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Met Winter 2021 - 2022 Banter


HoarfrostHubb
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Has a Black Friday feeling in the market today 

Vix volatility index broke out of a 18 month falling wedge last Friday and Since then the market has been up/down in a way that has preceded “bad times”

Hopefully fed support lifts it 

there are a record amount of trapped buyers who were rewarded for a year “buying the dip” and that strategy paid off till this week . Most inflows into stock market in a year ever and most leveraged market and now tons of trapped supply (buy the dip buyers who can’t buy this time )

bad news today would be interesting to see play out 

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51 minutes ago, STILL N OF PIKE said:

Has a Black Friday feeling in the market today 

Vix volatility index broke out of a 18 month falling wedge last Friday and Since then the market has been up/down in a way that has preceded “bad times”

Hopefully fed support lifts it 

there are a record amount of trapped buyers who were rewarded for a year “buying the dip” and that strategy paid off till this week . Most inflows into stock market in a year ever and most leveraged market and now tons of trapped supply (buy the dip buyers who can’t buy this time )

bad news today would be interesting to see play out 

waiting for one last dip in BTC before i make my first buy and hodl.  hoping todays the day.

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Oh look, another Friday with Evergrande panic that will some how get "worked out" every weekend. They have had to sell personal assets to make $250 million in interest payments the past few months, the writing is on the wall. I'd love to know how Blackrock and Vanguard are playing this given how much they hold. Another financial instrument they can pass off to an unsuspecting party?  

If SPY breaks below 450 it could really drop, I'm thinking 438.

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4 hours ago, tunafish said:

what are the signs i'm looking for to buy, if not today's dip?

Signs would be the fed announcing they won’t accelerate the tapering of asset purchases a idea they floated Tuesday and well that went well lol

 

I wouldn’t buy bitcoin or SP 500 or even try

The market is just like a spoiled little brat that always gets his way 

All the buy the dip buyers from the whole year that were rewarded every. single. time. Just got their face ripped off 2x this week . so the buyers are underwater and the Fed needs to step up and tell the market literally we will step in .

Bc right now they did the opposite Tuesday and a fragile Leveraged market started crumbling .

We now sit at critical support . Right on a trend line from the initial rise from March 2020 . We need a bounce off 4510

below that is 4435 on SP500 and then a big air Pocket below that 

BItcoin would Likely  be in the mid to upper 40 thousands if SP fell to 4435 
 

 

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All the top 100 coins fell 20-25% in 10 mins 

I have a good chart that shows a very high correlation of liquidity conditions / and risk asset directional price correlation between stocks and bitcoin.  They move in the same direction only crypto’s moves are magnified in either direction

The fed needs to get its head out of its azz bc if they don’t let the market know ..that they stand ready that move could come to equities next week 

Two fed governors had to step down this year due to buying / selling stocks at times that correlated with their advanced knowledge of what central bank new policy was going to be .

I hope Fed chairman’s Powell is probed On If he sold stocks prior to making the perplexing speech that has sent markets tumbling . He did a 180 and used omnicron variant as a reason tbe fed would print less money citing any potential impact of the variation Would make supply chain bottlenecks last long (which has led to higher inflation) the comedy is the fed has. No tools to adjust or weaken a supply chain bottlenecks 

However apparently they think trashing asset prices (of stocks and soon uninflating housing ) is going to make The pain of rising milk as gas prices better . 
morons yes , and they were the clowns that adjusted their inflation goals higher last summer ..begging for a little more and make they got it and look like idiots 

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2 hours ago, STILL N OF PIKE said:

All the top 100 coins fell 20-25% in 10 mins 

I have a good chart that shows a very high correlation of liquidity conditions / and risk asset directional price correlation between stocks and bitcoin.  They move in the same direction only crypto’s moves are magnified in either direction

The fed needs to get its head out of its azz bc if they don’t let the market know ..that they stand ready that move could come to equities next week 

Two fed governors had to step down this year due to buying / selling stocks at times that correlated with their advanced knowledge of what central bank new policy was going to be .

