Are we headed for a world wide meltdown?

[Why_Yes_I_Do]

Fuck'n A, ya damned right it is. But that's just my personal opinion

Reality Bites: 94% of Americans Upset or Concerned with Joe Biden’s Record Inflation

This poll was brutal.
94% of Americans are upset or concerned with the Democrat Party’s record inflation.

And only 6% of Americans believe the current record inflation is Russia’s fault.

The Personal Consumption Expenditures price index increased by 6.6% for the year ended in March, the Commerce Department reported Friday. It was the highest rate since the period ended January 1982, outpacing the figure from February.



This is bad news for Democrats and Joe Biden who has no idea what he’s doing.

The NY Post reported:

Less than a third of Americans approve of President Biden’s handling of the economy — and an overwhelming majority admit they are “upset” or “concerned” by soaring inflation, according to the latest unflattering poll.

More than nine in 10 Americans (94%) say they are worried about spiking prices as inflation climbs to a 40-year high under the 46th president, according to the most recent ABC News/Washington Post poll conducted last week.

As a result, only a meager 28% “approve” of Biden’s job performance when it comes to the economy.

The biting results don’t bode well for Democrats heading into the midterm elections.

But you will need to hunker down, lock down and wear a paper mask, because the mid-terms are coming, the mid-terms are coming

[WTF]

Originally Posted by Why_Yes_I_Do

Fuck'n A, ya damned right it is. But that's just my personal opinion
But you will need to hunker down, lock down and wear a paper mask, because the mid-terms are coming, the mid-terms are coming

Nothing better than a Democrat in the White House and a GOP led House.

[WTF]

Originally Posted by CaptainMidnight

What if markets suddenly get a shot of excitement over an anticipated swift pivot from QT back to QE as well as a policy rate reversal, as in 2019?


.

Don't remind lustylad how important the Fed Chair is....he thinks all the credit and blame rests on the President

Powell should have told Trump to go fuck himself when he kept crying for more QE and lower rates....hell Trump wanted negative rates!

[Tiny]

Originally Posted by CaptainMidnight

Perhaps I failed to make my point in a sufficiently clear fashion, so I'll try to do so now.

First, consider this: If you can't maintain your cool during the occasional 20% (or more) selloff, perhaps investing just isn't for you. Charlie Munger famously said that if you wish to be a successful long-term investor, you have to steel yourself for the possibility that there's going to be a vicious bear market every now and then, and possibly featuring selloffs of 30% or even more.

My key point was that I like to always be realizing cash from my portfolios, especially when the markets are richly valued. In the case of many (non-dividend-paying) tech stocks, I trim about 5% a year over time from almost every position, in cases where I've realized significant gains. (I look at it as a de facto way of continually receiving dividend income).

This way, you have more chips to deploy after a bear market selloff offers you wonderful buying opportunities, as in 1974-1975, 1982-1983, 2002-2003, and 2009-2010. Be ready to jump in with both feet if a plunge of remotely similar magnitude occurs again. But don't think you can do well if you continually exit and reenter the market on a whim.

Have you ever seen Peter Lynch do that? Warren Buffett? (No, you have not!)

Although it looks like there are some rough seas ahead, there's no certainty a plunge remotely similar to those of the past will occur, although there are considerable risks.

For instance, there's a chance the Fed could panic and reverse course once again. (It's happened before!)

What if congressional leaders unhappy about a tanking S&P 500 haul the Fed chair in front of a committee and ask what the hell they're going to do about a 25% market plunge? What if markets suddenly get a shot of excitement over an anticipated swift pivot from QT back to QE as well as a policy rate reversal, as in 2019?

Markets can climb the proverbial "wall of worry" for a far longer period than some think. No one has any idea whether a bear market will begin soon, although on a sufficiently long timeline, you can expect that one will occur. Be ready.

In the meantime, a very important (but oft-forgotten) phrase should be kept in mind.

"I don't know!"

https://compoundadvisors.com/2022/i-dont-know

This is why in my view it's advisable to stay the course, but to be ready to seize attractive opportunities when they become available.

.

I suffered a 40% fall in the value of my positions around the fall of 2008. I wasn't as smart as Chung Tran, in that I didn't see the crash coming. Or as wise as you, following a disciplined approach as you do with tech stocks. But fortuitously I was sitting on a lot of cash, for me, and did very well over the next few years.

If you look at owning a stock as you would owning a part of a business, you view crashes as opportunities. Whatever you were buying just got cheaper. So you can buy more and pay less.

