discussing one of the markets mover and shakers...
:rolleyes:
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 15, 2022, 12:43:45 PM
Some highlights from my weekly email “discussion” with my Perma-Bull friend…
So my friend asserts that if the Fed starts tightening and the Stock Market does start to collapse, the Fed will simply reverse and that snap of the fingers will instantly stop any crash, ergo, there can be no significant crash. He says I can’t have it both ways. I can’t claim the Fed pumped us up to these levels , have kept things levitated at these levels, can cause a crash by stopping the printing, yet claim they can’t reverse a collapse by resuming printing again. I can’t have it both ways.
Yes I can. ;)
The Fed has mechanical levers they can actuate to effect markets. But sometimes human psychology at it’s emotion extremes become impervious to Fed intervention for a period of time until people calm down enough to listen to what the Fed is trying to tell them. e.g.
https://www.investopedia.com/terms/i/irrationalexuberance.asp (https://www.investopedia.com/terms/i/irrationalexuberance.asp) https://www.investopedia.com/terms/i/inflationarypsychology.asp (https://www.investopedia.com/terms/i/inflationarypsychology.asp) https://www.investopedia.com/terms/p/panicselling.asp (https://www.investopedia.com/terms/p/panicselling.asp) etc.
The Fed wakes up in cold sweats thinking about markets emotional extremes. That’s when no one listens to them for a while and they are utterly powerless in the face of pure, raw, human emotion. It’s that moment of horror when they try and wiggle the joystick and nothing responds and they realize the control cables have been shot away.
That is not just an opinion I’m pulling out of my ying-yang. I’m staring at the actually historical data from the 2001 and 2008 market crashes. The Fed desperately slashed rates by heroic percentages all through those crashes trying to reverse the collapse with little discernible effect. In fact, maybe no effect. It may just be that those panics simply had to play themselves out.
My friend assets yes they did stop the collapse. They stopped it from going even further. Hmmmm...Okaaaay. But it didn’t stop a 54+% drop in 2008 or a 76+% drop in 2001. I don’t know about you guys, but that is not a ride I want to take so close to retirement. Remembering that it took the NASDAQ 15 years to get back to break-even after DotCom.
My reading of historical data suggests that after a crash, after the markets has wiped away it’s tears and blown their nose, the Fed can nudge investors and tell them,
“Hey man, buck up. Here you want some free money to gamble with? Com’on. You can do it. Borrow on some margin and speculate and make back some of those losses.”
“Sniff..well...ok...sniff...I’ll give it another try.”
When things are trending up, and investors are feeling like Masters of the Universe, the Fed can break out the mirror and lay down another line and hand the market a straw,
“Here ya go my man! Risk-On! Risk-On, Dog!”
“Oh Hell ya! Sniiiiiiiiiiif. I say HELLL YA! THIS TIME IS DIFFERENT!!!!!”
But once some has yelled “FIRE!!!!!” in that crowded strip bar and everyone is stomping each others guts out trying to get to the exit, if the Fed tries to stand in front of them waving free debt to buy on margin risk assets that are going up in smoke all around them, they are going to get punched in the mouth,
“Get the fk out of our way!!!!!! We gotta get out of here!!!!!!!”
Here are couple of data points I suggested my friend should carefully weigh.
* I don’t think Powell is the dove he has appeared to be lately. I think by nature, he is an old school moderate hawk. I think a couple of factors have forced him to lean further dovish than he would have preferred:
1. I think he felt as chairman he had to tilt to the prevailing committee sentiment. The committee has been decidedly dovish and Powell felt it was important for the chairman to not look out of step because a sense of consensus is needed for market stability. I don’t think he felt he had the freedom to vote how he would have voted as a mere governor rather than as a chairman.
2. I think he made a tactical assessment that he had to appear a little dovish to get past his renomination and confirmation. Despite where you see him plotted based on recent voting, I think you will begin to see moderately more hawkish Powell more in line with his true internal beliefs.
* Not all the Fed governors vote every year. Only a subset. In 2022, the voting slate of governors are rotating to a majority of hawks. I believe Powell will now lean hawkish to show consensus with the hawkish majority.
* Powell has a known concern for excessive wealth inequality in our country and the risks that poses to social cohesion and stability. I find it hard to believe he is going to be comfortable watching average American working families get monkey-pounded by crushing inflation in order to protect the stock market for 10% of the population that own 90% of all risk assets. Especially given the obscene returns they have already seen over the decade in the distorted market.
Good for them. But they should have been taking some of those profits off the table before now. If they haven’t, then maybe they need to learn the lesson of Moral Hazard. People choose to invest in the stock market. No one is forcing them by law. They are called Risk Assets for a reason. It was never intended that there should be a permanent guarantee of extreme profits under all possible circumstances.
Those that are still full Risk-On are either not paying attention, or they are so greedy they are willing to rush in front of an on-coming freight-train to pick up pennies off the tracks. Either way, play stupid games, win stupid prizes.
I’ve personally had enough. I’m Risk-Off. But maybe inflation will disappear magically. I could be totally wrong. If by summer the market has not even blinked, then I will have to re-evaluate and consider DCA back in, but I needed to re-allocate anyway and get much more conservative. I was way over my skis.
Still, Beware the Ides of March: (https://c.tenor.com/8rQnI1xDiEIAAAAd/michael-scott-the-office.gif)
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 17, 2022, 11:06:06 PM
i got a question if raising minimum wage raises prices. then why not just lower wages for everybody and stop higher prices for everybody?
semp
Title: Re: 2007 Redux Part 2
Post by: Brooke on January 18, 2022, 02:29:33 AM
Setting minimum wages higher than market rates results in some higher prices. But that's not the main problem. The main problem is that it puts a bunch of people out of work. The employer doesn't hire a person whose wage is higher than what the work is worth. In economic terms, you set the price of the labor too high, and now you have a surplus of it (i.e., people who want work who now can't get it).
