There is a ‘high probability’ the stock market will be ‘flat’ for an entire decade

Hawkeye10 said:
The West is dying and China is on the romp.
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I can imagine there were folks like you in the 80's, "the West is dying and Japan is on the romp" and their cars were outselling ours and they were buying up prime American real estate. We all saw how that turned out. You act like China is some infallible giant when it is not.
 
cawacko said:
I can imagine there were folks like you in the 80's, "the West is dying and Japan is on the romp" and their cars were outselling ours and they were buying up prime American real estate. We all saw how that turned out. You act like China is some infallible giant when it is not.
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I act like China has a plan, they do long term planning and can think things through, they have competent leaders, they are taking on corruption, and they have a society that is not in chaos......and we dont.

Performance Matters.
 
Chinese leadership has the support of the people generally, America's leadership generally dont....that matters especially when really bad times hit....for instance depression and famine and energy shortages.
 
The Chinese have a demographics problem in that their population is unusually old, this problem is even worse than they thought, and they are almost certainly making a colossal mistake with Zero COVID.....on the other hand American leadership has completely shredded their credibility over COVID with all of their lies and/or incompetence, and letting so many people in illegally and thus teaching them that our laws dont need to be followed by them even as the citizens are often hammered with laws destroys the social glue of America, so dont be so sure that CHina's problems put them at a disadvantage.
 
Primavera said:
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I hope that he's wrong but he has an awesome track record so who knows.

Stanley Druckenmiller, one of Wall Street’s most respected minds, argued that the pain won’t be temporary—and that stocks face an entire decade of sideways trading as the global economy goes through a tectonic shift.

“There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period,” he said in an interview with Alex Karp, CEO of software and A.I. firm Palantir.

Druckenmiller added that with inflation raging, central banks raising rates, deglobalization taking hold, and the war in Ukraine dragging on, he believes the odds of a global recession are now the highest in decades.

And given Druckenmiller’s track record, investors would be wise to heed his warnings.

The legendary investor founded his hedge fund, Duquesne Capital, in 1981, and routinely outperformed the majority of his peers on Wall Street over the coming decades, delivering an annual average return of 30% from 1986 to 2010, according to Yahoo Finance.

https://fortune.com/2022/09/15/stan...-warns-stock-market-flat-decade-central-bank/
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Isn't that about how long the Great Recession lasted? Of course, we did that to ourselves, whereas both the Pandemic and Putin's war were beyond our control...except for Trump's lies about both. LOL
 
Re China's old population: They have watched Japan manage well even though this was said to be impossible, and once they have achieved global domination they are sure that importing the labor they need will not be a problem.

I dont know that they are wrong.
 
Hawkeye10 said:
I act like China has a plan, they do long term planning and can think things through, they have competent leaders, they are taking on corruption, and they have a society that is not in chaos......and we dont.

Performance Matters.
Click to expand...

Take on corruption? They give lip service to it but place is still corrupt as all get out and they target entrepreneurs and others whom they deem to successful. And yeah, they've had success creating a bubble economy but we'll see how long it lasts.

I can imagine the same thing was being said in the 80's regarding Japan. Long term performance matters, not falling for a bubble period of success.
 
Primavera said:
.
I hope that he's wrong but he has an awesome track record so who knows.

Stanley Druckenmiller, one of Wall Street’s most respected minds, argued that the pain won’t be temporary—and that stocks face an entire decade of sideways trading as the global economy goes through a tectonic shift.

“There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period,” he said in an interview with Alex Karp, CEO of software and A.I. firm Palantir.

Druckenmiller added that with inflation raging, central banks raising rates, deglobalization taking hold, and the war in Ukraine dragging on, he believes the odds of a global recession are now the highest in decades.

And given Druckenmiller’s track record, investors would be wise to heed his warnings.

The legendary investor founded his hedge fund, Duquesne Capital, in 1981, and routinely outperformed the majority of his peers on Wall Street over the coming decades, delivering an annual average return of 30% from 1986 to 2010, according to Yahoo Finance.

https://fortune.com/2022/09/15/stan...-warns-stock-market-flat-decade-central-bank/
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That's absurd. Any economist worth his weight in salt will tell you It's an exercise in futility to try to predict what the stock market will do six months from now, let alone ten years.

The S&P has averaged gains of 7% annually. According to its track record over the last 100 years and the Rule of 72, it should double in ten years.
 
cawacko said:
Take on corruption? They give lip service to it but place is still corrupt as all get out and they target entrepreneurs and others whom they deem to successful. And yeah, they've had success creating a bubble economy but we'll see how long it lasts.

I can imagine the same thing was being said in the 80's regarding Japan. Long term performance matters, not falling for a bubble period of success.
Click to expand...

You are either lying or not paying attention.
 
Hawkeye10 said:
Whether you are lying or dont know what you are talking about, either way, you dont rate my time.
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I'm lying because you don't think the Chinese real estate bubble is real and won't have huge ripple effects throughout their economy?

What China has done to grow like they have over the past several decades is pretty amazing. At the same time peeling back the onion on how they did so shows there's no guarantee they continue near the pace they've been on. "Free money" eventually runs out.

