Yes. Exactly this. They even list the four individual stocks the drove the index. This is something that gets lost in the mix - a friend of mine wrote Treasure Planet. Treasure planet bombed its opening weekend. Disney had to restate their earnings. This dragged down the entire entertainment sector. My buddy was directly responsible for the Dow tanking 400 points. It's a highly complex system and highly unstable and right now, there are splinters of the index that are doing really well. The aggregate is rallying, but that aggregate is driven by a handful of overperformers that are overcoming the vast majority of underperformers. Mmmmm.... I'm not exactly comfortable with "businesses" as a group and "confused" as a motive. Basically, for the past several years money has been cheap to get (low interest rates) and the market as a whole is predicting that cheap money is about to come to an end (higher interest rates). This is causing market players to borrow now to buy stuff now because they predict they won't be able to afford it later. Does that make sense? Inflation is a controversial issue and most traditional economists would argue that we have been incapable of generating enough of it since the crash in 2008. This has caused the radical imbalances like the aforementioned cheap cash and all it entails. Most people are banking that inflation will go up. If we're talking about protectionist trade policies, though, devaluing the dollar actually does the job while inflating the dollar increases the flow of imports. This is why, as mentioned in the article, China is whacking the shit out of the Yuan so that everybody else can afford cheap Chinese goods (when you have a command economy and your currency is worth "whatever I say" x "the dollar" you can do this). It's also easy to say "we're owned by the Chinese" but of all US debt, 2/3rds of it is actually inter-agency debt (which means money one part of the government owes another part of the government). The rest of it breaks down like this: Source, current Sept 2016 Interest rates go up. Loans get more expensive. Monthly payments don't go as far because you're paying more interest. Available pool of money goes down because the service cost goes up which... ...well, the correlation isn't direct, but there's a loose correlation between rising interest rates and falling real housing prices. "real housing prices" assumes that your salary keeps up with inflation, which... ...well, Trump's president so anybody who says they know is either lying or kidding themselves. I'll say this: I watch real estate avidly and I'm starting to see shit that reminds me of 2006.Numbers look higher as a whole on the market right now, but that's just because a few businesses are selling really well to kind of fluff things up.
Businesses are confused about how to spend their money because they think the American government isn't going to prop the economy up anymore with cheap loans and low interest rates.
To make matters worse, inflation is a huge issue and China (who we owe a lot of money to) and Mexico (which is our good neighbor and economic friend) have uncertain futures to the value of their currencies and if Trump becomes an economic isolationist, this will agravate their currency problems.
Am I getting that right? How does inflation affect housing? Cause I'm asking for a friend . . .
