The Great Unwinding

[CptTrips]

Kinda feel for those that purchased homes last year when prices were peaking..

Have to wonder how many will bail when they go severely underwater

That's part of what's driving this incredible number of deposit cancellations  People are doing the math and realizing they will be paying 30% more for the house than they are likely to ever get back for a long time.  And paying the highest mortgage rates for it than they've seen in decades.  Enough that it's worth it to them to surrender the deposit.  Imagine realizing you'll be 100k underwater on move-in day.  LoL.  And perhaps facing a likely lay-off anyway.

Same thing is happening with car loans.  A lot of people are starting to let their new vehicles get repo'd.  Underwater and facing layoffs.


I'm going on record.  (I usually try to avoid strongly worded predictions.) That way you can all point and laugh at me if I'm wrong.   

I think the waiting is over.  I think the inflection point comes between now and 17 Feb 23. 

The market has been bouncing around in a collapsing wedge of trend lines.  Those line are going to converge before Feb 17.  The market will have to decide to either breakout and start a new secular Bull Market that might go one for another year or two, or begin the long painful slide down a razor blade toward the historical mean.

I personally can't see any reasonable scenario leading to the former. 

I'm short, but I don't recommend that for most people.  But lightening up on equities and having a lot of liquid cash would not be imprudent, IMHO.   As long as you still have your money, you can always get back in if the decision is Bull Market. 

[Chris79]

That's part of what's driving this incredible number of deposit cancellations  People are doing the math and realizing they will be paying 30% more for the house than they are likely to ever get back for a long time.  And paying the highest mortgage rates for it than they've seen in decades.  Enough that it's worth it to them to surrender the deposit.  Imagine realizing you'll be 100k underwater on move-in day.  LoL.  And perhaps facing a likely lay-off anyway.

Same thing is happening with car loans.  A lot of people are starting to let their new vehicles get repo'd.  Underwater and facing layoffs.


I'm going on record.  (I usually try to avoid strongly worded predictions.) That way you can all point and laugh at me if I'm wrong.   

I think the waiting is over.  I think the inflection point comes between now and 17 Feb 23. 

The market has been bouncing around in a collapsing wedge of trend lines.  Those line are going to converge before Feb 17.  The market will have to decide to either breakout and start a new secular Bull Market that might go one for another year or two, or begin the long painful slide down a razor blade toward the historical mean.

I personally can't see any reasonable scenario leading to the former. 

I'm short, but I don't recommend that for most people.  But lightening up on equities and having a lot of liquid cash would not be imprudent, IMHO.   As long as you still have your money, you can always get back in if the decision is Bull Market.

I’ve been trying to figure out how people could even afford a home, at least where I live, before interest rates spiked. Prices have literally doubled since late 2017, $425,000 to 800k+. Even at 3% interest and 20% down their monthly payments with escrow must be close to 5k a month.

[CptTrips]

I’ve been trying to figure out how people could even afford a home, at least where I live, before interest rates spiked. Prices have literally doubled since late 2017, $425,000 to 800k+. Even at 3% interest and 20% down their monthly payments with escrow must be close to 5k a month.

Part it is a lot of young people who were not investing\home-buying adults in the GFC.  They have an intellectual awareness of that event, but they haven't been through it.  They have no idea what it will be like.

Scarily, that is also true for a large chunk of Wallstreet.  A bunch of young, cocky, masters of the universe who thought they had diamond hands because every investment made money over the last decade.  As long as the Fed was printing money like



They don't know how to trade in any other market than that.  "Buy the dip" ain't going to work anymore.  They don't have any other plan.

[CptTrips]

Worth a read.  By his thesis, you might see an S&P below 2000.  Imagine that carnage. 

But it will be slow motion train wreck probably.  The horrible part is there will still be two or three really convincing Bear Market rallies on the way down. 

Don't get greedy and jump back in too soon.  The smart money will reap multiple harvests of muppets with their bloody scythe.

Remember wealth preservation should trump a little more profit.  Don't run out to pick up pennies off the track in front of an approaching freight train.  It ain't worth it!

If you lose 50%, you then have to make 100% on what's left JUST to get back to where you started.  It's really hard to make 100% profit.  A lot harder than it was to lose 50%.

Also remember, the NASAQ took 14 years to get back to it's last high point before the Tech Wreck.  14.  Years.  Just to break even again.

https://www.hussmanfunds.com/comment/mc230123/

[Eagler]

I think February is too soon

They can play games and keep the dance going into the year

Heck the market hasn't become anywhere near real

If they truly are trying to fix their decades of easy money..much more pain is needed imo

If it was just another expensive shell game..then they will turn the printer back on prematurely starting the bullsheet run again with higher prices to start off with which will end much worse then than if we feel more pain now

Eagler

[DmonSlyr]

This is pure payback by the hedge funds who lost their shirts on the shorts they were playing when the GME push made them lose billions on covering their shorts for thousands of stocks. This created "inflation" because they couldn't artificially keep the stocks down and a lot of people who actually sold made good money. The market really wants to run. The economy really wants to expand. Its the powers that be who screwed this up and now the retail are getting squashed while the shorts get their money back. I hope Big Tech enjoys their layoffs. They completely deserve it. Hilarious that it's coming down on them after they helped their dementia patient win. I hope they are proud of themselves. One thing that does remain constant in this world and there is no stopping it is Karma. It always comes back around.

[CptTrips]

Ever see those creepy Chinese Ghost Cities?  I think America will have it's own version. 

Ghost Suburbs.  Empty, unbought, unlived in, unneeded tracts of new homes.

The amazing powers of limitless liquidity.  Well, maybe not limitless. 




There is someone banging on the door.  It's the Piper.  He is demanding overdue payment.

[Eagler]

Looks like a place to pile in the illegal immigrants into...once they are pulled from the hotels we are housing them in now

Eagler

[DmonSlyr]

Looks like a place to pile in the illegal immigrants into...once they are pulled from the hotels we are housing them in now

Eagler

It just pisses me off so much too. Like I had a diddlyin man who served in the US army come to beg for coin from me at the gas station while they put up these illegals who are mostly men. Now I'm hearing how California is trying to allow them to become police officers. What could possibly go wrong?

[Eagler]

Between the illegals and the billions sent to big U, talk of social security going under is just ridiculous but they continue to make that statement my guess is to scare us..

Americans have discovered they can vote for the most free stuff promised by our lying leaders...

We are toast

Eagler

[CptTrips]

It's almost comedy.

[TequilaChaser]

Feel That... Whatever Comes... I will stand my ground and never kneel and never back down...

[CptTrips]

Michael Lewis' Flash Boys is an interesting read on this kind of stuff.

[DmonSlyr]

It's almost comedy.

CDEL should be burned to the ground for their manipulation, trying to screw over tiny tiny little companies. Of course the corrupt SEC won't do crap because they use CDEL to burn the market for "inflation". Curious how much they lost on their shorts during the GME fiasco, which really caused the "inflation" in my opinion because some of these hedges shorts got burnt to a crisp and had to cover. Wouldn't suprise me if they were using Aladin AI or something very similar.

[CptTrips]

Well, we know where Burry stands.

https://twitter.com/michaeljburryBC/status/1620574087394521088