I hope Fed chairman’s Powell is probed On If he sold stocks prior to making the perplexing speech that has sent markets tumbling . He did a 180 and used omnicron variant as a reason tbe fed would print less money citing any potential impact of the variation Would make supply chain bottlenecks last long (which has led to higher inflation) the comedy is the fed has. No tools to adjust or weaken a supply chain bottlenecks 

However apparently they think trashing asset prices (of stocks and soon uninflating housing ) is going to make The pain of rising milk as gas prices better . 
morons yes , and they were the clowns that adjusted their inflation goals higher last summer ..begging for a little more and make they got it and look like idiots 

CEO’s and insiders have been selling record numbers of stocks in the past few months. CNBC ran a piece about it last week.  Ray Dalio feels a %15 market correction is imminent.  That would probably line up a few bridge jumpers.

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5 minutes ago, NorEastermass128 said:

A 15% drop means the DOW drops to around 30,000 or so. Doesn’t seem improbable or too ominous. 

Well, if it happened over 2-3 days it could trigger a larger sell off.  However, I’m not sure that’s even possible because of the way the circuit breakers are built-in to the market.

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3 hours ago, STILL N OF PIKE said:

All the top 100 coins fell 20-25% in 10 mins 

I have a good chart that shows a very high correlation of liquidity conditions / and risk asset directional price correlation between stocks and bitcoin.  They move in the same direction only crypto’s moves are magnified in either direction

The fed needs to get its head out of its azz bc if they don’t let the market know ..that they stand ready that move could come to equities next week 

Two fed governors had to step down this year due to buying / selling stocks at times that correlated with their advanced knowledge of what central bank new policy was going to be .

I hope Fed chairman’s Powell is probed On If he sold stocks prior to making the perplexing speech that has sent markets tumbling . He did a 180 and used omnicron variant as a reason tbe fed would print less money citing any potential impact of the variation Would make supply chain bottlenecks last long (which has led to higher inflation) the comedy is the fed has. No tools to adjust or weaken a supply chain bottlenecks 

However apparently they think trashing asset prices (of stocks and soon uninflating housing ) is going to make The pain of rising milk as gas prices better . 
morons yes , and they were the clowns that adjusted their inflation goals higher last summer ..begging for a little more and make they got it and look like idiots 

Propping up markets is not part of the Fed's mandate. This attitude of expecting the Fed to intervene every time stocks dip 5% is a big part of the problem and has contributed to driving the bubble to its present extreme. The Fed doesn't have to do anything. The reality is they stayed too easy for too long and buried their heads in the sand with respect to inflation while they claimed unemployment was their concern. They don't have that excuse anymore and inflation has been stickier than expected and way above target. If measured in the old way, CPI is probably closer to 12-14%. That's a massive political issue and causes real pain for much of the populace. You can bet the Democrats are putting a lot of pressure on Jay behind closed doors to get it under control. The Fed's best tool for combating it is dropping QE and raising rates. If it deflates the present speculative excess, so be it!  What's healthy about having hundreds of unprofitable companies trading at 20-50x sales? Or revenue-less companies like Rivian worth more than GM or Ford, or unprofitable movie theater companies touting the latest shitcoin craze because it drives activity to their stock. It's grotesque. It's run amuck and it's high time it came to an end. Raising rates will fix inflation and cleanse the markets of all this garbage.

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7 hours ago, Hoth said:

Propping up markets is not part of the Fed's mandate. This attitude of expecting the Fed to intervene every time stocks dip 5% is a big part of the problem and has contributed to driving the bubble to its present extreme. The Fed doesn't have to do anything. The reality is they stayed too easy for too long and buried their heads in the sand with respect to inflation while they claimed unemployment was their concern. They don't have that excuse anymore and inflation has been stickier than expected and way above target. If measured in the old way, CPI is probably closer to 12-14%. That's a massive political issue and causes real pain for much of the populace. You can bet the Democrats are putting a lot of pressure on Jay behind closed doors to get it under control. The Fed's best tool for combating it is dropping QE and raising rates. If it deflates the present speculative excess, so be it!  What's healthy about having hundreds of unprofitable companies trading at 20-50x sales? Or revenue-less companies like Rivian worth more than GM or Ford, or unprofitable movie theater companies touting the latest shitcoin craze because it drives activity to their stock. It's grotesque. It's run amuck and it's high time it came to an end. Raising rates will fix inflation and cleanse the markets of all this garbage.

