew-4k-to-87-million-advice-for-you
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Interesting thanks.
Some observations:
- He over performed S&P doing stock picking
- itâs quite exceptional to start investing at 14 and in the 1970
- His list of stocks seems an ETF
- This works until the market stops to go higher
- Now millennials want to be reach overnight
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So, using dividend adjusted VT in CHF, at the end of July we are 6 weeks after and 9.1% higher than the minimum from June 17th.
Will we see another +10% rally next weeks? Or another crash to -30% from ATH? I donât know. I have an opinion that if the situation doesnât change to worse dramatically, we should go up until the end of the year. But I am not acting according to my opinion. I still have around 20 years to go, I have a strategy, I have a target assets allocation and I am going to follow them no matter what.
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VT +2% today⊠what happened?
I think some positive US inflation reportâs got out, but you never know what causes the random market-beast to move.
I hope for a wild bull run until I have some more dry powder, then Iâd like a short but dramatic correction to invest it 
Just canât help my market timing misbehaviourâŠ
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