Setting salary caps are bad in the opposite way. The worker doesn't take a job that pays less than what the work is worth. In economic terms, you set the price of labor too low, and now you have a scarcity of it (i.e., employers who want to hire but can't get people to do it).
The more you deviate from how a free market sets prices, the worse the consequences. Deviate a lot, and you get how markets work in Venezuela, Cuba, and the Soviet Union.
All of this stuff is well laid out in an excellent and short book: Economics in One Lesson, by Hazlitt. Or a longer one that is a more thorough: Basic Economics, by Sowell. These are marvelous books. On my list of 10 best and most-useful books to read in one's life.
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 18, 2022, 03:26:18 PM
What's going to happen this year? I have no idea. No one can. I have some suspicions that I think are > 50% probability.
First a caveat or two. ;)
There is clearly some component of the inflation we are seeing that is a temporary COVID-surge related blip. I think heading into early summer that will ease and factories will get rolling full capacity and supply chain will untangle mostly. That will help ease pressure.
I do believe there is also more system inflation embedded in that will take some effort to tame. Wage inflation is a big one. I bet once salaries have risen, it will be hard to pull that back. Wage inflation is sticky until the recession bites which I don't expect until after stocks begin to crash.
If inflation somehow magically disappeared then all calculations go back to square 1. If the Fed can hold inflation and unemployment at < 5% both, I think they will go back to a much more gradual approach.
Of course at any point some black swan event like a couple of regional shooting wars could also have unpredictable effects.
I have no crystal ball, but all other factors being equal, based on behaviors from past marketed crashes, a pattern that might be repeated would look something like:
1. Increased volatility Q1. 2. Q1 15-20% market pullback to something around SP 4000-4100. Bulls will retreat and try and reform. 3. Dead Cat Bounce Q2-Q3. Bulls will blow the trumpet and rally and make a last ditch assault to try and retake the SP 4600 defensive wall. Their war cry will be "we survived the crash! Risk-On!" 4. I believe they will fail (Q4) and at that point, break themselves on that wall, and rout, falling back in disarray being chased by cavalry. 5. How far will they run? Where is the bottom at? <shrug> The closer we get to SP 2000-2200, the more likely I will be to cautiously DCA some back in.
Note: phase 5 might drag out for 12-24 months. 16 months would be the average from past events, but this one seems to be behaving in an accelerated manner. So I'm not looking at timing other that as a general suggestions. I'm looking for when things get closer to some reasonable distance from less deranged Buffet Indicator level. Along the way there will be several Sucker-Rally attempts. Each one will have less conviction behind it than the last but will still sucker in plenty who just can't believe it will drop any further. They always think that.
In no way am I saying that is what will happen; but that is one possible scenario that I'd give > 50% probability.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 18, 2022, 04:34:46 PM
With as much funny money the fed had pumped into the market I think it all needs to fall below 2016 levels to have any real correction
I don't think they have the stones to get it anywhere near that so wherever the market is when they start pumping again it will not be the correction it should be IMO
Eagler
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 18, 2022, 04:40:48 PM
With as much funny money the fed had pumped into the market I think it all needs to fall below 2016 levels to have any real correction
I don't think they have the stones to get it anywhere near that so wherever the market is when they start pumping again it will not be the correction it should be IMO
Eagler
Again, you shouldn't necessarily assume they have perfect control to stop an irrational panic once it starts.
If so, they would have stopped 2008 and 2001 at only minor correction level.
Once it starts turning turtle, it might not be stoppable until its run its course.
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 18, 2022, 11:00:39 PM
Is China's shaky real estate market "house of cards" 2022's Lehman Brothers?
Maybe the next Black Swan is really a Peking Duck. (Did you see what I did there? :cool:)
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 19, 2022, 09:44:17 AM
Guido Goldman leans back in his chair, feet up on desk, and lights a big fat cigar with the end of a $100 bill.
"So listen Chump, here is the deal: You buy $1000 in stawks from me today, then hold that risky dogsh|t for me for 10 years, and at the end of that 10 years I promise to buy it back off you for... $960. Sound like a deal?"
Risk-on or Risk-Off? The Buffett Indicator. Simple enough to calculate with grade-school arithmetic. Not a crystal ball, but a solid sanity check. Anything below 100% is a good investment. Anything above 100% is Las Vegas. At this level it's Las Vegas, on coke, in bed with an HIV positive hooker, playing Russian Roulette.
(This chart begins at 1950, but I assure you, it has never been at this level. Not even close. Not in 1929. Not in the entire history of the United States.)
Good luck with that.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 19, 2022, 10:32:11 AM
Could be the end of America's run unless we keep it going with a good ole war once the bottom drops out and we are exposed as fakes living way beyond our means on credit for decades..
Eagler
Title: Re: 2007 Redux Part 2
Post by: Shuffler on January 19, 2022, 11:56:42 AM
Could be the end of America's run unless we keep it going with a good ole war once the bottom drops out and we are exposed as fakes living way beyond our means on credit for decades..
Eagler
College students? :rofl
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 19, 2022, 08:43:26 PM
Setting minimum wages higher than market rates results in some higher prices. But that's not the main problem. The main problem is that it puts a bunch of people out of work. The employer doesn't hire a person whose wage is higher than what the work is worth. In economic terms, you set the price of the labor too high, and now you have a surplus of it (i.e., people who want work who now can't get it).
