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World Stock Markets Trading Discussion - Apathetic appraisal

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1 hour ago, DrStool said:

Well despite the fact that they sawed off the limb I was out on, somebody has to be the voice of reason.  Saw SPY calls as a hedge against something like this when it broke out above 2850. New benchmark to roll em up would be 2930. 

 

Decade long party keeps rolling despite what looks like a liquidity nightmare......more amazing each turn........market using the term very loosely sense is for a massive sell event.....

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Investors don't care that the US is headed for either authoritarian government, electoral chaos, or both.  

In any event, something frightening will happen politically before the elections.  

The Dow will probably rally 1000 points instantly.  

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Making America great again. Greater than ever. Asset inflation forever, or until nature says no.

China has built out great cities, thousands of square miles of factory space, road and railroads ($67bn invested in rail there the first 3 quarters this year) galore and on and on and on, and it has all been a monetary phenomena. So growth has slowed to 6.7%, boo hoo. Do you think they are going to let 300 million people slide back into extreme poverty  by allowing debt defaults?  I know this sounds crazy but balance sheets are a thing of the past or at best a polite fiction. Nobody ever has to default if they can borrow more, forever.

And we are going to allow deflation here?  No.

 

 

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13 minutes ago, Jorma said:

Making America great again. Greater than ever. Asset inflation forever, or until nature says no.

China has built out great cities, thousands of square miles of factory space, road and railroads ($67bn invested in rail there the first 3 quarters this year) galore and on and on and on, and it has all been a monetary phenomena. So growth has slowed to 6.7%, boo hoo. Do you think they are going to let 300 million people slide back into extreme poverty  by allowing debt defaults?  I know this sounds crazy but balance sheets are a thing of the past. Nobody ever has to default if they can borrow more, forever.

And we are going to allow deflation here?  No.

 

 

Money borrowing in the form of reserve is deflationary,......Rate of money borrowing escaping deflationary forces the current grand global experiment.....At the minimum criminal......

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1 hour ago, zero_value said:

Money borrowing in the form of reserve is deflationary,......Rate of money borrowing escaping deflationary forces the current grand global experiment.....At the minimum criminal......

Globally there are fewer people in extreme poverty now than for a very long time, when the total population  was a fraction of what it is now and certainly on a percentage basis less than ever. Now if one looks this up one can quibble on what defines extreme poverty but the basic point is sound. 

Actually fewer people are under the threat of extreme violence or virtual slavery than perhaps ever, as a percent of all people.

I am the furthest thing from a Pollyanna one can imagine but let's get a grip. I live in a place that to my eyes just came out of the recession that started in 1973.

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None of which is to say I will not continue to watch like a hawk for a market fall.

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We're in a mania. They are borrowing hand over fist to finance it.  It will end badly.

But I've gotten it wrong to this point. The game has changed. Monetary policy transmission was direct to the market when the Fed was pumping it up. Going in reverse, the Fed's attempt to deflate the market is indirect. They're doing something they've never done before. I made my best estimate of the timing of the effects. I was too early.  The transmission of negative policy effects is taking a lot longer than I thought it would.

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14 minutes ago, DrStool said:

We're in a mania. They are borrowing hand over fist to finance it.  It will end badly.

But I've gotten it wrong to this point. The game has changed. Monetary policy transmission was direct to the market when the Fed was pumping it up. Going in reverse, the Fed's attempt to deflate the market is indirect. They're doing something they've never done before. I made my best estimate of the timing of the effects. I was too early.  The transmission of negative policy effects is taking a lot longer than I thought it would.

These government polices are getting more creative when it comes to kicking the can down the road (deficit spending, tax cuts, and then tariffs to pay for the prior 2).  The borrowing and spending game keeps going as long as everyone interprets this debt bonanza as actual economic strength.

I agree, this creativity is really another way of trying to manage all this leverage.

 

Income statements dominate in a bull market, while balance sheets dominate in a bear market.

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I'm a supply/demand purist. Whatever the excuses is for this stock buying, being it earnings, taxes, deregulation, the fact is that there's less liquidity in the system now than a year ago and there will be even less a year from now. The persistent march higher of money rates in the Treasury market is a barometer of this. This will begin to affect stocks at some point. Timing is the issue as always. 

8o7zk

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