“There If inflation remains persistent, as I am laying out, bonds return of capital feature will become decimated by said inflation.”
Pretty sure we have a printing press so you will get capital returned in some form…in treasury.
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“There If inflation remains persistent, as I am laying out, bonds return of capital feature will become decimated by said inflation.”
Pretty sure we have a printing press so you will get capital returned in some form…in treasury.
That’s what’s so scary. We haven’t seen anywhere near as bad as what’s to come. There are some fundamental forces being set in motion.Quote:
Originally Posted by 4matic
I’m sure I don’t need to tell you this, but for the benefit of others, when the covid crash occurred, the fed pumped $4.5T into the economy by buying up corporate bonds and mortgage backed securities. This, and lowering interest rates provided liquidity that helped the stock market recover and take off from there.
The economy got hot, we’ll sort of, and along came inflation. So now the fed wants to take those purchases off their balance sheet and also increase interest rates. There is no way that those two acts will not have a negative impact on the market. If the opposite of those two acts propped the market up, the inverse must surely have the opposite effect.
The thing is, the interest rate increases have barely started. I can’t see those not continuing to for many months to come, until inflation backs down substantially.
And QT hasn’t even started. They quit buying the corporate bonds and mortgages. The next step is to let them “roll-off” the balance sheet as they mature. This part starts next month, capped by a certain amount. The cap increases in later months, and eventually the fed will actually start selling its inventory.
So this downward pressure on the market is going to increase gradually over several months, and it is not going away in a few days.
I guess you're not buying Cathie Woods' conclusion that Target's retail losses show that inflation is declining.Quote:
Originally Posted by NakedShorts
Do I need to go quote you 10 pages back, or quote myself the last 10yrs?Quote:
Originally Posted by Bunion 2020
I take this shit seriously, it’s not politics, and I think my calls speak to my experience as a professional who was trained by plank members of major exchanges. I’m no genius, im no Lee lau, in fact I consider myself just above average, but they’re is no Poly ass in me when I know people are playing with their savings.
I never had a losing month in my career. Couple months I didn’t make expenses, but not bad.
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Lot of people wanting bad news.
I don’t make calls in here. Except for the covid sell off, that was too good not to brag.
It’s about prudence and risk management
I’ve never been paid to give advice nor do I want to.
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Nobody really trusts Wall Street do they?
They shouldn't ...because to the big firms our savings is a game and they want them for themselves.
Attachment 416869
This is real and many are playing with real $.
Not my point.Quote:
Originally Posted by Cono Este
Warren Buffett, Jimmy Buffet, Breakfast Buffet it doesn't matter.
Yeah you have your opinions but the best minds in investing and fiscal policy are all guessing.
Yeah it looks like a recession may be coming, anyone with a smidgen of gray matter can see that. Given past market performance, it would take brass balls the size of Church Bells to sell and go to cash right now with the current losses baked in.
Dude, when it comes to money, you’ve got to be A political.Quote:
Originally Posted by dunfree
I’ve said it many times before, anything that comes is the result of the last 6-7 presidents. Printing money, giving away money.
I’m no economist, but sooner or later a broken clock is right once in a day.
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No way man. 10 yrs ago, a 60 yr was ready to jump of a bridge. Many did. If you’re retired, and you rode that out, you’re still a hero. With dividends tripled your money from the bottom. Maybe more.Quote:
Originally Posted by Bunion 2020
When all the dentists at my gym start slamming their lockers and cursing im going to have to Laugh my ass off. There is no such thing as free money.
Let greed get them I don’t care. They could take advice from real traders, risk managers, phd’s, but instead some ass clown with no experience gives them derby tickets and golf balls and they hand them their 5 mil.
I’ll probably die driving a snow cat off a trail, or freeze to death, but I’ll take that before ever joining that circle jerk.
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I’m with her on this one. Deflationary forces will return. That’s why I went long bonds of many flavors.Quote:
Originally Posted by dschane
OK now I AM being a little bit of a dick but RE: 10 years ago....