First I respect your opinion but I believe it’s more dangerous then fed continuing to be accommodative with policy 

What is wrong with this prevailing logic amongst intelligent people is they fail to realize that monetary systems have a finite life and we have a aging Population dependent on pension system . I really noticed they can’t get their head around that and most likely because they don’t want to . 
 

There is not a floor beneath this market . It’s not SP 4300 3800 It’s much much lower , same with SP , just as speculative excess was engineered on purpose to lift assets to keep people feeling wealthier and spending  , otherwise GDP growth has been anemic . Peoples balance sheets will show insolvency if fed raised rates Past 1.5 to 2% . The ensuing asset price fall would guarantee it . (now that would clear the bad debt but it would cause a depression and more populism then we had last year .

These day’s The Economy doesn’t grow (Above 1.5%) without a new war or direct government stimulus . It’s called debt saturation .
 

Which is why the fed stepped in with a policy of asset price inflation 10 years ago . Did you notice house values go parabolic and house price to income ratios go passed a few standard deviations . That was engineered! *To keep people spending and avoid a depression because monetary systems get old and die and they wanted to kick that can * . They can’t out and out say that .
 

There is a common theme of folks not quite understand how “sick” the system is . It’s been on Fed life supper since 2009 (with maybe a break in 2018 when it fell 20%) . A sick market doesn’t take medicine it’s handled with kid gloves or it collapses . I hope people that can’t get their head around that don’t have to see it . It would be a reset of the global monetary system and I can promise America won’t have the world reserve currency in this new one , and the standard of living would be significantly lower for your kids 

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And as far as Bitcoin and SP 500 and their tremendous directional correlation .

This Rally today should be treated as a dead cat bounce that will be sold . * Unless the fed gets spooked and backs away from a faster taper an puts the vix back into its 18 month falling channel (that it massively broke out of last week) the rallies will be sold before they make higher lows or higher highs and we will retest SP 4510 when that breaks we fall way down and then BTC will break 42 K support.

I envision the fed coming to help the markets and calm them and that would probably mark the bottom . If the fed waits a long time I can see BTC 30 K no problem . We just saw a example of how fast it falls 

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13 hours ago, STILL N OF PIKE said:

First I respect your opinion but I believe it’s more dangerous then fed continuing to be accommodative with policy 

What is wrong with this prevailing logic amongst intelligent people is they fail to realize that monetary systems have a finite life and we have a aging Population dependent on pension system . I really noticed they can’t get their head around that and most likely because they don’t want to . 
 

There is not a floor beneath this market . It’s not SP 4300 3800 It’s much much lower , same with SP , just as speculative excess was engineered on purpose to lift assets to keep people feeling wealthier and spending  , otherwise GDP growth has been anemic . Peoples balance sheets will show insolvency if fed raised rates Past 1.5 to 2% . The ensuing asset price fall would guarantee it . (now that would clear the bad debt but it would cause a depression and more populism then we had last year .

These day’s The Economy doesn’t grow (Above 1.5%) without a new war or direct government stimulus . It’s called debt saturation .
 

Which is why the fed stepped in with a policy of asset price inflation 10 years ago . Did you notice house values go parabolic and house price to income ratios go passed a few standard deviations . That was engineered! *To keep people spending and avoid a depression because monetary systems get old and die and they wanted to kick that can * . They can’t out and out say that .
 