Setting salary caps are bad in the opposite way. The worker doesn't take a job that pays less than what the work is worth. In economic terms, you set the price of labor too low, and now you have a scarcity of it (i.e., employers who want to hire but can't get people to do it).
The more you deviate from how a free market sets prices, the worse the consequences. Deviate a lot, and you get how markets work in Venezuela, Cuba, and the Soviet Union.
All of this stuff is well laid out in an excellent and short book: Economics in One Lesson, by Hazlitt. Or a longer one that is a more thorough: Basic Economics, by Sowell. These are marvelous books. On my list of 10 best and most-useful books to read in one's life.
that reminds me of back in 98 when I was working as a temp at this company. I was there to replace a lady that was out for 6 weeks due to surgery. the job was stupidly simple and easy. I would do a day's work in 2 to 3 hours. so I would ask to help somebody else. then I would finish their work too. so they stopped having me help. so I asked to speak with the manager, told him I couldnt stick around making 15 or 20 bucks a day. wont even pay for the gas. so they let me go, temp agency got mad and wouldnt give me any more work. company went under like 4 years later. too many lawsuits because they were a subcontracor to a couple of other companies that skimp on work to save a couple of hundred bucks per house.
I could have done the work of 3 or 4 people there in a day. not because I was smarter, I could just type faster. I am not a workaholic, just I always followed my one rule, dont mess with my pay and I'll stick around. other than a few weeks here and there only had 4 jobs in my life.
semp
Title: Re: 2007 Redux Part 2
Post by: Brooke on January 19, 2022, 09:26:53 PM
And because semp is awesome! :aok
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 20, 2022, 10:18:26 AM
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 20, 2022, 10:28:42 AM
So will the next war start before the crash or after it?
I say after as it will be much easier to spin up the needed patriotism needed for such an engagement if the public is desperate as they see their bloated way of life going down the drain...
But after that stirring rambling speech yesterday from our fearless leader who is worried?
Anyone with more than half a brain should be!
Eagler
Title: Re: 2007 Redux Part 2
Post by: TheBug on January 20, 2022, 11:12:13 AM
As CptTrips was providing good info on the market, I apologize for getting it closed
I will refrain from including that subject matter in this thread
Eagler
You're such a lying ahole.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 20, 2022, 11:28:58 AM
Shove it bug
I have not mentioned what locked the other thread
Eagler
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 20, 2022, 12:43:38 PM
Today is a great example of what's wrong with the market...
Weekly jobless claims jump to 3 moth high and stocks are up across the board as they take this bad news as good to keep the feds fingers in the cookie jar..
When bad news actually moves the market lower consistently I will believe the fed is actually getting out
Eagler
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 20, 2022, 01:10:17 PM
lol what you call the market is actually stockbrokers who only make money if they get clients to buy or sell. you should watch the wolf of Wallstreet, that tells you pretty much everything you need to know.
semp
Title: Re: 2007 Redux Part 2
Post by: TyFoo on January 20, 2022, 01:24:13 PM
Today is a great example of what's wrong with the market...
Weekly jobless claims jump to 3 moth high and stocks are up across the board as they take this bad news as good to keep the feds fingers in the cookie jar..
When bad news actually moves the market lower consistently I will believe the fed is actually getting out
Eagler
"The sun will come out tomorrow. . . . , So ya gotta hang on 'Tilllllll tomorrowwwwww, Come what mayyyyyy, Tomorrow! Tomorrow! I love ya Tomorrow!
You're always A day awayyyyyyyyyyyy!"
"Annie 1977"
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 20, 2022, 02:57:03 PM
Today is a great example of what's wrong with the market...
Weekly jobless claims jump to 3 moth high and stocks are up across the board as they take this bad news as good to keep the feds fingers in the cookie jar..
When bad news actually moves the market lower consistently I will believe the fed is actually getting out
Eagler
Not necessarily a cause and effect.
There will always be variation and Bulls and Bears try and feel out the equilibrium point like a blind man with a cane. Also, things never happen in a straight lines. After the last couple of down days there always be a temporary retracement to tidy up any over-extensions.
It may mean nothing more than that. That's why I don't care about day-to-day granularity fluctuations. I'm not a day-trader. I think in terms of quarters and years. Except for extraordinary events like war or days of rate hikes.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 20, 2022, 03:47:22 PM
Just early market manipulation as it closed over 300 points down
As they were up 300 earlier that's a 600 point swing over no real new news...manipulated
Eagler
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 20, 2022, 03:55:07 PM
And the Fed hasn't even done anything yet.
Tapering is not tightening in my book. You are easing on the accelerator pressure, but you are still accelerating. Mar 15 is the first time they will start actual tightening. Everything happening now is just foreplay. ;)
Reading various investor comment sections, it's amazing how many people still don't believe the Fed will tighten.
Denial ain't just a river in Egypt.
Title: Re: 2007 Redux Part 2
Post by: Brooke on January 20, 2022, 11:19:07 PM
lol what you call the market is actually stockbrokers
Stock brokers are just about always only a minor influence on the market because they are only one small piece of it. Since 2008, government and Fed action have been the main influences.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 21, 2022, 12:27:41 AM
Stock brokers are just about always only a minor influence on the market because they are only one small piece of it. Since 2008, government and Fed action have been the main influences.
how do you think wall street makes money?
all the firms depend on selling or buying. that's how they get bonuses.
semp
Title: Re: 2007 Redux Part 2
Post by: Brooke on January 21, 2022, 02:31:40 AM
all the firms depend on selling or buying. that's how they get bonuses.
semp
It's like car salesmen. Car salesmen might skew the price cars here and there, but the general prices of cars and trucks are determined by factors much larger than the effect of car salesmen.
