Is the stock market going to tank?

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Originally Posted by liv2ski

If you own Treasuries with low rates you're either stuck with them and the low yeild or you can sell them at a discount that raises the yield to the present higher yield for the buyer. Idealy, you want to buy Treasuries when yields are high and then sell when the yield is lower so you are paid a premium for the higher yield.
Why anyone would buy low yielding Treasuries is beyond me, hence why the FED may be the buyer of last resort at some point.

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Gotcha. I guess I'm viewing this differently as in 'would a treasury security buy now be a useful investment?'. Not a fund, eft, company bond - an actual treasury bill, note, bond. Hold to maturity - take your face value without plans for the 2ndary market. Reliable return in a volatile landscape.

But I think ppl are saying that the trader crowd that has T-notes/bonds at like 2% are in the crapper since we are approaching 5% yield - zero 2ndary market for those.

When rates double from here I am sure you will feel the same:fmicon:

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Originally Posted by NakedShorts

When rates double from here I am sure you will feel the same:fmicon:

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Timing? I can battle FOMO - the enemy of all investments, no?

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Originally Posted by NakedShorts

We can get a bounce but WE MUST HOLD THE LINE

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June 17 - Called the bounce!
Trust me yet?

OK, Nostradumbass.

:D

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Originally Posted by liv2ski

Cono, so what do you think? The 10 year close to 5% once the FED is done?

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Yes, I think that’s safe. May go alot higher though. I’m not a bond trader, but a lot of the same principles apply.

The sell off in treasuries the last 6 months must be up there in all time most painful in history. Someone has to be seriously hurting. I talk a lot of gloom and doom, but really need a catalyst like Bear Stearns implosion to really send us in the crapper.

With the trillions lost on treasury paper, I’d have to guess if we have a catalyst, it’s going to be on treasuries on someone’s sheets.

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Originally Posted by CarlMega

Gotcha. I guess I'm viewing this differently as in 'would a treasury security buy now be a useful investment?'. Not a fund, eft, company bond - an actual treasury bill, note, bond. Hold to maturity - take your face value without plans for the 2ndary market. Reliable return in a volatile landscape.

But I think ppl are saying that the trader crowd that has T-notes/bonds at like 2% are in the crapper since we are approaching 5% yield - zero 2ndary market for those.

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Bonds are one of the few mkts that are still totally rigged. Buy a bond a day after it’s issued and you can lookup the cusip #. and see two fuckers scalped it before you. So with bonds I think it’s worth paying for good management, but only in seperate accounts. As in you actually have the bond in your own portfolio. Mutual funds you do not really have the control to hold it to maturity and recoup your principle. BOND is down from 115 to 90 this fucking yr!

I use treasury direct. You can buy at auction twice a month I think.

Collectively, we went from "everything is priced in" and "history shows it's profitable to buy at the beginning of a war" and "it's a good time to jump into bonds (in June)" to "we're headed for a depression" in this thread. Guess it'll be a good time to buy equities soon.

I bought bonds in various forms from April through June. Down a solid 7%+ after payouts. Overall yield is also around 7% now. I don’t like it but as long as they pay what’s the problem? I don’t have to sell anything and portfolio yield and payout continues to rise.

Strong dollar has hurt me as much as rates with 15% global diversity.

Def no problem, and you had some good reasoning.

In general, this whole thread has me convinced that it's basically impossible to know what's going to happen.

I'm of the opinion that we're headed for major economic upheaval but I have a general misanthropic disposition that clouds my judgment during good times.

I also have no idea if said economic upheaval will play out with serious inflation or with deflation. I'm personally hoping for the latter. Asset prices got too high and we (Fed and Federal Government) were backstopping people taking crazy risks.

It's also entirely possible that everything will be fine, just like JBarronddjong says.

The problem ultimately lies that governments and big business benefit from inflation. Debt gets cheaper and profits go higher.

Deflation on the other hand is a cruel mistress.

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Originally Posted by Kevo

Def no problem, and you had some good reasoning.

In general, this whole thread has me convinced that it's basically impossible to know what's going to happen.

I'm of the opinion that we're headed for major economic upheaval but I have a general misanthropic disposition that clouds my judgment during good times.

I also have no idea if said economic upheaval will play out with serious inflation or with deflation. I'm personally hoping for the latter. Asset prices got too high and we (Fed and Federal Government) were backstopping people taking crazy risks.

It's also entirely possible that everything will be fine, just like JBarronddjong says.

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Hey now, I don’t think I’ve said everything *will* be fine, more like ‘things may be fine’ or ‘it’s not inevitable that everything will go to shit’.

Predictions are hard, especially about the future.

I’ve personally become more pessimistic that the Fed is over correcting and will lead us into a recession if they stay on their current path, but I did see that at this time last year their path was for 0% rates at end of 2022 and they obviously changed that, so hopefully they’ll be just as quick to change in the opposite direction.