There is a common theme of folks not quite understand how “sick” the system is . It’s been on Fed life supper since 2009 (with maybe a break in 2018 when it fell 20%) . A sick market doesn’t take medicine it’s handled with kid gloves or it collapses . I hope people that can’t get their head around that don’t have to see it . It would be a reset of the global monetary system and I can promise America won’t have the world reserve currency in this new one , and the standard of living would be significantly lower for your kids 

Thanks for your reply. Here is my rebuttal:

First, I agree with several of your points: that the US has been risking its privileged status as the reserve currency, that things have not been great since the GFC (except for asset holders), that the Fed has intentionally been supporting risk assets in the hope that there would be a wealth effect, and that there's a pension crisis.

Here's where we differ. I believe that it is the continuation of current reckless monetary and fiscal policy that threatens U.S. preeminence as the preferred reserve currency. I don't know how old you are, but for much of my childhood the chief rallying cry of at least one party was fiscal conservatism and balanced budgets. For a few decades now, that stance has been sliding, spending and federal debt creation has grown increasingly unsustainable and both parties have presided over trillion dollar plus annual deficits in recent years. The Fed has enabled this recklessness with their low rates and ability to hoover up and monetize a large chunk of this debt. A nifty little trick, but not one that inspires confidence in foreign lenders. A reset, as you call it, especially if the Fed raises rates to tackle inflation, would likely strengthen the dollar and perhaps reimpose some fiscal discipline on our policy makers.

Things have not been great in the real economy since the GFC, with perhaps a few brief interludes. But the chief error of central bank policy since then has been to substitute a real economy for a financially engineered one. Keeping rates at unprecedented lows for an unprecedented period of time has changed the calculus for many managers. Back when there was a real cost of capital, a manager would consider real projects and IRRs and NPVs because if you're borrowing at 6 or 7%, you better have a good project that can return in excess of your cost of capital. Good projects tend to create good jobs. Now, with rates pegged close to zero for years and years, managers have an alternative and easier option: borrow cheap, buy back shares, drive up earnings on paper, and parachute out rich. This has been the overwhelmingly preferred option and a driver of rising wealth inequality. It's also innervated thousands of company balance sheets. Companies now feel emboldened because they feel they can demand a bail out when they get in trouble (see the airlines last year). Look at Hertz as a recent example. Bankrupt last year, now authorizing a multi-billion dollar buyback. I could write a Tip-length diatribe on the hazards of financial engineering driven by low rates, but the point is that it only creates a thin patina of prosperity during good times and makes companies less able to weather the bad.

The Fed knows they've been supporting risk assets with their policies. The problem is that people have come to accept that Fed support is limitless and therefore all assets are riskless. They feel emboldened to bid up prices to obscene levels because fundamentals are irrelevant and "don't fight the Fed" is the mot du jour. Indeed, so emboldened are they that more money have flowed into the market this year than in the past twenty combined, margin debt has been assumed at historical extremes and risky options strategies have been deployed to such unheard of excess that the stock market has almost become the derivative and not the other way around. This, coupled with the popularity of passive investing, has created a remarkably inefficient market, with valuations so stretched that they blow away previous bubbles. This cheap money has driven manias in other asset classes, crypto, bonds, SPACs, real estate. Since you mentioned real estate, I'll point out that house valuations going parabolic is not healthy--we've already seen how that tends to end once in the last fifteen years. You now have a lot of younger buyers starting families who have been borrowing themselves into insolvency between student debt and feeling pressured to buy houses as prices continue to sore. This will also be a drag on the real economy for years to come.

As for the pension crisis, I would absolutely agree that there is one, but it has been driven by the Fed making it all but impossible to earn a safe return on capital for over a decade now. There are other causes, under-funding, unrealistic return assumptions etc., but Fed policy has been a major driver. Pension funds, desperate for yield, have moved into riskier and riskier asset classes, hoping that diversification will save them if there's trouble. This too has contributed to the bubble mentality. Now, even with record valuations, pension funds can't meet their targets and some, like CALPERS, are starting to introduce leverage. Not a prudent strategy.

I believe your are correct in your assessment of a pending "great reset"; however, given that the problems I've been describing have been echoed in other developed economies across the world, some to an even greater degree than the U.S. (cough cough China), I think the risk is a strong dollar in the short to medium term. But I am not bullish on risk assets for the next decade and anyone buying at these nosebleed levels, whether stocks or real estate, are probably looking at negative expected returns, perhaps considerably negative.