The financial market overall is stocks, bonds, debt, and derivatives altogether.
It is about a quadrillion dollars worth of stuff.
Issued by, bought buy, traded by, and facilitated by an enormous complex system. Stock brokers are one tiny part. Even for the tiny fraction of transactions stock brokers are involved in, their clients are influenced by more than just the broker (who is like a salesman): client's internal thoughts, world conditions, market trends, news, etc.
Its a big collective, complex system like the weather.
The Federal government can exert major influence. Entities with enough influence to get the Federal government to do things can exert major influence. Enough entities all doing the same thing like a school of fish (like all stupidly buying crappy mortgage-backed securities pre 2008) can exert major influence. That's not stock brokers.
Yet even all of that might not be able to skew the market forever. Eventually, things get priced by the gigantic, complex collective system overall.
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 21, 2022, 06:05:12 PM
This market is surprising even me. I was really expecting a brief relief-rally before the next leg down.
I mentioned that things seemed to be moving in an accelerated mode compared to past crashes. Perhaps that is just a function of how far the Fed has pulled back the bow string. This thing has been trembling, just dying to be released for years now.
And the Fed has not. Even. Done. Anything, yet. True tightening probably won't even start until mid-March. And some are thinking up to FOUR or FIVE rate hikes this year???
And Russia hasn't invaded Ukraine, yet.
And China hasn't invaded Taiwan, yet. (which would put > 60% if the worlds semi-conduct capacity in their hands)
Hold on to yer knickers, ladies. This year is going to get sporty.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 24, 2022, 01:06:50 PM
Is that a little invasion into Ukraine or a large one? :)
And it's not even February yet...
Eagler
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 24, 2022, 01:20:49 PM
Is that a little invasion into Ukraine or a large one? :)
Shrug. I was hoping he'd take the off-ramp and claim he won a victory by getting the West's attention and schedule future talks. I think now he has talked so much guff that he is painted himself into a corner. He is about to get written response from us this week that will amount to , "Yeah, no. Those demands are ridiculous. " So We should find out soon. I don't see how he backs down at this point without looking like the West stared him down.
I wouldn't expect him to go past the Dnieper on a broad front. Though, he just run along the coast to Odessa and take a swath cutting them off from the sea. Either way, if he steps one foot into Ukraine he needs to end up with a land bridge to Crimea to justify what this will cost him.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 24, 2022, 04:10:24 PM
I think China is waiting on our response or lack of one with Russia before they move on Taiwan
I think with China there will not be all of this...their move will be sudden and unannounced
Eagler
Title: Re: 2007 Redux Part 2
Post by: Shuffler on January 24, 2022, 04:14:17 PM
the treaty says an attack on one member is an attack on all. just that simple.
I'm not sure if you are referring to Taiwan or Ukraine, but neither are members of NATO. Neither do we have defense treaty obligations that I'm aware of.
I'm rooting for Taiwan and Ukraine, but cold hard facts are neither represent a fundamental U.S. interest. I'm willing to spend "some" treasure in assisting them, but I'd not be willing to see American blood spilt to protect those borders. We need to start picking our fights more carefully. And getting in entanglements is a lot easier than getting back out.
Gaffs aside, I hope those working directly with those militaries are being very clear about the extent to which we are willing to get directly involved. At least unilaterally.
$0.02.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 24, 2022, 08:38:40 PM
I stand corrected.
but still think nato will send troops, they can't let Russia take over another country. right now we have national guard from Texas, i think, training then. but it's a delicate situation the guy has and yes it was a stupid question.
he says yes and suddenly we are committed and zorro news starts screaming about another war or decline to answer like he did and zorro news is so over him for refusing to answer.
already an embargo or whatever you call it has been promised. the real question is what is Russia gonna do. stand near near the border like the marines uber drivers, full invasion? nobody knows.
semp
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 24, 2022, 10:46:54 PM
8500 troops on standby in the usa.
reminds me of the movie the day after.
semp
Title: Re: 2007 Redux Part 2
Post by: Brooke on January 24, 2022, 10:58:40 PM
Wag the Dog -- a "fictional" movie that remains relevant, decade after decade.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 24, 2022, 11:02:41 PM
but still think nato will send troops, they can't let Russia take over another country.
Yeah, no. I'm 99.99998% sure that will never happen.
I haven’t read thru the NATO treaty, but I’m pretty certain it would be narrowly drawn. Member nations aren’t give NATO council a blank check to get their country entangled into any war that comes around. They are only signing on to commit their militaries in the event of another member nation being under attack.
That wouldn’t include personnel who happen to be in Ukraine training, etc. That is not an attack on a member nation. Possibly an attack on our embassy would as that is considered sovereign territory, but that is putting a fine point on things.
That’s why NATO was with us in Afghanistan; because the US homeland had been attacked from bases there and so triggered the NATO treaty. They however did NOT choose to follow us on into Iraq. They simple told us there is no evidence the Iraq attacked the US homeland or territories so that is outside NATO’s purview. Good luck.
It’s why they did not send NATO troops to defend Georgia. It’s why they did not send NATO troops to defend Crimea. It’s why they won’t send NATO troops to defend Ukraine.
That doesn’t mean nations that happen to be in NATO might coordinate to provide military assistance under their individual nations flag. Like our “Coalition of the Willing.” Several NATO countries in that. But that didn’t make it NATO.
NATO will deploy troops to eastern NATO member countries. To calm them and let them know we WILL not accept any attack on them. We have a treaty obligation to do so. Many of them border Russia. Their concern is reasonable. We will beef up shows of our muscle there, but not in Ukraine, but NATO members near Ukraine.