Meanwhile, seems like NakedShorts is still concerned that we’ll have too much inflation, so who the fuck knows… (though TIPS are still only pricing in 2.33% average over five years.)

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Originally Posted by 4matic

Strong dollar has hurt me as much as rates with 15% global diversity.

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I was worried a bit about my stonks until I looked at the exchange rate for NOK to USD (US citizen living in Norway, so earning in nok but investing in the US), and now i think I'll pretend money doesn't exist for awhile and buy a gravel bike or something rather than retire.

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Originally Posted by Cono Este

Baltic index is pretty crazy.

We fucked ourselves. That’s all I can say about the forthcoming economic collapse and depression. 20 yrs of terrible monetary policy.

I have to imagine the bottom in treasuries has to really be something on a scale I’ve never seen in my adult life.

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I should clarify my earlier comment. These are spot market rates, and not contract rates. The contract rates for the 2022 season were negotiated in March/April when the rates were headed toward $20k. So, shippers like Amazon, Walmart, Home Depot, etc, etc. are paying contract rates above probably $12k. These rates are predicated on certain volume commitments. Don't hit your volume commitment, pay a penalty. Though I suspect that shipping lines won't be too harsh with enforcing those penalties. Otherwise they will lose future business.

However, it's very telling that imports have dropped off a cliff so suddenly.

Long bonds. What a time to be alive. I’ll take a 4% yield on treasuries and wait for inflation to roll over and/or (it will be and) the recession to hit.

Might it go up a bit more? Yup. But winter is coming. And I’ll carry 4% while I wait.

Still in short term high yield too. Maturity schedules don’t blow back out until 2025. Which means no debt (very little) is due until then.

Feed me yield.

I finally figured out how to buy t-bills on Treasury Direct few weeks ago. credit union doesn't seem to be raising CD rates. Did 2 at six months and 1 one year. The 1 year auction is only 1/month. I think all just under 4%

How sketch is this bank of England shit? Seems wonky

They still haven't learned their lesson from the last 14 years of intervention

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Originally Posted by byates1

How sketch is this bank of England shit? Seems wonky

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The BoE or the new govt policy ? BoE actions pretty straightforward

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Originally Posted by Brock Landers

The BoE or the new govt policy ? BoE actions pretty straightforward

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The latest UK government policy is less taxes/ more money for the moneyed class/ let the NHS collapse.

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Originally Posted by up an down

The latest UK government policy is less taxes/ more money for the moneyed class/ let the NHS collapse.

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Sounds familiar...

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Originally Posted by up an down

The latest UK government policy is less taxes/ more money for the moneyed class/ let the NHS collapse.

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Pretty much. Gilts and sterling fell apart, BoE is doing what they can I guess

TSM falling apart nicely.

Hoping for 60!

On the topic of federal banks...I haven't seen any headlines the us fed is reduced balance sheet? Thought that was part of the plan? Graph on their website suggest balance is about same as start of year.

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Originally Posted by 406

On the topic of federal banks...I haven't seen any headlines the us fed is reduced balance sheet? Thought that was part of the plan? Graph on their website suggest balance is about same as start of year.

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Attachment 428042

https://www.federalreserve.gov/monet...centtrends.htm

Right, not really a reduction. The million million scale is "funny". Seems like an actual reduction will cause something major.

Shall we set up a pool for how low the Fed's balance sheet drops before it halts the QT program? I'll go with $5.5T.

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Originally Posted by 406

Right, not really a reduction. The million million scale is "funny". Seems like an actual reduction will cause something major.

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On the ground, I think it mostly means a big buyer of bonds has stopped buying, but the breadth of opinions on the effects of QT is impressive. That may be offset by the fact that the current govt doesn't need to raise as much $$$ and other countries may buy treasuries for the safe haven they provide (not to mention large institutions). The big QT attempt in 2018 didn't go so well, but they supposedly have tinkered with the gears to avoid repeating that problem. Regardless, the past few months (and weeks) in the US treasury markets have been insane. I look forward to the post-mortem review.

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Originally Posted by 406

Right, not really a reduction. The million million scale is "funny". Seems like an actual reduction will cause something major.

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I guess the level isn’t down much, but there’s a clear change in direction.

I think any change in policy occurring too rapidly would ‘cause something major’.

Statement on their plan for anyone who wants to try and parse it:

https://www.federalreserve.gov/newse...y20220504b.htm

Wow...Much faith parked in suits with degrees with 0 real world experience. Currency movements and understanding is beyond most, even in the CB's and biggest money managers around the world. Best of luck. Some of you are going to be slaughtered.

Just wait until the Govy bond market goes no bid and rates go up in effort to attract buyers. The game is over for Government Bonds and the party is only just starting. Govies have run out of other peoples money and they have no plans to stop spending...Now comes the lies, excuses, and passing of blame.

