Black Monday

[Daytr]

I largely agree with what you're saying, but I still have questions (that can't really be answered unfortunately)

for instance


I am / have been on the board of some charitable trusts and we find that there is both genuine need and poor spending decisions. so the question is, how do we judge which is which when at an economy level they look they same?



I agree, the 'trickle down' did not work well for many and necessary infrastructure was not built. However, I was fortunate to be working for companies that did reward their staff, this made that period a very good time for the people I worked with.
it also partially comes down to my earlier point, what are people doing with their money? and again there will be genuine need, and others who spend poorly and then look for government help.
I spent that period (and earlier) saving as much as I could and so managed to ride the share market boom that ran from the early 2000's for ages with only a few interruptions.
Again how do we make policy when they look the same at an economy level?



True, but I also know of two immigrant doctors working in construction because they can't get registered here.
I don't know the detail of why, and that is going to be important, but they were still doctors. No question, just a comment that not all immigrants are of lesser talent

I think you can measure the inequality and how people are worse off now largely due to cost of housing vs wages. The multiples of the average wage vs average house price has soared and rents with it. So unless you own a home you are much worse off as a much larger percentage of your wage goes on housing.

Re the immigrants I didn't mean to refer to them as less talented, quite often the opposite is true. They are on average though cheaper, which was the point I was trying to make

[mondograss]

Inflation always reduces debt in the long term. I read somewhere maybe a decade ago tgat the US never repaid its ww2 debts. They just faded into insignificance. Like a 500k loan in 2003. Now its barely a first home loan.
I found it interesting watching the first leaders debate with a Chinese person. Never voted in nz. Comment was Chris has no thought or plan for the future. Thats nz. Adrift in a sea of apathy until its 2 minutes from midnight. Labour offers a new hospital in napier as an election bribe yet never bothered to train more hospital staff over 6 years.

You might find this interesting:
https://www.mcnz.org.nz/assets/Publications/Workforce-Survey/d9d2757aad/Workforce-Survey-Report-2021.pdf

Amongst other things, pg16 shows the increase in the doctors workforce every 3 years from 2000 to 2021
2015 was the lowest increase only 5.7%
2021 was the highest increase 12.4%

Also shows a steep decline in GP's from about 2000 onwards (pg18).

Anyway, there's various interesting stats in there.

[Relaxed]

I think you can measure the inequality and how people are worse off now largely due to cost of housing vs wages. The multiples of the average wage vs average house price has soared and rents with it. So unless you own a home you are much worse off as a much larger percentage of your wage goes on housing.

Re the immigrants I didn't mean to refer to them as less talented, quite often the opposite is true. They are on average though cheaper, which was the point I was trying to make

Fair enough, especially re the immigrants.
I agree.

The house price multiple is interesting. when I bought my house, I was talking to my neighbour who has lived in the house (that they had built) for 500 years (or there abouts :) ) and he and I were discussing wages to the cost of our houses. I spent 28 times more than he did but it was a smaller multiple of my salary.
I think there have always been cycles and theoretically it should come back to something more affordable.
What seems to mess that up are a number of conflicting drivers. including immigration , as you noted, but also subsidies, people's expectations of what is 'average', land availability, house building capacity, building and resource regulations etc etc.

when I was growing up, and when I started working, it never occurred to me, or those I was learning from, that the average wage earner could buy the average house.
the average wage earner bought the cheapest entry level house they could find and then worked hard to pay off some, get a pay rise etc and ultimately buy a better house.

[winner69]

No better leading indicator of NZ CPI than price of diesel - our country runs on it. Petrol and diesel prices are spiking again as the Saudis and Russia reduce supply

[JBmurc]

No better leading indicator of NZ CPI than price of diesel - our country runs on it. Petrol and diesel prices are spiking again as the Saudis and Russia reduce supply

And I see JP Morgan see $120bbl next year as not being expensive.. so just think another 20-30% rise in NZ fuel price .. diesel $3+

We can’t just blame the Russian / Saudis western nation have been running an anti Fossil fuel campaign for many years and if you don’t invest in more exploration/development then how do expect 100mill+ bbls per day of production to be maintained and increased as we are actually seeing more Oil demand per day now than pre COVID .. the major producers are sick of being the whipping boys of the western nations ..

Here in NZ we had GOVT happy to see Our modern oil refinery closed .. O&G NZ big no no … we can rely on overseas companies!! We are all going have EVs one day ………. Who cares about the next 20-40yrs of ever increasing NZ fuel demands …

[Panda-NZ-]

the major producers are sick of being the whipping boys of the western nations ..

I'm sure they can look to their lambourghinis and "made in russia" sh*t-tier tanks to remind them of what they get out of it.


