The economy and stock market are starting a major U-turn but nobody seems to be paying attention.
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The message of doom and gloom is getting louder while the numbers are indicating that the 2023 recession and biggest ever 2023 stock market crash may be less likely than some people will say.
In this video I discuss some macro economic factors impacting the economy and the stock market and the key difference between paying attention to what people say and what people do.
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Hey guys, it's Sasha Pay attention. The world's Financial system is starting to do a massive U-turn but nobody is talking about it sometimes I Feel like I'm sitting here talking to a wall and the reason nobody's talking about it is because talking about this U-turn does not make for good business newspapers. YouTubers Social media influencers Whatever will tell you that everything is collapsing because panic and fear is good for views. The government of politicians will tell you that everything is also collapsing because it sells unpopular policies.

It sells austerity. It sells obedience from voters who have been injected with fear about money. Fear about being able to pay their rent, Fear about being able to make their mortgage payments, Fear about being unable to pay their electricity bill because electricity prices have gonna buy a hundred percent after Putin Invaded Ukraine And of course, oil prices are lower right now than they were before Putin Invaded Ukraine and so are gas prices. They are also lower than before the war in Ukraine.

But hey, who cares about what's actually happening in the real world? Because in April Energy prices in the UK are going up another 50 of the price that we paid a year ago. because in the UK the cost of electricity has gone up from 1200 pounds a year for the average household to 3 000 pounds in April. And for some very peculiar reason, nobody and I mean nobody in the mass media is asking the question why the actual is this happening and I'm gonna tell you why is because people are very slow to react. That's human nature.

The government is slow to react to a changing landscape. Investors are slow to react to economic changes that are happening right in front of their nose. People's minds work in a very specific way. We see a pattern happening in the past, and naturally our brain extrapolates that pattern so we think it is a direct explicit indicator of what of course will happen in the future.

Except that not how it works. We see the market going up and everyone gets massively excited. We have a stock buying frenzy. Everyone's becoming a multi-gazillionaire by buying the latest.

Trend Then the market starts going down for a year and we have the exact opposite effect and it's very difficult to get yourself out of this Loop and not follow the herd because the exact opposite of what everyone is saying tends to happen more often than not. Incidentally, if you want to read a great book about this exact issue, you should go and read the subtle art of not giving a by. Mark Manson And if you want to get all the key ideas from the book in just 19 minutes, you can read or listen to the highlights on Blinkists, who are the sponsors of today's video. Blinkist is an app that lets you understand the most important points and arguments from over five and a half thousand books and podcasts in around 15 minutes and some time ago.

I Read this book By Mark Manson in full that I liked way more than I thought I would and Blinkist is the perfect tool to get a summary as a reminder if you want to come back and revisit books in the future or just to get an idea of what the book is about without having to go and read the full thing. One of the key ideas in that book was that sadly many of us go through life as if our experiences were imposed upon us. We see ourselves as the unhappy victims of Life circumstances. It's this victim mentality that dictates so much of our lives today.

It's actually pretty neat how Blinkus breaks down books into these key ideas that you can quickly scan through I Want to be a smarter investor in 2023 and Blinkist will help me get through a lot more books I wouldn't otherwise have time to read and you can get 25 off Blinkist premium by using my link in the description. You'll get a seven day free trial to test it out and you get two memberships for the price of one, so your wife, girlfriend, or whoever can get access as well as you for free. The Blinkers Connect feature is included in the same deal, so make sure you go and check out that link in the description. So talking about paying attention, it is incredibly important to understand what you should be paying attention to because most people pay attention to what people say.

And this is wrong because people pay a lot of attention to what politicians say. Look, politicians are saying that a recession is coming. We all need to go and tighten our belts. Is going to be long and painful, Everyone's going to lose money, and everyone's going to be extremely poor.

But you have to remember that politicians aren't here to give you their best educated, actual assessment of the direction of the economy. They are here to get you to vote for them. That is their primary objective for you to feel like they are on your side. So right now we've had a market downtown.

We've had a year-long recession without it being given the official status. People have lost money in their Investments. Of course people are feeling down. so as a politician, you have to level with the people and tell them what they want to hear.

They are all victims of these unfortunate circumstances far beyond their control and the politician really feels your pain. Then you have the U.S Federal Reserve Bloody Bloody Blah Speech. Every day, everyone is listening to every single word of every single speech that Jerome Powell gives and everyone latches onto each of these words as though it is some kind of divine gospel. And I know it makes for popular content.

on YouTube To go and stick your own Pal's face and your thumbnail on. Talk about whether he's hawkish or dovish or piggish or whatever animal you like. Truth is, it doesn't matter. The FED does not create macroeconomic patterns.

The FED is not some kind of God that instills economic future unto you. The FED only reacts to things that are happening. The FED is a lagging indicator. By the time the FED starts doing something, the boat has already sailed.

But people have short-term memories and they forget it That this is exactly what happened when inflation started going up and how long it took the FED to actually change their tune. This is exactly what's happening right now that inflation is coming right back down. Stop paying attention to what politicians say and the FED are also politicians. Even if they pretend otherwise, stop paying attention to what the media who wants to sell bad news say instead pay attention to numbers.