To put this into terms that we can all understand, say your ATF fell on hard times. She cuts her rate from $400 to $200. Are you going to bang her less because you think she's not as desirable a hooker, because now her services are cheap? Hell no, you bang her more! You can bang her twice as much for the same money! And that's the beauty of bear markets!

[Why_Yes_I_Do]

Originally Posted by Tiny

I suffered a 40% fall in the value of my positions around the fall of 2008. I wasn't as smart as Chung Tran, in that I didn't see the crash coming. Or as wise as you, following a disciplined approach as you do with tech stocks. ...

Nobody expected the Spanish Inquisition either.

[lustylad]

Debt Can Be a Killer

Elon Musk is leveraging his Twitter shares to buy even more shares.

By Andy Kessler
Updated May 1, 2022 5:12 pm ET


The arrest last week of the founder of the investment firm Archegos, charged with securities fraud, is a great reminder of hidden debt. In March 2021, Archegos was overleveraged, allegedly hiding its debt from Wall Street firms as it used funky “total-return swaps” to manipulate stock prices. The inevitable collapse destroyed $100 billion in stock value. (Archegos’s lawyers have denied the allegations.) Separately, supply-chain financier Greensill used what Fitch described as a “hidden debt loophole” and collapsed around the same time.

Are there more of these out there? I ask because we’re in the most dangerous part of the economic cycle. Interest rates are rising to combat inflation, and there could be all sorts of leverage we don’t know about. There always is. A slowdown (and especially a recession) would expose these hidden horrors. In 2018 this column argued that “in downturns, equity hurts but debt kills.” We’re about to find out if that’s still true.

More than $850 billion in credit-card debt and $800 billion in margin debt are high but off their peaks, and at least they are known amounts. It’s always hidden debt that comes back to bite when things fall apart. In June 1929, banks had $82 in deposits for each dollar in cash on hand. Bank runs followed. The 2008-09 financial crisis resulted from mispriced collateralized loans and weird derivatives on the balance sheets of Lehman Brothers, Bear Stearns and many others. Citibank used “structured investment vehicles” loaded with mortgages and who knows what else essentially to hide $100 billion in debt by keeping it off its balance sheet.

Now debt is fashionable again. Tesla’s last proxy statement shows Elon Musk owning 73 million options and 170 million shares, of which more than 88 million were “pledged as collateral to secure certain personal indebtedness.” Even assuming a 20% loan-to-value ratio, that’s a lot of personal indebtedness. In the pending Twitter deal, Morgan Stanley is providing a $12.5 billion margin loan against another 62 million of his Tesla shares.

Tesla sold around a million cars in 2021 and was worth $1 trillion last week at the time of the Twitter deal. Ford Motor Co. sold almost four million vehicles world-wide in 2021 and is currently worth just under $60 billion. I’d rather have Tesla’s business than Ford’s, but perhaps Tesla’s valuation is a tad fluffy. Netflix stock has fallen 72% in six months. Carvana is down 84% since August. Valuations are fleeting, and we aren’t even in a recession. Now may not be the time to borrow against Tesla shares.

There are reports that Mr. Musk may take out a loan against his current 9.2% stake in Twitter. Yes, borrowing against Twitter to buy more Twitter. Why does that sound familiar? Oh yes, MicroStrategy. Michael Saylor, a bitcoin evangelist and CEO of the Tysons, Va., software company, has the company buying gobs of the cryptocurrency. It recently took out a $205 million loan, backed by its bitcoin holdings, to buy even more bitcoin, for a current total of 128,687 worth $5 billion. In March Mr. Saylor tweeted, “Give me a lever long enough and #bitcoin on which to place it, and I shall move the world.” He doesn’t say in which direction. Note that MicroStrategy’s company value is worth less than its bitcoin.

The latest crypto craze is decentralized finance, the ability to do peer-to-peer transactions, bypassing centralized banks, Wall Street and governments. YouTube is filled with videos with titles like “Using the Power of DeFi to Leverage Any Asset.” There is even a lending-and-borrowing platform named DeFi Prime. Sounds safe, but so did buying Las Vegas condos with leverage in 2007.