 

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1 hour ago, Hoth said:

 

 Indeed, so emboldened are they that more money have flowed into the market this year than in the past twenty combined, margin debt has been assumed at historical extremes and risky options strategies have been deployed to such unheard of excess that the stock market has almost become the derivative and not the other way around.

 

I'm still learning and have only been following the economy seriously the past year, but margin debt seems like the biggie to me. However, unlike John Smith getting calls from Chase to make his credit card payment, it may benefit Bank A not to call Bank B to say "Where is my money?" because if it isn't there than Bank A is screwed and now Bank C, D, and E are calling up Bank A. Just pretend everyone has what they owe you and keep chugging along. I don't see where it ends.

Has anyone gone down the "Tether and Chinese real estate commercial paper" rabbit hole? That would be horrific.

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2 hours ago, PowderBeard said:

I'm still learning and have only been following the economy seriously the past year, but margin debt seems like the biggie to me. However, unlike John Smith getting calls from Chase to make his credit card payment, it may benefit Bank A not to call Bank B to say "Where is my money?" because if it isn't there than Bank A is screwed and now Bank C, D, and E are calling up Bank A. Just pretend everyone has what they owe you and keep chugging along. I don't see where it ends.

Has anyone gone down the "Tether and Chinese real estate commercial paper" rabbit hole? That would be horrific.

Yeah, the Tether CP reserves issues strikes me as pretty suspicious, but I generally avoid crypto, so perhaps others are more in the loop.

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Has anyone else seen the SpaceX's Train? I've seen it the past two nights in the SW sky when out for a run with the dog between 5:30-6:00pm. First night I couldn't believe it and thought I was seeing a UFO, went home and did some searching and this was it. Looks just like this (not my gif) and slowly rises from the horizon, it becomes less visible once it gets higher in the sky. 

 

SpaceX mass-produced communications satellites are too”terrible”? – yqqlm

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5 minutes ago, PowderBeard said:

Has anyone else seen the SpaceX's Train? I've seen it the past two nights in the SW sky when out for a run with the dog between 5:30-6:00pm. First night I couldn't believe it and thought I was seeing a UFO, went home and did some searching and this was it. Looks just like this (not my gif) and slowly rises from the horizon, it becomes less visible once it gets higher in the sky. 

 

SpaceX mass-produced communications satellites are too”terrible”? – yqqlm

Never seen it, but I hear it infuriates astronomers and ornithologists alike, the former because it introduces streaks in long exposure telescope observations, the latter because it disrupts bird migratory patterns (many species rely on stars for guidance).

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Just now, Hoth said:

Never seen it, but I hear it infuriates astronomers and ornithologists alike, the former because it introduces streaks in long exposure telescope observations, the latter because it disrupts bird migratory patterns (many species rely on stars for guidance).

WOW. I had read about astronomers being irritated about it but had no idea about the migratory patterns. Some of Musk's projects really are amazing but I always have the feeling he is a Bond villain come to life. The latest Bond movie definitely felt like it had some references in it to him. 

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4 minutes ago, PowderBeard said:

WOW. I had read about astronomers being irritated about it but had no idea about the migratory patterns. Some of Musk's projects really are amazing but I always have the feeling he is a Bond villain come to life. The latest Bond movie definitely felt like it had some references in it to him. 

Billionaires in space stations... what could go wrong?

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10 hours ago, PowderBeard said:

Has anyone else seen the SpaceX's Train? I've seen it the past two nights in the SW sky when out for a run with the dog between 5:30-6:00pm. First night I couldn't believe it and thought I was seeing a UFO, went home and did some searching and this was it. Looks just like this (not my gif) and slowly rises from the horizon, it becomes less visible once it gets higher in the sky. 

 

SpaceX mass-produced communications satellites are too”terrible”? – yqqlm

Saw it briefly this summer.  Freaked out 20 y o son out.  He thought it was a mussel attack or something.  
 

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