Global financial system implosion begins

[redsquirrel]

It’s a fifteen minute video. Can you summarise at least the main point it makes?

The Fed is BAAADD!

ETA: Also buy shares in our sponsor, they are definitely going to go big!

 

[gosub]

FED is the FED. Reactive so can only be late to any party and always scope for saying its pandering to either the rock or the hard place

meanwhile new loans falling at gradients not seen for long time (happening in EUrozone too btw)
Sponsered content is as sponsered content does. Historically its healthcare and staple foods to weather a recession....IT sector at same time as saying its about to pivot cos its getting bad. No thankyou. Odd thing though, sentiment in stocks lags even further than FED. Will be all milk and honey til the FED correcting their correction tells em jungle is massive

 

[teuchter]

It's the gosub word-soup thread.

 

[bcuster]

The Dow has been this unstoppable only 5 times since 1897

The Dow Jones Industrial Average gained for a 12th straight day on Tuesday. Only five times since 1897 has the index enjoyed winning streaks that long, according to strategist Charlie Bilello.

markets.businessinsider.com

 

[gosub]

The Dow has been this unstoppable only 5 times since 1897

The Dow Jones Industrial Average gained for a 12th straight day on Tuesday. Only five times since 1897 has the index enjoyed winning streaks that long, according to strategist Charlie Bilello.

markets.businessinsider.com

Agree with Rosenburg.


You look at all the past crashes...won't come whilst they are raising rates... and US rates now highest for 22 years. And thats one hell of an inverted yield curve

US - Federal Funds Rate vs. S&P 500 | US Market | Collection | MacroMicro

The chart shows that when the Fed enters a rate-rising cycle, the economy grows faster and the stock market can yield higher returns than the bond market.

en.macromicro.me

 

[CH1]

Agree with Rosenburg.


You look at all the past crashes...won't come whilst they are raising rates... and US rates now highest for 22 years. And thats one hell of an inverted yield curve

US - Federal Funds Rate vs. S&P 500 | US Market | Collection | MacroMicro

The chart shows that when the Fed enters a rate-rising cycle, the economy grows faster and the stock market can yield higher returns than the bond market.

en.macromicro.me

So what then? Is it that Fed Funds rate 5.5% today vs 1.75% a year ago means that equity prices and yields are unaffected?
Or are they suggesting that a market boom causing the need to Fed Funds to more than treble is what is causing the equity boom too?
Replies on a postcard please.

 

[gosub]

Stock market is detached. And shouldn't be seen as an indicator of sunny uplands ahead. If anything sentiment is :things can't be that bad or they wouldn't still be raising rates.

Stock market is only a small part of financial services other indicators pointing to an oncoming train.

 

[CH1]

These people are the reincarnated spirit of Bob Beckman The extreme bubble in stocks 'will end in tears' with the S&P 500 plunging 64%, a long-time bear who called the 2000, 2008 crashes has warned. Here are his 6 best quotes.

 

[yield]

How bonds ate the entire financial system
A very short, very wild history of the market that will shape the next financial crisis
FT. August 3 2023 https://archive.li/RKBOd

It is hard to overstate the importance of US government debt, or Treasury bonds. Besides its size — at $25tn, this is by far the biggest bond market in the world — the Treasuries market is essential to the functioning of the international financial system. Because of the US dollar’s status as the world’s dominant currency, Treasury yields are what almost everything else is priced off, and they act as collateral for all sorts of other transactions. They are also the bomb shelter of capital markets, the place investors flee to when financial WMDs begin falling. At the peak of the March 2020 market mayhem, the shelter itself seemed about to crumble.

Amid the turmoil, some trading screens with Treasury prices were occasionally going blank — the high-tech equivalent of your stockbroker not picking up their phone during a sell-off. Rumours of cascading hedge-fund collapses ricocheted through finance industry WhatsApp groups. Mark Cabana, an analyst at Bank of America, warned that “large-scale illiquidity” was becoming a “national security issue”, with the US government facing the possibility that it might be unable to finance itself.

Then the Federal Reserve made an extraordinary intervention, promising to buy an unlimited amount of Treasuries. The downward spiral was halted. But the episode showed how the risks of modern finance have quietly but radically evolved. “Yes we bailed out the banks [after the 2008 financial crisis]. But risk has now been transferred to the non-banks in the bond market,” says Gross.

Long but worth reading to the end.

 

[gosub]

 

[pesh]

He looks like a bit of a cunt

 

[Artaxerxes]

He looks like a bit of a cunt

Johnny Bravo style without being cool like Johnny Bravo

 

[teqniq]

Not even considering watching that without some kind of explanation, no matter how brief.

 

[CH1]

It's self contradictory - starts off saying long term interest rates are through the roof (good for savers) then ends up saying there will be a credit crash and everyone's savings will disappear.
I liked his graphical comparison of the current situation with 1970-1976 - which might be logical (not that he gave any reasons himself). The oil price shock of 1973 combined with domestic inflation and labour strikes lasting into the late 1970s could be an analogue of the covid shock coupled with the unwinding 13 years of pay restraint. But he didn't dwell on that.
I agree his style is very off-putting. If he wasn't vacuous enough already this punk-economics with big hair is not economics nor is it entertainment - unless the main event of your week is an hour long sermon on dispensationalism and "the rapture".

 

[gosub]

It's self contradictory - starts off saying long term interest rates are through the roof (good for savers) then ends up saying there will be a credit crash and everyone's savings will disappear.
I liked his graphical comparison of the current situation with 1970-1976 - which might be logical (not that he gave any reasons himself). The oil price shock of 1973 combined with domestic inflation and labour strikes lasting into the late 1970s could be an analogue of the covid shock coupled with the unwinding 13 years of pay restraint. But he didn't dwell on that.
I agree his style is very off-putting. If he wasn't vacuous enough already this punk-economics with big hair is not economics nor is it entertainment - unless the main event of your week is an hour long sermon on dispensationalism and "the rapture".