One DeFi effort named Terra is amazingly offering 20% returns on deposits to fund a blockchain platform that uses an “algorithmic stablecoin” that maintains a $1 price. To do this, there is a fluctuating (but backed by nothing) cryptocurrency named Luna that is created or destroyed to buy or sell the TerraUSD stablecoin as needed to keep it stable. More than 20 years ago, Enron created and issued shares to cover losses in heavily indebted Special Purpose Vehicles until losses became so large that the scheme collapsed. Terra’s CEO, Do Kwon, told Bloomberg that high returns on deposits aren’t a problem; they are like high commercial banking rates in many Asian countries in the 1990s. Someone might remind him how that ended: with bad debt and giant currency crises in 1997 and 1998.

How much debt is in cryptoworld? No one really knows, but I wouldn’t want to be in its way if it begins to snowball during a downturn.

Even scarier is the $13.4 trillion of dollar debt owed by non-U.S. borrowers, according to the Bank for International Settlements. That’s doubled since 2010. Maybe that’s overstated because of hedging, but that’s a lot of dollar denominated debt outstanding. Each time the Federal Reserve raises interest rates to battle inflation, the dollar strengthens against other currencies, making dollar debt more expensive to service. Will this all blow up? I’ve seen it happen a few times. Each time, debt kills.

https://www.wsj.com/articles/debt-ca...es-11651420308

[lustylad]

Originally Posted by CaptainMidnight

In the meantime, a very important (but oft-forgotten) phrase should be kept in mind.

"I don't know!"

https://compoundadvisors.com/2022/i-dont-know

Have you checked in with our resident Know-It-All, the dissembling incoherent simple-minded simpleton WTF?

He's always wrong, but never in doubt!

[Texas Contrarian]

Originally Posted by Tiny

If you look at owning a stock as you would owning a part of a business, you view crashes as opportunities. Whatever you were buying just got cheaper. So you can buy more and pay less.

That's exactly how I look at it.

Imagine that you ran an almost unimaginably humongous private equity firm. (Fun thought, isn't it?) You see that the stock of a company with prospects you like is trading at $__ per share (fill in the blank appropriately). Would you buy the whole company at its current market cap? If not, you're speculating, not investing.

"I have simple tastes. I am easily satisfied with the best."

-- Stanley Marcus

"I am a simple man with simple ideas. I like assets, reasonable debt/equity ratios, strong, sustainable competitive positions within an industry, free cash flow, and dividends."

-- CaptainMidnight

To that end, among my favorites are the few dozen companies sometimes known as "dividend aristocrats" -- that is, companies with a long history of cranking out steadily increasing earnings and dividends.

Earlier I mentioned that I like to cash in 5% or so of my positions in rapidly appreciating growth stocks (mostly tech) when the market is richly valued.

Everyone wants to "buy low, sell high," needless to say. The problem is picking the entry and exit points. That's why some of the very most successful investors (Peter Lynch, Warren Buffett, etc.) very rarely sell and seek to own for the long term.

"The wise investor buys his stocks when fairly priced and holds for the long term, not concerning himself with worries over market cycles, wars, recessions, and short-term panics."

-- J. Paul Getty

I've always thought that successful long-term investing requires patience, self-discipline, and a certain amount of cold-bloodedness. Another aphorism Buffett sometimes tossed out is that the market is a mechanism for transferring wealth from the impatient to the patient.

.

[Chung Tran]

Originally Posted by Why_Yes_I_Do

Chungy got banned?!? He was actually making a positive contribution in this thread. I was going to complement him on that very thing.

Thanks WYID.. Not sure why I'm not banned. I was, until July 27. Same reason as my previous 5 bans. For hitting back at my 4 year Troll/Stalker, who ECCIE allows to lie, stalk, pester, troll, and make up gobs of bullshit and post it.

Waco knows the Stalker.. He has had scores of handles, the latest is AsianP. Before that it was Haejinkim, D1dragon, vadc, and many more.

Anyway, I have 25 points, and I just now found out I am not banned, after 11 days. Every God Damn point I have received the past few years, has been due to defending myself against the lying bullshit Stalker, that every Mod knows well. Why they nurture and coddle that multi-handled Troll is a mystery. Does not speak well for this Website.

Jay Powell is a continuous disaster as FED President. 6 months late raising interest rates, then rules out a 75 basis point hike. The Market is telling him the economy is tanking, but Powell is clueless.

[lustylad]

Originally Posted by Chung Tran

Jay Powell is a continuous disaster as FED President. 6 months late raising interest rates, then rules out a 75 basis point hike. The Market is telling him the economy is tanking, but Powell is clueless.

