Snuggmeister t1_j9cb2rd wrote on February 20, 2023 at 9:45 PM

Wow this may be one of the best things I've read on WSB in a long time.

I'd value your input on 2 covid-19 era stimulus policies that will end in 2023: SNAP Emergency Allotment and student loan repayments resuming.

Under SNAP Emergency Allotment, ~32 states expanded SNAP to allow any household that qualified for SNAP to receive the maximum benefit, regardless of their income level. This is estimated to be about $60-70 billion worth of benefits that were given out since the program began, but I cannot find hard numbers on it. SNAP Emergency Allotment officially discontinues at the end of February. Research done by JPM found that households will reduce their food spend last before giving up anything else (obviously). With households no longer receiving this free money, where will they pull it from?

Student loan forgiveness plus SNAP Emergency Allotment, combined with rising inflation and the Trump tax cut ending just now kicking in and seeing reduced refunds, makes me think that we will absolutely head into a recession by end of Q2.

DesmondMilesDant OP t1_j9dzwc0 wrote on February 21, 2023 at 5:45 AM

Yah man there is a recession lurking around which will get priced in stock market in 2023-24. Timing it will be so hard. No machine or technical analysis can ever tell you that coz then otherwise everybody will be so rich.

As for your arguments yah i completely agree with you. Also you can add refinancing in that list. A lot of companies financed in low interest rate so how deep the rabbit hole runs will all shall be revealed by 2024. Don't forget the Fed selling MBS and housing market getting weak by 2024.