It’s really an EU problem, not a NATO problem. If they want to sit at the grown-ups table it’s time for them to run their own house. The next logical jurisdiction would be the UN. But that would be pointless as China and Russia are in cahoots and each will use their security council veto to shield the other from the actions they will both be undertaking soon. They both have vetoes. Russia gets Ukraine, China get Taiwan. So the UN is powerless here. Back to the EU then. You can’t tell me this is a US problem more than a German or French problem. We don’t live on that continent.
I can see the US helping out with money and equipment and intel and supplies and training outside of Ukraine. I can see us raising holy hell and coordination sanctions and economic punishments including seizing the electronic funds of many of Vlad’s wealthy client oligarchs. How happy would they be to see all their accounts wiped to zero with a note, “You can thank Vlad for this. When he’s gone, your money reappears.” ;)
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 25, 2022, 08:59:52 AM
Yep and most are too ignorant to see it happening under their nose again...
War is proven to have pulled us out of a great depression once ...
Neither conflict will provide economic gain for the US.
Neither will prompt the kind of full scale conversion to war-time production that WWII did.
These are regional wars. We will sanction Russia, but they are pretty much used to living in a permeant state of economic sanction so it might not have much effect, but certainly isn't any economic advantage to us. We might sell a little more LPG to EU, but not enough to make a huge difference to our economy. We can't physically transfer enough of it to make much difference. We have no pipeline to the EU and there is only so much you can carry over is ships.
A conflict with China over Taiwan will not last long enough to need war-time conversion of the economy. And economic sanction against China will harm us almost as much as it does them. That's not to say we shouldn't sanction both, it just means there is not economic gain for us in either scenario.
In both cases, it will not lead to the economic revitalization that WWII prompted. It will look more like the economic drag that the cost of the Vietnam War had, that led to the economic "Malaise" and inflation of the 1970's.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 25, 2022, 10:35:50 AM
Yep and most are too ignorant to see it happening under their nose again...
War is proven to have pulled us out of a great depression once ...
Eagler [/quote
Modern wars won’t last long enough to have a positive significant economic impact. Also remember, the Russians have the capability of using conventional means of hitting the US mainland. I think we spent to much time fighting goat herders and most Americans are unawares that countries exist that are capable of making things in our next of the woods go boom.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 25, 2022, 12:20:26 PM
If you don't understand the difference of what was then and what is now I can't help you
Eagler
you still thinking of ww2. that helped. but no other war has helped us pull out of a recession. wars now a day are good for some people, they become rich. the average Joe may get a good paying job but the numbers are skewed because we are spending billions of dollars in wars and shows a booming economy but it's just numbers, the average Joe with a good job is paying for all those products that we are basically burning.
take for example me, I was in the marines, the job I had was given to another guy who made several times what I did. that's how government friends made money. private contractors are paid much more.
what you do now is speculate based on current government. but if you look at past trends you are relying on the wrong 0eople and you misunderstanding of current situation.
semp
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 25, 2022, 02:28:27 PM
Never said it would..but lets start with 8500 boots on the ground and go from there...
I am saying that if the country and or globe turns to financial ruin a war will be spun up to pull us all out of the quagmire
A nice conventional war ... maybe with a terror based element impossible to defeat like the last ones we were in
Especially if the petrol dollar collapses further the US will have to show strength in an attempt to keep the dollar king
Once it's dethroned and the average joe dumbarse loses his bloated life style the war will be in country - ours
Eagler
Lol, so the US is making Russia attack Ukraine so we can then go to war against them to improve the economy and then start a civil war in the US so they can force us all to get vaccinated. Lol... :noid
You should stop posting.
Title: Re: 2007 Redux Part 2
Post by: Brooke on January 25, 2022, 09:03:46 PM
Wag the Dog isn't about improving the economy.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 25, 2022, 09:43:56 PM
it's just a book. the funny thing about books is that you can pick any book and make it fit into the current, past or future situation.
i can think of how the lion king can fit right into our present time.
semp
True, one can read stuff into anything.
But some books are written to more specifically explore societal/governmental angles, such as 1984, The Mandibles, Altas Shrugged, Primary Colors, Brave New World, One Day in the Life of Ivan Denisovich, The Handmaid's Tale, and so on.
Despite being just books, some of those are influential to people's thinking. The Bible, the Qur'an, the Torah, The Communist Manifesto, Common Sense, and On the Origin of Species are all books.
Media and the education system are major ways people are influenced. Books and movies are part of that.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 26, 2022, 12:40:04 PM
first time I heard of 1984 was in 1984. ever since then I come up every couple of years about how it applies to whatever year.
20 years ago people were quoting nostradamus. 2 years ago it was the Manchurian candidate.
it all depends on which book has become popular over the years. 1984 is at the top and its been since 1984.
semp
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 26, 2022, 01:48:17 PM
Oh, that incredible, innovative, stable store of value that can't be diluted by central bank money printing. Keep your wealth safe!
Title: Re: 2007 Redux Part 2
Post by: Brooke on January 26, 2022, 01:53:40 PM
1984 has been a major and influential book since it was written in 1949. It even has its own adjective in common use in the English language -- "Orwellian."
However, if you lived in China, the book was only available as of 1985. It was banned prior to that.
Have you read 1984? People know about it, but it is a great book to read even so, masterfully written.
1984, Atlas Shrugged, The Mandibles, and Brave New World are, I think, some of the most-important books in the world, but also good stories.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 26, 2022, 02:10:12 PM
1984 has been a major and influential book since it was written in 1949. It even has its own adjective in common use in the English language -- "Orwellian."
However, if you lived in China, the book was only available as of 1985. It was banned prior to that.
Have you read 1984? People know about it, but it is a great book to read even so, masterfully written.