I agree with you, but his hands were tied for most of last year if he wanted to be reappointed to a new 4-year term. Biden didn't re-nominate him until last November. The crazy "progressives" like Liz Warren and Sheldon Whitehouse wanted a far-left dim-retard named Lael Brainard to be nominated instead. Thank God that didn't happen. While Powell is way behind the curve in slowing inflation, he is a lot freer now to slam on the monetary brakes than he was 6 months ago.

[The_Waco_Kid]

Originally Posted by Chung Tran

Thanks WYID.. Not sure why I'm not banned. I was, until July 27. Same reason as my previous 5 bans. For hitting back at my 4 year Troll/Stalker, who ECCIE allows to lie, stalk, pester, troll, and make up gobs of bullshit and post it.

Waco knows the Stalker.. He has had scores of handles, the latest is AsianP. Before that it was Haejinkim, D1dragon, vadc, and many more.

Anyway, I have 25 points, and I just now found out I am not banned, after 11 days. Every God Damn point I have received the past few years, has been due to defending myself against the lying bullshit Stalker, that every Mod knows well. Why they nurture and coddle that multi-handled Troll is a mystery. Does not speak well for this Website.

Jay Powell is a continuous disaster as FED President. 6 months late raising interest rates, then rules out a 75 basis point hike. The Market is telling him the economy is tanking, but Powell is clueless.

i noticed you made parole early. probably some old points expired? anyway the fugitive flamingo flies again! ah yes ... AsianP. i lurk in the Dallas Amp and Studio sections and occasionally throw shade at this fool. that whole "paid promoter" stuff is total nonsense. the Dallas AMP and Studio forums can match this forum for drama and bullshit any day. i get enough of that here which is why i rarely post in the Dallas AMP/Studio forums.



at any rate .. the fugitive flamingo is free again.







bahahahahhaaaaaaa

[Chung Tran]

Originally Posted by The_Waco_Kid

i noticed you made parole early. probably some old points expired? anyway the fugitive flamingo flies again! ah yes ... AsianP. i lurk in the Dallas Amp and Studio sections and occasionally throw shade at this fool. that whole "paid promoter" stuff is total nonsense. the Dallas AMP and Studio forums can match this forum for drama and bullshit any day. i get enough of that here which is why i rarely post in the Dallas AMP/Studio forums.



at any rate .. the fugitive flamingo is free again.







bahahahahhaaaaaaa

Free for now. But AsianP's MOD (yes, his personal MOD, good Buddy) got me banned 11 days ago. I imagine he will be seeking to exercise power, and point me out for insulting his Demon Buddy Stalker Friend. The Friend who ECCIE has nurtured and allowed to make up and post slanderous bullshit under many handles, for 4 years.

I will be banned again, by Noon today. Expect it. Admiral Giggles has it on his ''to do'' list.

Good points about Powell. But he was buying mortgage-backed securities until March, in the hottest fucking real estate Market Man has ever witnessed.. What was he thinking?

[Salty Again]

... Even-that I don't always agree with your posts, Mr. Chung
- I surely hope you don't get banned.

### Salty

[Chung Tran]

Originally Posted by Salty Again

... Even-that I don't always agree with your posts, Mr. Chung
- I surely hope you don't get banned.

### Salty

Thanks Salty. I hope I don't get banned again, but history is a Mother Fucker. I'm going to keep defending myself against the singular Troll's Bullshit, and his MOD Buddy will find the smallest excuse to point me for insulting his Friend. I have been banned more time than not, the past couple of years. Every point given was because I defended myself against the Stalker.

You and I agree about Powell, yes? He has been a failure as FED President. Give me a Paul Volker who will stomp on inflation, and scare it so bad it will hide for 40 years.

[The_Waco_Kid]

Originally Posted by Chung Tran

Free for now. But AsianP's MOD (yes, his personal MOD, good Buddy) got me banned 11 days ago. I imagine he will be seeking to exercise power, and point me out for insulting his Demon Buddy Stalker Friend. The Friend who ECCIE has nurtured and allowed to make up and post slanderous bullshit under many handles, for 4 years.

I will be banned again, by Noon today. Expect it. Admiral Giggles has it on his ''to do'' list.

Good points about Powell. But he was buying mortgage-backed securities until March, in the hottest fucking real estate Market Man has ever witnessed.. What was he thinking?

hotter than the runup to 2008? maybe. about the same. and the result will be the same when it drops like a rock.



the market is down at least 15 percent. thanks Brandon!!