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Markets still falling like whoa

Llano Estacado

By Llano Estacado
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bernorange

bernorange 8362

Posted
Posted

So a while back I posted a link to Ray Dalio's linkedin where he published a warning about the violence inherent in the system.  He's not letting up.  Latest screed:

Quote

The World Has Gone Mad and the System Is Broken

I say these things because:

  • Money is free for those who are creditworthy because the investors who are giving it to them are willing to get back less than they give. More specifically investors lending to those who are creditworthy will accept very low or negative interest rates and won’t require having their principal paid back for the foreseeable future. They are doing this because they have an enormous amount of money to invest that has been, and continues to be, pushed on them by central banks that are buying financial assets in their futile attempts to push economic activity and inflation up. The reason that this money that is being pushed on investors isn’t pushing growth and inflation much higher is that the investors who are getting it want to invest it rather than spend it. This dynamic is creating a “pushing on a string” dynamic that has happened many times before in history (though not in our lifetimes) ...
  • At the same time, large government deficits exist and will almost certainly increase substantially, which will require huge amounts of more debt to be sold by governments—amounts that cannot naturally be absorbed without driving up interest rates at a time when an interest rate rise would be devastating for markets and economies because the world is so leveraged long. Where will the money come from to buy these bonds and fund these deficits? It will almost certainly come from central banks, which will buy the debt that is produced with freshly printed money. This whole dynamic in which sound finance is being thrown out the window will continue and probably accelerate, especially in the reserve currency countries and their currencies—i.e., in the US, Europe, and Japan, and in the dollar, euro, and yen.
  • At the same time, pension and healthcare liability payments will increasingly be coming due while many of those who are obligated to pay them don’t have enough money to meet their obligations. ...
  • At the same time as money is essentially free for those who have money and creditworthiness, it is essentially unavailable to those who don’t have money and creditworthiness, which contributes to the rising wealth, opportunity, and political gaps. ...

This set of circumstances is unsustainable and certainly can no longer be pushed as it has been pushed since 2008. That is why I believe that the world is approaching a big paradigm shift.

https://www.linkedin.com/pulse/world-has-gone-mad-system-broken-ray-dalio?articleId=6597520880811724801#comments-6597520880811724801&trk=public_profile_article_view

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Eastwood
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That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if o

Rusty Shackelford
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Eastwood
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I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the l

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Rusty Shackelford

Rusty Shackelford 414

Posted
Posted
3 hours ago, bernorange said:

So a while back I posted a link to Ray Dalio's linkedin where he published a warning about the violence inherent in the system.  He's not letting up.  Latest screed:

https://www.linkedin.com/pulse/world-has-gone-mad-system-broken-ray-dalio?articleId=6597520880811724801#comments-6597520880811724801&trk=public_profile_article_view

I think he will be proven correct, but for now the Fed and other central banks will continue pumping out that QE because the market didn't approve of the little QT experiment.  Hey look a new ATH on the S&P today!

 

Central banks will not change what they are doing unless there is a radical change in world order.  

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Trey3216

Trey3216 15350

Posted
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3 hours ago, Rusty Shackelford said:

I think he will be proven correct, but for now the Fed and other central banks will continue pumping out that QE because the market didn't approve of the little QT experiment.  Hey look a new ATH on the S&P today!

 

Central banks will not change what they are doing unless there is a radical change in world order.  

So, a New World Order???

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Wally Fairway

Wally Fairway 5571

Posted
Posted (edited)

WSJ article on wall street banks contributing to run up in WeWork

https://www.wsj.com/articles/as-wework-grew-wall-street-lent-it-money-and-credibility-11573209003?mod=hp_lead_pos1

Quote

Banks jockeying for a role in WeWork’s public debut wooed founder Adam Neumann with sky-high valuations that would make him a billionaire many times over. Their loans to the company told a different story.

...

The bank pushed other lenders to commit at least $750 million apiece toward the $6 billion total, dangling a role in the IPO, according to people familiar with the negotiations. Some bankers worried JPMorgan’s initial terms were too lenient and demanded WeWork set aside more cash to back the loan, the people said.

Eventually, the $2 billion line was 100% collateralized, meaning WeWork would have to pledge a dollar of cash for each dollar it borrowed, the people said. Goldman, Wells Fargo and six other big banks agreed to participate.

The lenders would split about $250 million in fees upfront, according to people familiar with the deal, a high sum for a low-risk arrangement. A day after it was finalized, WeWork said it had chosen JPMorgan and Goldman to lead its IPO. The other banks got junior roles.

 

Edited by Wally Fairway
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Rusty Shackelford

Rusty Shackelford 414

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On 11/7/2019 at 2:18 PM, Trey3216 said:

So, a New World Order???

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Sounds crazy, right?  I mean what kind of tinfoiler would say something like this?