1984, Atlas Shrugged, The Mandibles, and Brave New World are, I think, some of the most-important books in the world, but also good stories.
I read the condensed version back in the 80s. but a brave new world was required reading in my class back in 78. we also compared it to how society worked back then. maybe that's why I have that opinion about books. 7th grade was tough.
semp
Title: Re: 2007 Redux Part 2
Post by: Brooke on January 26, 2022, 02:44:06 PM
Did you like those books themselves, though? Two excellent writers, Orwell and Huxley.
I thought the books were great.
Recently, I also really liked The Mandibles, by Shriver. Independent of theme, I think the writing itself is very good.
Title: Re: 2007 Redux Part 2
Post by: TyFoo on January 26, 2022, 03:29:45 PM
I liked Brave New World over 1984.
I thought it more plausible. Just turn the O2 down at birth and you get your worker bee's to support the hive. As an example; The Elevator operator was as happy as could be every time they punched the button for the passengers. "Roof!". . . . lol Like they say in Letterkenny "If you love what you do, you will never work a day in your life".
1984 reminds me more of what loosely goes on in country like China.
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 26, 2022, 03:33:47 PM
Did you like those books themselves, though? Two excellent writers, Orwell and Huxley.
I thought the books were great.
Recently, I also really liked The Mandibles, by Shriver. Independent of theme, I think the writing itself is very good.
I read Brave New World and 1984 years ago. I seemed to remember liking 1984 better. Both were good though.
I've tried at least 4 times to grind through Atlas Shrugged over the years. I can't do it. There is plenty to argue about the philosophical underpinnings, but that wouldn't bother me. What bothers me is that it is such cataclysmically, galactically bad writing.
I understand it is an "important" book. But important due to the influence it's had, like Das Kapital, or Mein Kamph. At least no one has had the bad taste to try and novelize those. Atlas Shrugged is the most one dimensional, thinly veiled political pamphlet disguised as a novel I have ever seen since.... Fountainhead. :cool: It's not even college sophomore level writing. The story is shallow, and utterly transparent. The characters, to be generous, are nothing more than cardboard cutouts. Every time I've tried to read it, I have to put it down due to the migraine it induces from my constant eye-rolling.
The people who love that book love it because it parrots the particular, narrow eco-political religion they espouse; not because it has any passable resemblance to a well written novel.
Ayn Rand has never written a single good novel or screenplay I know of. She should have stuck to essays and articles. If you're going to drop a 1000 page boat anchor on my desk and call it a novel, I'm going to judge it as a novel and not as a political manifesto. Rand's works are great novels the way Ishtar was a great movie.
I'd rather read the Left Behind novels than make another try at Atlas Shrugged again. :rofl
Title: Re: 2007 Redux Part 2
Post by: guncrasher on January 26, 2022, 03:58:51 PM
Title: Re: 2007 Redux Part 2
Post by: CptTrips on January 28, 2022, 02:20:52 PM
Grantham is another who the Bull's love to dump on.
Just contemplate the fact that Japan, in the year 2022, has STILL not recovered fully the high-point in the later 80's.
99% of the time buy and hold long term is the best course of action. Except when it's not.
Title: Re: 2007 Redux Part 2
Post by: Eagler on January 31, 2022, 07:23:44 AM
https://youtu.be/YN1TWSIZccc
Raising rates are key .. and raising them significantly is required but ain't going happen for many reasons most which were self created over the years of the "booming economy" when the rates should have been raised and the fed withdrawal its free money but greed prevented it..
Eagler
Title: Re: 2007 Redux Part 2
Post by: Eagler on February 02, 2022, 02:16:02 PM
Today proves Wallstreet thinks its all bluffing...
A day of terrible numbers and the market rises...
As it has been manipulated for years I can understand their disbelief.
Eagler
Title: Re: 2007 Redux Part 2
Post by: CptTrips on February 03, 2022, 04:06:09 PM
I had to email a little ribbing to my Bull friend today after market close. I told him on the bright side, he will look back on days like this fondly. "Remember the good old days when the drops were no more than 3-4%? Oh, we didn't know how good we had it."
He only replied with a counter link:
I can't tell if that is capitulation or he is nose-blind to self-irony: (warning language)
Title: Re: 2007 Redux Part 2
Post by: Eagler on February 11, 2022, 12:57:19 PM
Rumor has it Putin ordered the invasion so market is dropping at this time
Eagler
Title: Re: 2007 Redux Part 2
Post by: CptTrips on February 11, 2022, 11:21:50 PM
And the Fed is still buying QE. And the Fed hasn't touched rates yet.
Word is good chance at 0.5% in March when they announce they are also buying no further QE. (I'll believe that when I see it.)
Originally everyone was saying two, maybe three rate hikes this year. Goldman now thinks SEVEN rate hikes possible. Lol.
Wall Street is going to be a smoldering hole in the ground once the ETF kiddies finally wake up from their nappies. And that's something to consider as well. So much money is is in ETF now where you can get near instant pullout if the panic starts. In the old days, it could take a day to get an order fulfilled. It will be interesting to see if that is an accelarant like pouring kerosene on a kitchen fire.
It might be a bloody spring. I still say... (https://www.memesmonkey.com/images/memesmonkey/ab/abab327681a13a3a4c02016383f71821.jpeg)
Title: Re: 2007 Redux Part 2
Post by: Eagler on February 16, 2022, 01:27:50 PM
So if inflation is over 7% they will have to raise rates to 8%? Yeah sure they will...lol
Saw where the EU is freaking out as they are going to raise their rates to negative .25...NEGATIVE!!!
And that is not criminal how?