TV/ Traditional Media will not help you here and many of the whack job Gold Bugs will not either. Welcome to the grind. The European banking system is going to go down in a ball of fire and that is why the FED has had to step into the reverse Repo market. No US bank wants to touch any overseas paper and the only thing holding the Global system together is the US Federal Reserve. They have embarked though on a path that will lead to Emerging Market Brimstone.

NATO is building bases in Romania and preparing for 4-5 years of conflict. WW3 will blow many of your thinking's right out of the water. I do understand you are only able to forecast what you know and believe to be true. It is what you do not know that worries me.

https://www.rferl.org/a/nato-battleg.../32044735.html - Added this for the source of my claim

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Originally Posted by NakedShorts

Wow...Much faith parked in suits with degrees with 0 real world experience. Currency movements and understanding is beyond most, even in the CB's and biggest money managers around the world. Best of luck. Some of you are going to be slaughtered.

Just wait until the Govy bond market goes no bid and rates go up in effort to attract buyers. The game is over for Government Bonds and the party is only just starting. Govies have run out of other peoples money and they have no plans to stop spending...Now comes the lies, excuses, and passing of blame.

TV/ Traditional Media will not help you here and many of the whack job Gold Bugs will not either. Welcome to the grind. The European banking system is going to go down in a ball of fire and that is why the FED has had to step into the reverse Repo market. No US bank wants to touch any overseas paper and the only thing holding the Global system together is the US Federal Reserve. They have embarked though on a path that will lead to Emerging Market Brimstone.

NATO is building bases in Romania and preparing for 4-5 years of conflict. WW3 will blow many of your thinking's right out of the water. I do understand you are only able to forecast what you know and believe to be true. It is what you do not know that worries me.

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Nostradamus post preservation service

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Originally Posted by ::: :::

Nostradamus post preservation service

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<ahem>

NostraDUMBASS, please.

:D

Who are the biggest buyers of Bonds?
-Pension Funds
-Insurance Companies
-Banks

What happens when you lower rates to negative and then in the future you increase rates? What happens to the price of all of those bonds issued at low or negative rates? Balance Sheet Adjustment = Black Hole

It really is not that hard to understand. Although the CBdicks obviously had no long term thinking capabilities or maybe the plan was to blow up the whole thing?

You use a lot of rhetorical questions

Attachment 428053

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Attachment 428058

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Originally Posted by NakedShorts

Who are the biggest buyers of Bonds?
-Pension Funds
-Insurance Companies
-Banks

What happens when you lower rates to negative and then in the future you increase rates? What happens to the price of all of those bonds issued at low or negative rates? Balance Sheet Adjustment = Black Hole

It really is not that hard to understand. Although the CBdicks obviously had no long term thinking capabilities or maybe the plan was to blow up the whole thing?

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Pension funds and insurance co’s will have lower liabilities with higher rates. That’s the balance sheet adjustment. It’s 7th grade math. Not a black hole.

And they can just buy more. This isn’t the first time rates have gone up. And not the first time the fed raised rates.

Remember the carnage and zombiepocalypse back in the 80s when Volcker was hiking 2% a clip?

Me neither.

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Originally Posted by NakedShorts

Attachment 428053

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Fed using their balance sheet to facilitate/broker both repo and reverse repo. Not Armageddon. It actually safeguards against short term armageddons (sept 2019).

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Originally Posted by NakedShorts

Wow...Much faith parked in suits with degrees with 0 real world experience. Currency movements and understanding is beyond most, even in the CB's and biggest money managers around the world. Best of luck. Some of you are going to be slaughtered.

Just wait until the Govy bond market goes no bid and rates go up in effort to attract buyers. The game is over for Government Bonds and the party is only just starting. Govies have run out of other peoples money and they have no plans to stop spending...Now comes the lies, excuses, and passing of blame.

TV/ Traditional Media will not help you here and many of the whack job Gold Bugs will not either. Welcome to the grind. The European banking system is going to go down in a ball of fire and that is why the FED has had to step into the reverse Repo market. No US bank wants to touch any overseas paper and the only thing holding the Global system together is the US Federal Reserve. They have embarked though on a path that will lead to Emerging Market Brimstone.

NATO is building bases in Romania and preparing for 4-5 years of conflict. WW3 will blow many of your thinking's right out of the water. I do understand you are only able to forecast what you know and believe to be true. It is what you do not know that worries me.

https://www.rferl.org/a/nato-battleg.../32044735.html - Added this for the source of my claim

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Rest of the world will buy US Govy bonds.

China selling dollars to prop up their commie fiat currency.

GBP is not so great. Time for a Euro trip, as long as the next COVID variant isn't spreading like wildfire and killing hundreds of thousands daily.

Buy big pharma.

Or build a nuke bunker. Or both...

Should I sell?