CME Group Data says that there is now a 99.8 percent sensors in the stock market among analysts that interest rates will only go up by a quarter of a percent next week. and the Wall Street Journal has just broken this apparently highly controversial news story that the FED might pause increases in merge. How unfathomable? Who could possibly have thought about it? Everyone is so surprised the NASDAQ is up seven percent year to date and continues going up. And yet these are all lagging reactions to Data.

I was saying that this is by far the most likely outcome Some weeks ago And many of the comments told me that I am a complete idiot because I'm not listening to all this noise. That's saying that everything is definitely 100, no doubt going to collapse immediately. more. Street Analysts have been downgrading stocks like no tomorrow for months because the stock price was going down.

Nothing to do with the fundamentals. Nobody cares what the actual projections are, stock goes down, the stocks gets re-evalued by the Banks down stock goes up, the prices go back up. the analyst follow rather than predict. For the whole of the second half.

last year, all you heard was that the worst ever recession was certain it was a hundred percent. Coming in 2023 is going to see the biggest Financial meltdown you have ever seen. Michael Barry Sitting there tweeting every day and here we are in January 2023 and what does CNBC say? Barclays Upgrades AMD Stock JPMorgan upgrades Wayfair Deutsche Bank upgrades Shopify Goldman Sachs thinks that Microsoft and Amazon are a buy? Well I never. Don't get me wrong, the U-turn is going to take some time because we're about to enter earnings season where companies will deliver their Q4 results and the level of fear injected into people last year was astounding.

Energy Prices shot up through the roof. Everyone was talking about the inevitable blackouts that are coming. We're all going to be sitting there huddling around a candle to stay warm. but European gas storage is at 83 percent in January about 56 more gas stored than in January last year.

So back in Q4 consumer spending dipped on the back of all the Doom and Gloom consuming confidence dipped and I am sure we're going to get some very interesting, pretty bad results in some cases where companies will underperform Panic will of course ensue because people will look back at what happened in the past instead of trying to understand what's going on and how that will affect what happens in the future. Oh my. God Company X sold less than expected sell the stock Panic Go and throw your toys out of the pram. Oh my God Companies wise margins were low in Q4 they had to lower prices.

let's go and cry a river. Over the next few weeks you will see a chunk of the this negative sentiment is almost guaranteed. All the while, key commodity prices have fallen sharply all the way through the second half of last year. Energy Prices are down and this means companies are extremely well positioned going into 2023.

the media has been obsessed with Microsoft Google Amazon firing staff in recent weeks. it's all over the front page, so you're reading the stuff thinking boy, things are really bad when all these big Tech Giants are getting rid of ten thousand or twelve thousand employees each. But the fact is that many of these companies were incredibly bloated and they are just trimming fat something that they probably should have done some time ago. Google has a 160 000 employees that is pretty extraordinary if you actually think how many people that is and what all those people must do.

Amazon has 1.6 million employees. Of course they have the whole delivery. Network So their redundancies are a drop in the ocean. U.S Unemployment data is showing historic lows at three and a half percent, which means that an unusually high number of people are still in jobs earning money despite what happened last year.

Now the power of that money has dropped because of inflation. Real earnings are down, but inflation has already started to come down massively over the last few months, and inflation-adjusted earnings in the US have dipped in the last few quarters after the artificial pandemic boost. But they are higher today than at any point before 2020. So maybe just just maybe perceptions of what is normal and what is good? Because completely out of whack when free money flooded in, it went into the market, it went into people's pockets.

We had stimi checks people come back on expenses during code by staying at home and not spending on anything. It is an unpopular thought I Am aware because it plays right against the victim mentality. but here we are staring at: Cold Hard numbers the U.S Industrial Production Index dipped slightly in December but still sits at historically high levels way above where it was from 2012 to 2020. But it's not all Rosy It is important to acknowledge that it is not all easy.

U.S Consumer Debt was at 16 and a half trillion dollars in Q3 last year, which is very high and at the same time personal savings rate collapsed hitting 2.2 percent in October before rebounding ever so slightly in November People are borrowing money to pay their bills so it seems and have a lot less money that they can say save or choose to save. All this is happening at a time when interest rates are going up. This is going to exert pressure on household budgets as we move through 2023.. at the same time, the personal savings rate is not an indicator of an impending recession.

I'm not sure where people got this notion from because lower savings rate also tends to mean higher spending. Lower savings rate tends to happen during a period of Boom It is actually more common for the personal savings rate to increase in a recession because people are spending less money and they tighten their belts more than perhaps is necessary. and there is a long-term downward macro trend on the savings rate anyway, as putting money away has become less and less popular over the decade. So in 2023, are we going to have the worst ever year for investing? Are we all doomed? Is everything is going to crash to the lowest level you've ever seen? Well, it's certainly possible because anything is possible in the 2020s, but the numbers certainly indicate the livelihood is pointing in a different direction and the sky in front at the moment looks a heck of a lot more blue than the gray clouds overhead.

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