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We experience this world all together and you know that better than I, but the international order is being disrupted in an unprecedented way, with massive upheaval, probably for the first time in our history, in almost all areas and on a historic scale. Above all, a transformation, a geopolitical and strategic reconfiguration. We are probably in the process of experiencing the end of Western hegemony over the world. We were used to an international order that had been based on Western hegemony since the 18th century – probably French hegemony in the 18th century, inspired by the Enlightenment; probably British hegemony in the 19th century thanks to the Industrial Revolution, and American hegemony in the 20th century thanks to two major conflicts and the economic and political domination of that power. Things change. And they have been deeply affected by the mistakes made by Westerners in certain crises, by American decisions over the last several years which did not start with this administration, but have led us to re-examine certain involvements in conflicts in the Middle East and elsewhere, and to rethink fundamental diplomatic and military strategy and on occasion elements of solidarity which we thought were forever inalienable even though we had developed them together during periods of geopolitical significance, which have however now changed. And it is also the emergence of new powers whose impact we have probably underestimated for far too long.

China first and foremost as well as Russia’s strategy that has, let’s face it, been pursued with greater success over the last few years. I will come back to that. The India that is emerging, these new economies that are also becoming not just economic but political powers and which consider themselves, as some have noted, genuine civilization states and which have not just disrupted our international order, assumed a key role in the economic order, but have also very forcefully reshaped the political order and the political thinking that goes with it, with a great deal more inspiration than we have. Take India, Russia and China for example. They have a lot more political inspiration than Europeans today. They take a logical approach to the world, they have a genuine philosophy, a resourcefulness that we have to a certain extent lost. And so all of that has a major impact on us and reshuffles the cards. I am obviously not talking about Africa’s emergence, which is being confirmed every day and is also resulting in far-reaching changes; I will also come back to that. The risk involved in this major upheaval is increased twofold thanks to geopolitical and military turmoil, and we are in a world in which the number of conflicts is increasing and in which I see two main risks.

Sorry for the thread derail, but I will award 1 "thanks" trophy to anyone who can tell me who said this and when.

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SwanderedTalent

SwanderedTalent 5761

Posted
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4 hours ago, Rusty Shackelford said:

Take India, Russia and China for example. They have a lot more political inspiration than Europeans today. They take a logical approach to the world, they have a genuine philosophy, a resourcefulness that we have to a certain extent lost.

yes, but they probably still use gendered pronouns

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Rusty Shackelford

Rusty Shackelford 414

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Posted

Ok here's another part of his speech. 

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We are about to indisputably become the leading European army thanks to investments that we have made, the military estimates act, the calibre of our troops, and the appeal of our army. In today’s Europe, nobody else has this vitality and nobody else has decided to make this strategic and human investment.

I'll go ahead and spoiler the answer.

Spoiler

Ambassadors’ conference – Speech by M. Emmanuel Macron, President of the Republic

 

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TwiceHorn

TwiceHorn 31512

Posted
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On 11/8/2019 at 5:26 AM, Wally Fairway said:

WSJ article on wall street banks contributing to run up in WeWork

https://www.wsj.com/articles/as-wework-grew-wall-street-lent-it-money-and-credibility-11573209003?mod=hp_lead_pos1

 

But I was told it wasn't Wall Street.  Fuckers makin fees.  Doin nothin and makin fees.

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Trey3216

Trey3216 15350

Posted
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1 hour ago, Rusty Shackelford said:

Ok here's another part of his speech. 

I'll go ahead and spoiler the answer.

  Hide contents

Ambassadors’ conference – Speech by M. Emmanuel Macron, President of the Republic

 

Sounds like something his bitch ass would say.   No CR 

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bernorange

bernorange 8362

Posted
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I've been very sedate in sounding the warning bell on this forum.  I've posted a few warnings from non-bear sources here and there.  The 1% appear to be expecting a market correction:

Quote

Wealthy people around the globe are hunkering down for a potentially turbulent 2020, according to UBS Global Wealth Management.

A majority of rich investors expect a significant drop in markets before the end of next year, and 25% of their average assets are currently in cash, according to a survey of more than 3,400 global respondents. ...

Nearly four-fifths of respondents say volatility is likely to increase, and 55% think there will be a significant market sell-off before the end of 2020, according to the report which was conducted between August and October and polled those with at least $1 million in investable assets. Sixty percent are considering increasing their cash levels further, ...

https://www.bloomberg.com/news/articles/2019-11-12/world-s-rich-readying-for-major-stock-sell-off-ubs-wealth-says

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bernorange

bernorange 8362

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20 hours ago, Rusty Shackelford said:

Sounds crazy, right?  I mean what kind of tinfoiler would say something like this?

...

Macron's speech was OK, but do you remember who said these things?