Eagler
Title: Re: 2007 Redux Part 2
Post by: CptTrips on February 16, 2022, 02:17:13 PM
checked about 20 websites, not illegal but not good policy.
The question isn't that clear cut because it has never been tested in court and the Congressional mandate doesn't explicitly give them that power. Other countries have neg rates, but other countries do lots of stuff that is illegal here. Other countries don't have some of our constitutional constraints.
So essentially you money could be sitting tight in your savings account and on your monthly statement there would suddenly be a "5% debit Fed negative rate". WTF. They can't just reach into your account and take money. In this country there is a good argument that would be seizure of property without due process. And due process isn't just what a couple of bankers decide it is. It would have to be a court order to seize your property. Or it would be like them instituting a tax than no elected official has voted for. That would infringe on Congress' power of taxation which raises Constitutional concerns.
Fed will "claim" they can do it, but they would claim the right of Prima Nocta if you let them. That doesn't mean they really have that right. They'd have to try it first and a precident would have to be set in court.
Until it has been tried and challenged and upheld in court, it's not clear it would stand Constitutional scrutiny. It would certainly be challenged. It would be like the Fed bankers showing up at your house and saying, we'd like to confiscate you house, mmmmm ok? Oh and your car too. You got a court order? No, we're the Fed! I'd give it less than 50% chance of surviving a court challenge which is why they've been scared to try it even though they keep hinting they could if they wanna.
But again, it doesn't matter. They can create an "effective" negative rate with QE which dodges the legal issue. They are hiding it by taking your future money and putting it on the national debt. But since you don't see that on your current bank statement, they don't get taken to court.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on February 16, 2022, 06:28:56 PM
well think about it logically, would you keep your money in the bank? you would take it all out, I know I would. on the other hand i imagine you taking out a loan and they pay you for it.
that's why the so called experts are saying that's its possible but a bad idea. now the feds have indicated that the rest is gonna go up next meeting.
but right now it's just hypothesis. I come from a country that by Friday your money was worth a lot less, just caught the beginning of it. I couldn't have money to go to the movies, went back 5 years later and popcorn, sandwiches, sodas and entry for 4 people was a couple of dollars.
semp
Title: Re: 2007 Redux Part 2
Post by: CptTrips on February 16, 2022, 07:02:35 PM
well think about it logically, would you keep your money in the bank? you would take it all out, I know I would. on the other hand i imagine you taking out a loan and they pay you for it.
What do you do once all money is digital? When there is no "money" to take out? They just remove some digits from your records. There is just less there the next time you use Apple Pay or Bitcoin.
And which bank will give you that loan they will pay you to take out? Pro tip: no one will pay you to take out a loan. As a consumer, you will always pay positive rate on a bank loan. The banks will simply make higher profit for giving it. You will still pay the bank interest on the loan as well as the neg rate taking money out of your savings account.
All I'm saying is, it is not affirmed as legal. It has not been tried here and not been upheld in our courts. They know that. They will claim they "can" do it for future flexibility, but it is doubtful it would survive a Constitutional challenge. If it does, then our constitution no longer means anything.
If they can take your property without due process, they can imprison you without a trial.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on February 16, 2022, 08:49:07 PM
What do you do once all money is digital? When there is no "money" to take out? They just remove some digits from your records. There is just less there the next time you use Apple Pay or Bitcoin.
And which bank will give you that loan they will pay you to take out? Pro tip: no one will pay you to take out a loan. As a consumer, you will always pay positive rate on a bank loan. The banks will simply make higher profit for giving it. You will still pay the bank interest on the loan as well as the neg rate taking money out of your savings account.
All I'm saying is, it is not affirmed as legal. It has not been tried here and not been upheld in our courts. They know that. They will claim they "can" do it for future flexibility, but it is doubtful it would survive a Constitutional challenge. If it does, then our constitution no longer means anything.
If they can take your property without due process, they can imprison you without a trial.
think you are getting a bit paranoid. the what if always assumes something, but you know what assume means. on average when you go to the grocery store at least 1 item has a different price than what is on the shelf. so they take your money, does that mean they will imprison you without a trial?
by the way, all my money is digital, i keep something like 20 dollars in cash. everything I pay is digital, havent written a check in years. it saves time.
semp
Title: Re: 2007 Redux Part 2
Post by: Brooke on February 16, 2022, 10:37:53 PM
There are two forms of interest rates: nominal and real.
Nominal is what the number says, as in "this account yields 2% interest" or whatever.
Real is what that number is minus inflation. So, if your account yields 2% interest per year, but inflation is 8% per year, your real rate of return is -6% per year (i.e., you are losing 6% of your purchasing power per year).
Today, some countries' bonds have negative nominal yield. You can buy a bond for $100, say, and get $80 back at the end of 30 years.
And we have negative real rates in most countries currently, including the US. (Official inflation is 7.5%. But the official measure understates real inflation by substituting hamburger for steak if steak gets expensive (hedonics). Using 1990 basket of goods, inflation is currently 11%. See http://www.shadowstats.com/alternate_data/inflation-charts )
In both cases, people are paying the borrower for the privilege of loaning it money. A great gig while it lasts.
Why would anyone buy bonds in that situation? Three reasons. First is that some places (pension funds, for example) have to put their money in government bonds according to to their own internal regulations. Second is that large amounts of money are cumbersome to turn into paper currency and vault it -- takes time and reduces fluidity of using the funds. And if it's not in paper currency, it's in a debt instrument of some sort (bond, CD, money-market account, etc.), not paper dollars in a vault. Third is that, even though a negative-yielding bond is a rip off, if interest rates go even more negative, the bonds you have go up in value, and then you can sell them (i.e., speculation in bond prices).