But I get your point.:cool:Quote:
And overall, 2012 was a good year for stocks: The Dow was up 7.3 percent for 2012, its fourth straight year of gains; the S&P 500 climbed 13 percent, its best year since 2009; and the tech-heavy Nasdaq index surged 16 percent.
much, aren’t you being political? Check out inflation globally. Its up most everywhere. Is that the fed printing money? Or China and it’s now certifiably insane zero Covid policy fucking up supply in the worlds factory? Or a huge global shift from services to consumption that’s now being reversed, slowly? Or all of it?Quote:
Originally Posted by Cono Este
Not disagreeing that lots of money went into trash and propped up trash (crypto, the spac boom, Tesla) just that it’s not even or systemic. And tired of hearing people with $70k bought in pandemic pickups bitching about $4 gas
There are two parts of QT. Roll off and selling. Most of the Fed balance sheet is in one to five year maturities so most of that can roll off. The bonds they choose to sell can be sold at auction just like a treasury auction. With rates where they are there will be demand. Trillions in money markets, insurance companies that are required to buy.Quote:
Originally Posted by billyk
Supply chain inflation will resolve. I wouldn’t be surprised if the ex food and energy number goes negative in the next twelve months.
In fact, it behooves the Fed to talk rates up so they can sell what they need too.
Imo, rates move back lower, especially if stocks continue to struggle.
https://www.federalreserve.gov/relea...urrent/h41.pdf
I think you are missing the bigger picture 4matic. Governments have no ability to pay their piles back. The game of borrowing and never planning to pay back is OVER.
Welcome to the grind!
Let me guess? Gold!!Quote:
Originally Posted by NakedShorts
only if demand craters - diversifying the supply chain from china will take longer than 12 months for some sectors. Lots of corps looking for a plan b asapQuote:
Originally Posted by 4matic
Double ordering microchips. Always a boom bust cycle.Quote:
Originally Posted by dunfree
Look at all the retailers. Starting to be a theme.
“Ross Stores fell more than 18% after the retailer posted first-quarter revenue that was below analyst expectations. The company’s earnings per share and same-store sales guidance for the second quarter also came in below estimates. “Following a stronger-than-planned start early in the period, sales underperformed over the balance of the quarter,” CEO Barbara Rentler said.”
On top of this now you have asset prices cratering with higher rates and fuel costs. Demand hit a wall.
When China started locking down massive port cities like Shanghai and Shenzhen to prevent the spread of COVID-19, fears mounted that maritime supply chain disruptions would get even worse. That hasn’t happened, says Gene Seroka, the executive director of the Port of Los Angeles, America’s biggest port by container volume.
“The ships leaving Asia, and particularly in the Shanghai region, have shown to be at about 40 departures every week, which is about where we thought it would be,” said Seroka. “And now, eight weeks into the COVID lockdown, we’re not seeing any slowdown.”
Plus, port bottlenecks easing. Gone soon
https://www.audacy.com/kywnewsradio/...t-to-disappear
Container rates dropping
https://www.freightwaves.com/news/sk...k-to-earth/amp
they didn’t sell a single fucking car in Shanghai in April. Manufacturing is way down.Quote:
Originally Posted by 4matic
Gold may not work like it once did. It is to expensive today to serve as a medium for barter. Silver may work better for that. Assets will eventually protect us. They do in crazy times if they are good. If it gets real real bad then the only thing that matters is food so let's no go there.Quote:
Originally Posted by 4matic
What’s the hurry for USA now that demand has cratered? All that extra ordering is going to cause widespread price cuts. Just wait till the layoffs hit.Quote:
Originally Posted by dunfree
lolQuote:
Originally Posted by 4matic
What if inflation really is transitory? All this hand wringing could be completely misplaced.
target said luggage sales up 50% yoy. Demand for what.Quote:
Originally Posted by 4matic
Been dabbling into buying a bit more dividend yields via cash secured puts.
T ENB TTE are the targets
For the Yolo portfolio, sold some SHOP and ARKK puts too. Not too much as I have lots of tech. Sold at 350 and 40.
Turned some TIPS into BTC
Edit. Covered MULN RIVN PTON BYND to take profits. Still stuck short RSX as Russians are slow to allow that ETF to liquidate
Airlines are booked for most of the summer and I Suspect most of those fares were booked before the increases. After the summer season we’ll see. The Easy Jet CEO is not clear after summer.Quote:
Originally Posted by dunfree
Most central banks printed money. And the fiscal stimulus was inflationary. That's the point of stimulus. But it was certainly better than the alternative.Quote:
Originally Posted by dunfree
Here’s my analogy for the Fed/Monetary Policy:
What they’re doing is like driving a car on a winding, rolling mountain road where you can’t see very far ahead. Also, the car is short on power, has undersized brakes, and when you try to accelerate or brake there’s a 15 second delay between your input and when the car starts responding.