Quote

... and people talked then in 1990 of the new world order. What they meant then was a new political order. And what was not foreseen then but is obvious now, from everything that we see and do, what we experience every day of our life is the sheer scale and speed and scope of globalization. And it’s only now that we can begin to understand that the world order that globalization brings and what it’s going to look like. It’s driven forward now not just by the balance of military strengths, the cold war times or ordinary political power. It’s being driven forward by a seismic shift in economic power that we see around us.
...
So, in conclusion, ladies and gentlemen, a new world is emerging. It is a new world order with significantly different and radically new challenges for the future.

 

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Sometimes it does take a crisis for people to agree that what is obvious and should have been done years ago can no longer be postponed. But we must now create the right new financial architecture for the global age

 

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Tailgate

Tailgate 3022

Posted
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Just capture the S&P and go long. And don’t succumb to emotions. Just missing the last six months would have driven me nuts.

Sure, it will go down at some point....but what day, what time? And what day and time does it come back?

Zoom out and look at the all-time chart.

Only goes up. Don’t try and guess. 

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Incredulity

Incredulity 11680

Posted
Posted
1 hour ago, Tailgate said:

Just capture the S&P and go long. And don’t succumb to emotions. Just missing the last six months would have driven me nuts.

Sure, it will go down at some point....but what day, what time? And what day and time does it come back?

Zoom out and look at the all-time chart.

Only goes up. Don’t try and guess. 

Fuck that.

Short winter wheat. Go long on Frozen Concentrated Orange Juice. 

Then sell leveraged options.

What could go wrong.

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Texas Jeff

Texas Jeff 1945

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Does anyone else follow the Buffett Indicator?  It is a measure of the ratio of the total price of the stock market relative to the US gross national product.  In theory, the higher the ratio the more overbought the market is, and the lower the ratio the more oversold it is.

Right now this measure is around 146, and historically it's been tough for this measure to exceed the 146-148 range.  If you follow that indicator, we would seem to be at a market peak.  To lower the ratio the total stock market price needs to drop, or GDP needs to increase.  I've been looking at this for about two years and expecting a market pullback that has not yet happened.

Getting this number back to 100 would put the DJIA down around 19,000, if dow stocks sank along with the larger market.  There is nothing magical about 100, but there have been times when this number was above 100 and under 100, so it's possible.  After the dot-com recession, this metric bottomed out in the low 70's, and during the Great Recession the number fell as low as 57.

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Wally Fairway

Wally Fairway 5571

Posted
Posted
47 minutes ago, hornhorn said:

Someone bought 4000 contracts of TDAmeritrade call options in October at $0.25/contract. So....their $100,000 is worth $3,200,000 today. 

Someone is getting a visit from the SEC enforcement division.

CSB - I worked for a joint venture, and one of the parent companies was acquired by a Japanese company. 4 senior executives bought stock less than a month before the announcement, and they told a couple of friends; all were charged with securities fraud. And the best part is that 2 of the executives were brothers, and a 3rd brother was the CEO (who was not charged)...I'm sure that made for some lively Thanksgiving dinner conversations.

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Trey3216

Trey3216 15350

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58 minutes ago, Wally Fairway said:

Someone is getting a visit from the SEC enforcement division.

CSB - I worked for a joint venture, and one of the parent companies was acquired by a Japanese company. 4 senior executives bought stock less than a month before the announcement, and they told a couple of friends; all were charged with securities fraud. And the best part is that 2 of the executives were brothers, and a 3rd brother was the CEO (who was not charged)...I'm sure that made for some lively Thanksgiving dinner conversations.

I wouldn't doubt if that was the day Schwab announced they were getting rid of all single trade commissions on their site.   Someone made a big, smart bet on one of the other major independents getting taken out, and they bet correctly.  

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hornhorn

hornhorn 100

Posted
Posted
Just now, UT_OB1 said:

This math is making my head hurt. 

I'll simplify it for you:

A typical derivative contract is composed of 100 shares so 4000 contracts X 100 shares = 400,000 share equivalent. 

The party bought 400,000 share call option for a specific strike price and strike date at 25 cents/share = $100,000. 

At one point today that same contract was worth $8 due to the price spike due to the news of TDA acquisition so: 400,000 shares X $8 = $3,200,000. 

I did leave out some information in my post earlier so if you aren't familiar with derivatives and how they work it could be confusing and cause a headache. Hopefully this helps. 

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Wally Fairway

Wally Fairway 5571

Posted
Posted
On 11/21/2019 at 10:42 PM, Anastasis said:

Options are for witches. 

I might be a witch; I do weigh more than a duck.....

On 8/26/2019 at 8:30 AM, hornbri said:

See trump says “we are getting back to table with China” and now futures are pointed up. 

Someone could be making a ton of money just knowing what he is going to tweet. 

And we are back to the market reacting to twitter....hang on to your butts!

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