They left out the fact that the market has a way of correcting for input. Now that the government is running a bigger deficit it has caused treasury yields to rise as buyers demand more for them. This will counter some of the stimulative effects of the tax cuts. Of course, one could argue the Federal Reserve could keep yields low by buying them themselves, but they have already been doing this and it doesn't seem likely they can do more, especially since they have failed to unwind their balance sheet and indicated they wanted to unwind.

Needless to say, wasn't 3% growth what Obama projected when he was in office as well? Thus, there is not much difference in the hopelessly clueless optimism by our President. I guess their job is to be optimistic, however, its not too useful when it's unfounded. Hopefully, a trade war doesn't break out because we are now as dependent as ever now on foreign money to fund our deficit.

If you are worried about inflation buying commodities makes sense. The fact that commodities we use dropped in the downturn certainly detracts from that argument. What makes more sense right now is that the rate increase in the bond auctions alone drove the market down and that the downturn is a signal all is not well with the US running massive debts at low rates anymore.

If you have rising yields in a market that is not growing well dangers increase and risk premiums should rise. Thus it is a healthy correction given the new input. It is not a indicator to assume mass inflation. Quite the opposite. Worry mainly about decreases in business activity due to higher rates over time if this keeps up.

I don't think this is unveiling into a domino effect mainly because the retracement is ordered and just that a retracement for just the last few months. What is worth watching is the cause which is the bad treasury auctions due to the US growing budget deficit. If the dollar begins falling again and the treasury yields keep widening even if the Federal Reserve doesn't try to raise yields, then all bets are off the table.

Oil has already corrected. I feel it is a little bit overdone, however, the money losing pumpers are still around so I guess maybe its not. What it does reveal is that inflation is not the issue for the volatility. It is merely the terrible US treasury auctions that revealed how little control the Federal Reserve has floating more treasury notes at this yield with the expectation of massive US deficits on the horizon again.

Thus the market downturn is justified and the banter about inflation is just a bunch of garbage. This inflation explanation is a lot less scary that the fact that the US got a massive thumbs down by its creditors on its debt.

As you can see, most of the correction is merely a correction from overly lofty prices from Nov to present. Real estate is down worse for a good reason. I've been warning people rel estate should get hit harder in any downturn, even a mild correction seems to be the case.

We will see if this worsens, but it seems like the worst is over if bond auctions stabilize and the dollar holds support. If not, we will have to look to see if we have another leg down.

Good. That means this is not the big crash but is a sizable correction. I will add that it is a justified one at that.

This downturn wasn't caused by wage inflation fears as much as it was caused by weak bond sales after it has become apparent the US is going to blow up its deficit which is really bad if we start trade wars as well given China etc. are our biggest lenders.

Watch bonds and the dollar. We need to affirm a strong dollar policy and quiet the trade war rhetoric right now. Even then, bond yields seem to be going up and not because the US Treasury wants them to. This is what scared the market.

It was a dead cat bounce and was somewhat unexpected. The issue is those in power need to stop talking down the dollar, especially if we are going to run massive deficits again and are going to fight over government budgets and the debt ceiling every other month. The dollar is tied to bonds which we must sell in ever increasing amounts.

Thanks for the musical tribute. "Somewhere Over the Rainbow." should be added to the list. Indeed, gold someday will trade for $320k as well. In the meantime, the rain seems to be pouring down on those who bought it during the recent Christmas fever.

LOL what do you expect when you cut revenues but no spending. Now all we hear about is demands by both parties to increase spending. Is there not a sane, fiscally conservative politician in Washington DC anymore? The issue that the market is spooked about this is hilarious. It's like physicists being amazed that lighting a balloon filled with oxygen and hydrogen causes an explosion.