Tag: Recession

Bull market trend, green growth arrow. Stock Exchange and concept of a trading chart. Low poly, wireframe 3d Raster illustration. Abstract polygonal image on blue neon background

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post

Author
Gary Smith
Date
August 28, 2020

Categorized
Artificial Intelligence, Business and Finance

Tagged
AI and prediction, COVID-19 Recession, Featured, Recession, stock market, Stock market predictions}

The Stock Market Keeps Rising Despite COVID. Is It Nuts?

_{I’ve been asked whether advanced AI can explain the conundrum} _{Gary Smith

August 28, 2020

7

Artificial Intelligence, Business and Finance}

What is going on? Our GDP has collapsed and 16 million people are unemployed. Thousands of small businesses and dozens of billion-dollar companies have gone bankrupt, including California Pizza Kitchen, Hertz, JCPenney, Neiman Marcus, and Brooks Brothers. Yet, the stock market keeps hitting all-time high after all-time high. The stock market is supposed to be related to the economy. When the economy booms, corporate profits explode; when the economy collapses, profits crater. That’s what happened during the Great Depression when stock prices fell 90 percent and the unemployment rate averaged 19 percent for a decade. Now, stocks and the economy are moving in opposite directions. What is going on? A friend who knows that I live, breathe, and teach investments Read More ›

The economic crisis of 2020 with the red arrows indicating the economic recession in 2020.

^{Type
post

Author
Gary Smith
Date
June 29, 2020

Categorized
Business and Finance

Tagged
Banking, Debt, Featured, Fed, Federal Reserve, government, Great Recession, Inflation, Money supply, Recession}

Inflation Is the Least of Our Worries!

_{Yet some fear that the inflation dragon is about to roar} _{Gary Smith

June 29, 2020

7

Business and Finance}

The Federal Reserve (the Fed) can throw the economy into a recession whenever it feels that it is in our best interests to be unemployed — typically because the Fed is convinced that an unruly inflation needs to be tamed by the discipline of unemployment. For example, in 1979, as the rate of inflation peaked above 13 percent, the Fed moved to make borrowing prohibitively expensive. When Fed Chair Paul Volcker was asked if the Fed’s policies would cause a recession, he replied, “Yes, and the sooner the better.” Interest rates reached 18 percent on home mortgages and were even higher for most other bank loans. Households and businesses cut back on their borrowing and spending and the unemployment rate Read More ›