But for those who want to ride the Chinese train as long as they can are free to do so.
 
cawacko said:
I can imagine there were folks like you in the 80's, "the West is dying and Japan is on the romp" and their cars were outselling ours and they were buying up prime American real estate. We all saw how that turned out. You act like China is some infallible giant when it is not.
Click to expand...
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China's is looking pretty precarious these days, I doubt that they will be able to carry as before. A financial meltdown is looking almost inevitable.

China: Decades Of Growth Ended By Debts

China’s GDP growth rate continues to slide and its bank failures are growing. The government has stopped announcing annual GDP growth rates and is now announcing it will make its best effort to keep economic growth going. Those efforts are concentrating on preventing a collapse of the financial system. Unofficially, the government expected 5.5 percent growth in 2022. Foreign economists estimate a more realistic 3.5 percent growth.

China’s economy was already slowing down when the current covid19 government shutdown of Shanghai and a growing number of cities made matters worse. There is also an unresolved real-estate bubble and more Chinese banks are suffering liquidity (cannot meet demands for withdrawals) problems. The economic damage done by all this led to a $5 trillion dollar stimulus program to alleviate suffering among workers and provide businesses with cash needed to keep operating. The actual decline in GDP growth is a state secret but is believed to be bad enough to produce GDP shrinkage and an official end to the decades of high GDP growth. China’s economy is, at $18 trillion (or less) a year, the second largest in the world. The Americans have economic problems but not to the extent China suffers from.

This is mainly about the size of their $117 trillion (before the new stimulus) government debt, which is nearly four times the size of the U.S. debt. This Chinese debt is 6.5 times GDP while the American debt of $29 trillion is 1.26 times GDP. It’s worse when you take population size into account. China has about four times the population of the U.S. meaning the average Chinese has about 16 percent of the income of an American while carrying far more government debt per capita. Much of that debt comes from millions of housing units built by local governments that not enough Chinese can afford, or will not consider, because many of these “Ghost Cities” are too far from where the jobs are. China’s bond market is the second largest in the world after the United States. With this kind of debt, quality (the ability of debtors to repay) is a major factor. The quality of Chinese debt is much lower than in the U.S. or the West in general and the extent of this problem was deliberately hidden by debtors, especially local governments, for decades. Some of that bad debt is related to BRI (Belt And Road Initiative) projects, which is currently about $60 billion. Poor management, covid19 and local violence and corruption turned most of that debt into a liability, or worse because default either means China assumes ownership of the project or the local government interferes and creates a diplomatic as well as economic problem. All this makes China’s real estate bubble far more dangerous than previous ones encountered in major economies.

Read more: https://www.strategypage.com/qnd/china/articles/20220916.aspx#foo
 
Primavera said:
.
China's is looking pretty precarious these days, I doubt that they will be able to carry as before. A financial meltdown is looking almost inevitable.

China: Decades Of Growth Ended By Debts

China’s GDP growth rate continues to slide and its bank failures are growing. The government has stopped announcing annual GDP growth rates and is now announcing it will make its best effort to keep economic growth going. Those efforts are concentrating on preventing a collapse of the financial system. Unofficially, the government expected 5.5 percent growth in 2022. Foreign economists estimate a more realistic 3.5 percent growth.

China’s economy was already slowing down when the current covid19 government shutdown of Shanghai and a growing number of cities made matters worse. There is also an unresolved real-estate bubble and more Chinese banks are suffering liquidity (cannot meet demands for withdrawals) problems. The economic damage done by all this led to a $5 trillion dollar stimulus program to alleviate suffering among workers and provide businesses with cash needed to keep operating. The actual decline in GDP growth is a state secret but is believed to be bad enough to produce GDP shrinkage and an official end to the decades of high GDP growth. China’s economy is, at $18 trillion (or less) a year, the second largest in the world. The Americans have economic problems but not to the extent China suffers from.

This is mainly about the size of their $117 trillion (before the new stimulus) government debt, which is nearly four times the size of the U.S. debt. This Chinese debt is 6.5 times GDP while the American debt of $29 trillion is 1.26 times GDP. It’s worse when you take population size into account. China has about four times the population of the U.S. meaning the average Chinese has about 16 percent of the income of an American while carrying far more government debt per capita. Much of that debt comes from millions of housing units built by local governments that not enough Chinese can afford, or will not consider, because many of these “Ghost Cities” are too far from where the jobs are. China’s bond market is the second largest in the world after the United States. With this kind of debt, quality (the ability of debtors to repay) is a major factor. The quality of Chinese debt is much lower than in the U.S. or the West in general and the extent of this problem was deliberately hidden by debtors, especially local governments, for decades. Some of that bad debt is related to BRI (Belt And Road Initiative) projects, which is currently about $60 billion. Poor management, covid19 and local violence and corruption turned most of that debt into a liability, or worse because default either means China assumes ownership of the project or the local government interferes and creates a diplomatic as well as economic problem. All this makes China’s real estate bubble far more dangerous than previous ones encountered in major economies.

Read more: https://www.strategypage.com/qnd/china/articles/20220916.aspx#foo
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While I have visited China I can’t sit here and speak as someone truly well versed on their country. But yeah, their economy is not all roses right now. That doesn’t mean they will fall off a cliff but they certainly are not without challenges. So I don’t buy into this ant-Western China is dominant rhetoric.
 
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