Countries with paper currency can't go too negative on rates, or people withdraw their money as paper and vault it. But, if you have only electronic funds and EBT-type cards, the government can go to whatever rates it wants, negative or not. There is no paper money to take out and vault. Also, you can give out stimulus and have conditions on it, like "this money goes away if you don't spend it by this date" or "this money can be used to buy only these things, but not those things". And the government can track every purchase. That is why many governments want to go cashless. They will tell you the reason is to combat money laundering and illegal activity.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on February 16, 2022, 11:40:54 PM
There are two forms of interest rates: nominal and real.
Nominal is what the number says, as in "this account yields 2% interest" or whatever.
Real is what that number is minus inflation. So, if your account yields 2% interest per year, but inflation is 8% per year, your real rate of return is -6% per year (i.e., you are losing 6% of your purchasing power per year).
Today, some countries' bonds have negative nominal yield. You can buy a bond for $100, say, and get $80 back at the end of 30 years.
And we have negative real rates in most countries currently, including the US. (Official inflation is 7.5%. But the official measure understates real inflation by substituting hamburger for steak if steak gets expensive (hedonics). Using 1990 basket of goods, inflation is currently 11%. See http://www.shadowstats.com/alternate_data/inflation-charts )
In both cases, people are paying the borrower for the privilege of loaning it money. A great gig while it lasts.
Why would anyone buy bonds in that situation? Three reasons. First is that some places (pension funds, for example) have to put their money in government bonds according to to their own internal regulations. Second is that large amounts of money are cumbersome to turn into paper currency and vault it -- takes time and reduces fluidity of using the funds. And if it's not in paper currency, it's in a debt instrument of some sort (bond, CD, money-market account, etc.), not paper dollars in a vault. Third is that, even though a negative-yielding bond is a rip off, if interest rates go even more negative, the bonds you have go up in value, and then you can sell them (i.e., speculation in bond prices).
Countries with paper currency can't go too negative on rates, or people withdraw their money as paper and vault it. But, if you have only electronic funds and EBT-type cards, the government can go to whatever rates it wants, negative or not. There is no paper money to take out and vault. Also, you can give out stimulus and have conditions on it, like "this money goes away if you don't spend it by this date" or "this money can be used to buy only these things, but not those things". And the government can track every purchase. That is why many governments want to go cashless. They will tell you the reason is to combat money laundering and illegal activity.
goverment doesnt set rates, banks do.
semp
Title: Re: 2007 Redux Part 2
Post by: Eagler on February 17, 2022, 07:14:20 AM
Its all heading to a currency reset...probably going to a gov crypto as it will be much easier to control
Dollars will be worthless..see 1930 Germany to see where it is headed
Some talk suggests it would be fed controlled so local banks would not be needed
Once they have that in place the show changes for sure..
Eagler
Title: Re: 2007 Redux Part 2
Post by: Brooke on February 17, 2022, 01:32:06 PM
In common financial parlance, "government interest rates" mean rates on treasury notes and bonds (set through US Treasury's discretionary participation in auctions) and Fed rates (set by the Fed). The US Treasury is of course part of the government.
As for the Fed: https://www.stlouisfed.org/open-vault/2018/november/is-federal-reserve-part-government
"With authority derived from Congress via the Federal Reserve Act of 1913, the Fed serves as a politically independent and nonpartisan entity within government. . . ."
More specifically, the Fed consists of Federal Reserve Banks (which are private banks, but selected by and operating with special powers through the authority of the Federal government) and the Federal Reserve Board (who are selected by the President and who control the activities of the Federal Reserve).
It is specifically the government-appointed Federal Reserve Board that decides Fed rates. And the banks do what the FRB says.
Title: Re: 2007 Redux Part 2
Post by: guncrasher on February 17, 2022, 01:53:28 PM
a couple of years ago I wanted to buy a car, applied at 2 credit unions and chase bank. had good credit so my fico was good. so I had no problem getting loans. rates were from 1.5 to 3 percent for a used car.
pretty sure the fed rate was the same as I applied on the same day.
semp
Title: Re: 2007 Redux Part 2
Post by: Eagler on February 17, 2022, 01:55:40 PM
When you really study monetary policy is all seems to be a scam ... like your little sister being the banker in a family game of monopoly...
If it isn't backed by anything how can it truly be worth anything?
Today the only thing providing support for the us dollar is its military might sadly
Eagler
Title: Re: 2007 Redux Part 2
Post by: Brooke on February 17, 2022, 04:22:56 PM
There are all kids of debt. There are forms of government debt with rates set by the government. There is non-government debt (credit cards, mortgages, auto loans, etc. -- personal loans from you cousin Vinny), with rates set by non-government entities.
Government rates have a large impact on that whole ecosystem of debt, but they don't determine everything about non-governmental debt.
In my previous post, I was specifically talking about government-controlled rates.
Title: Re: 2007 Redux Part 2
Post by: CptTrips on February 19, 2022, 02:45:28 PM
Next week could give the Ides of March a run for it's money.
Title: Re: 2007 Redux Part 2
Post by: Eagler on February 24, 2022, 08:09:53 AM
Well there's now a war to throw the blame on for the crumbling economy...nothing to do with decades of very poor economic decisions by our "leaders"
Eagler
Title: Re: 2007 Redux Part 2
Post by: Eagler on February 26, 2022, 07:53:13 AM
Cyber attacks will be the response to removing Russia from SWIFT..
Once those get going it could be the wild wild west instantly just about everywhere depending on what is hit and when..
But will not be for ransom but to destroy infrastructure
With the right amount of successful infections we would turn on ourselves in no time
..oh yeah it will negatively affect the market but I don't think that will be your 1st concern.