In this analogy, when Covid hits it’s like coming around a bend and seeing that you’re facing a really steep hill, so you press the throttle to the floor.
Then your passenger flips the nitrous switch (stimulus bills) because the worst thing that could happen would be to come to a crawl/stall out. So you’re cruising along pretty good now, but it turns out you were actually near the top of the hill and you’ve unexpectedly come upon a flatter section of road with the nitrous still engaged, so you’re driving much faster than desired (high inflation).
The goal now is to apply the brakes to slow the car back down to a comfortable speed. It’s possible that the Fed jumps on the brakes too hard (reversing QE and/or increasing interest rates too quickly) and slows the car down too much (recession), or maybe they don’t apply the brakes hard enough to get down to a comfortable speed (continued inflation).
Also keep in mind that while they’re trying to bring the car down to a comfortable speed, they still can’t see what hills or valleys may lie ahead.
I don’t personally think a recession or continued high inflation is in any way ‘inevitable’ at this point, but either one is certainly possible.
so, you think it would be better to starve like the poor plebes in china you were bitching about last month. Such myopia. Covid response - health/social control, fiscal policy, and monetary policy- were hugely different around the world!Quote:
Originally Posted by RoooR
never mind, just grind that dullard axe and buy max bits. Because that worthless trash has nothing to do with inflationary worthless funny money
Little Observational Awareness here to impart on the dynamics of global markets. The perspective of your home currency investment will make all the difference in the world.
Here is the price of gold over the last year in USD, EURO, YEN, Turkish Lira.
They all are 1 year returns on gold and all have very different outcomes. Understanding currency is important today.
Strong Dollar = Recession
Attachment 416889
Attachment 416890
Attachment 416891
Attachment 416892
Dude. I don’t care about politics and the mkt. the two are not tied for me. I’m not an investor either, I’m a risk manager, derivatives dork. I look at implied volatilities, skew, shit I spent yrs learning.Quote:
Originally Posted by dunfree
If I sound bearish, it’s because I always am. That’s how I was taught to think.
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You have me confused with someone else. I don't own any bitcoin. I prefer assets that generate cash flow. I don't even know what your point is? That all the stimulus wasn't inflationary? If you're trying to convince me it was worth it, well that I agree with. Some inflation is certailly preferable to millions of people out of work and hundreds of thousands of shuttered buisnesses. Even if a lot of those buisness owners used their PPP "loan" to push up asset prices.Quote:
Originally Posted by dunfree
That was awesome, thanks for taking the time to post it.Quote:
Originally Posted by J. Barron DeJong
Thanks. Glad you appreciated it.Quote:
Originally Posted by shera
An additional thought about the current situation:
I think there are two things that are going to make it difficult to pull off a smooth landing -
First, using my analogy, we’re currently going way faster than desired, like 50 mph over our desired speed, so it’s difficult to judge exactly what amount of ‘braking’ is going to be required and not overshoot/undershoot the target. Would be much easier to estimate if we were only 5 mph over our desired speed.
Second, while we can’t see too far down the road at any given time, we can look out the window and gauge the terrain we’re in. And the terrain we’re in right now certainly doesn’t look smooth, so who knows what ups and downs are going to lie ahead as the Fed tries to gently bring the economy back to it’s desired speed.
I know the fed has a tough row to hoe, but Powell seems determined to do his best. I am guessing end of quarter we will officially have a recession, but hopefully can recover reasonably fast.
The role that the fiscal stimulus has had with respect to inflation is a good question. Many countries around the globe are experiencing high inflation, and many of them provided much less stimulus. Good discussion here. What is most interesting, at least to me, is the divergent views on its nature (transient or long term), its causes, and its cures.
If you want a nerd explanation of the theoretical aspect of it, Krugman wrote about it on his blog during the Great Recession:Quote:
Originally Posted by dschane
https://krugman.blogs.nytimes.com/20...9/is-lmentary/