That's not contradictory, under fractional reserve banking (though under covid US fraction was 0%). US banking should see savings upto 250k underwritten but they have lent out 20times what the savers have put in. (same old same old)
They are going to be more bank runs coming up ...mid size banks. ironically being forced at adopt Basel same as the big boys, whom will eat them for cents on the dollar.

He is right ...it isn't going to be a soft landing...though Fed might get a couple more 0.125 in before the politics kicks in....though it's the actual pivot that fucks things.


It also isn't punk economics. It isn't economics at all. - he's one of those johnies that look for patterns in graphs ...so he's psychology of sentiment type

 

[gosub]

He also isn't saying people are sticking their money into banks for that intrest rate...its treasury bonds....and thats investors. He's not an investor he's trader

 

[Artaxerxes]

Not even considering watching that without some kind of explanation, no matter how brief.

Absolutely but people keep on posting this shit without even an attempt to say what it’s about let alone giving a summary of why it’s important

 

[gosub]

Looks like Burry's latest short bet is in....he's been saying S&P500 is a pinch point (for a while) gone large (10* anything he's done in a while) against SPY & QQQ.


One thing I did read in the end credits of Big Short was that he now concentrates his investment round water...yet he went long on China during last years drought (floods are probably an even bigger bitch) so that might not be strictly true these days

 

[kabbes]

I’d take it with at least a pinch of salt

“Since the filings disclose only long positions it was also not clear whether the puts were held outright or as part of a larger trade involving other contracts that might have been sold short.”

 

[pbsmooth]

Reading up on him, the management of his portfolio seems quite erratic nowadays to put it mildly.

 

[gosub]

Dancing with a consciousness of the monkey on his back IMO. https://www.google.com/url?sa=t&sou...Qjjh6BAgTEAE&usg=AOvVaw1vLrl80zLfB665_uoacUg5

That said definitely not a good time to be holding alibaba. globally cardboard box sales are down, that flooding is a dozy and the rot from Evergrande has gone Countrywide defo right not holding that..
And those banks..hmm skirting credit downgrades

Hedges towards the positive with his other much smaller positions mining energy ents even. Far more constructive than the ones he placed when he was building his case...prison shares...
(Different days )

 

[CH1]

This is a guy with a son with Aspergers, who believes he himself has Asperger's, and gave up a medical research career to do trading??
One thing for sure - he's not going to be Bertrand Russell Chair of Moral Philosophy!

Michael Burry - Wikipedia

en.wikipedia.org

 

[gosub]

US consumer debt (with charts)

In other news US commercial floor space billion square ft apparently oh and China which is a whole other exponential

 

[teuchter]

US consumer debt (with charts)

In other news US commercial floor space billion square ft apparently oh and China which is a whole other exponential

Is it that you are simply too busy with other incredibly important things, to make just a little more effort to type things on this thread in such a way that they are intelligible? I don't just mean the use of technical terms and acronyms, I mean stuff like sentences that are actually parsable.

 

[kabbes]

Is a billion square feet a lot? It’s only three square feet per person in the US. Or, if 10-15% of the population are employed, it’s a little patch of space that is five foot by five foot per employee, Doesn’t sound like much to me.

You have spent the last fifteen years posting breathless articles of the sky falling in, gosub. Have you really spent those fifteen years constantly thinking that the US economy is on the brink of collapse? It’s worth spending some time noting the evidence the other way too. Employment remains very low, corporate earnings consistently beat expectations, inflation is pretty much back on target. I’m not offering these as “good” things, merely macro evidence that their system seems to still be very robust. Even after massive shocks, it has returned to strength within a few years. You can’t just focus all the time on YouTube shouty men and chartist OpEd writers

 

[gosub]

Is a billion square feet a lot? It’s only three square feet per person in the US. Or, if 10-15% of the population are employed, it’s a little patch of space that is five foot by five foot per employee, Doesn’t sound like much to me.

You have spent the last fifteen years posting breathless articles of the sky falling in, gosub. Have you really spent those fifteen years constantly thinking that the US economy is on the brink of collapse? It’s worth spending some time noting the evidence the other way too. Employment remains very low, corporate earnings consistently beat expectations, inflation is pretty much back on target. I’m not offering these as “good” things, merely macro evidence that their system seems to still be very robust. Even after massive shocks, it has returned to strength within a few years. You can’t just focus all the time on YouTube shouty men and chartist OpEd writers

Actually haven't.

Have made a claim for this 3rd quarter.. One you clearly disagree with. Time will tell

 

[gosub]

Also As a model . Flattening out economic cycles by inflating your way out of it...(which is what's been going on over those 15 years). Is inflationary , has kicked bottom rung out of the housing market (that's where trickle down ends up in house prices). It also depends on bonds market playing ball and why would you hold the lower yield t bonds whose value is being inflated away?....Also adds to the pressure for a different underpinnings....UAE -India just did a ruppee oil deal

 

[gosub]

Build back better they said...only the banks got cold feet due to their exposure to commercial property. So it was everyone back to the office.....and along came AI

 

[kabbes]

So what if there is a billion square feet? So what if that‘s 48,000 vacant floors? Is that actually a big number? I don’t think so. Not when it only amounts to three square feet per American. All your graphic demonstrates is that when you have a lot of people, anything that those people do adds up to a big amount.

 

[teuchter]

A more useful graphic

U.S. office vacancy rates by quarter 2017-2023 | Statista

Vacancy rates across the office real estate sector in the U.S.

www.statista.com