Here in NZ we had GOVT happy to see Our modern oil refinery closed .. O&G NZ big no no … we can rely on overseas companies!! We are all going have EVs one day ………. Who cares about the next 20-40yrs of ever increasing NZ fuel demands …

Since we have a free market it would likely be exported and make zero difference to the petrol price in NZ.

[Valuegrowth]

Oil dropped below zero in 2020.

https://www.imperial.ac.uk/news/197034/why-prices-fall-below-zero-analysis/

[JBmurc]

I'm sure they can look to their lambourghinis and "made in russia" sh*t-tier tanks to remind them of what they get out of it.



Since we have a free market it would likely be exported and make zero difference to the petrol price in NZ.

Yes O&G was a major earner for the country most of local oil selling for premium price over Brent as light sweet high api crude

..we had great refinery that could turn heavy sour crude worth much less than WTi-Brent .. allow our nation to have a great downstream business that would supply high Quality bitumen to diesel- petrol ..

Now we wait in-line like many nations taking what we can get our hands on .. crap bitumen seeing are roads deteriorating very quick after being laid .. high levels of toxics in the fuels coming from less quality run refineries..

I see even our AA has stated closing our refinery has impacted costs of fuels .. in recent article talking of $3.50 petrol early in the new year ..

[mike2020]

I read they didn't just mothball it they really took to it to make it hugely expensive to restart it if needed. Insanity.

[moka]

True, but I also know of two immigrant doctors working in construction because they can't get registered here.
I don't know the detail of why, and that is going to be important, but they were still doctors. No question, just a comment that not all immigrants are of lesser talentCurrent comparable health systems.

https://www.mcnz.org.nz/registration/getting-registered/registration-policy/comparable-health-system-criteria/
(https://www.mcnz.org.nz/registration/getting-registered/registration-policy/comparable-health-system-criteria/)
For an overseas trained doctor to register in NZ they must have trained in a country considered to have a health environment comparable to New Zealand: i.e.

Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Israel, Italy, Norway, Portugal, Republic of Ireland, Singapore, Spain, Sweden, Switzerland, The Netherlands, United Kingdom, United States of America.

[percy]

Wife's heart surgeon.
DR ANIKET PURI
Aniket Puri is a Consultant General and Interventional Cardiologist at Christchurch Hospital. He has been in this role since 2012.

Aniket has been in Cardiology teaching and practice since 2003. He was an Associate Professor of Cardiology at King George’s Medical University, India before relocating to New Zealand. He trained in India in a high volume and highly competitive academic environment. He did Advance Coronary Intervention fellowships in at Asan Medical Centre, Korea and Waikato Hospital, New Zealand. He was awarded the Australia New Zealand Endovascular Therapies (ANZET) Best Fellow Prize in 2008. He continues to be involved with Research, Publications and Presentations with his main area of interest being Coronary Imaging and Physiology. Most recently he was awarded at Kobe, Japan in 2017, for his work on Spontaneous Coronary Artery Dissections. He also holds Fellowships of American College of Cardiology (FACC) and Society of Cardiovascular Angiography and Interventions (FSCAI).

[Getty]

Current comparable health systems.

https://www.mcnz.org.nz/registration/getting-registered/registration-policy/comparable-health-system-criteria/
(https://www.mcnz.org.nz/registration/getting-registered/registration-policy/comparable-health-system-criteria/)
For an overseas trained doctor to register in NZ they must have trained in a country considered to have a health environment comparable to New Zealand: i.e.

Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Israel, Italy, Norway, Portugal, Republic of Ireland, Singapore, Spain, Sweden, Switzerland, The Netherlands, United Kingdom, United States of America.

No mention of India.

Too many cowboys?

[JBmurc]

I read they didn't just mothball it they really took to it to make it hugely expensive to restart it if needed. Insanity.

Yes basically spent 220mill on decom the key energy asset to all NZDers that paid for it ...

Reform and privatization
Following the election of the reformist Fourth Labour Government in 1984, the Petroleum Sector Reform Act was introduced. This Act deregulated the petroleum industry, with 1,500 workers expected to lose their jobs.[2] The Refinery assets were transferred by the Government to the New Zealand Refining Company Limited, a consortium of the five major petrol retailers. BP, Mobil and Z Energy are currently major shareholders.[3] The Government injected $80 million to enable the company to adapt to the new environment. A major efficiency drive was launched to cut operating costs....

https://www.rnz.co.nz/news/national/448417/nz-naive-to-shut-down-marsden-point-australian-analyst

Staggered and baffled
New Zealand researcher Toby Dalley said he was baffled at the blinkered way this country has for years been weighing the risks of running out of fuel.

Dalley looked into 15 years of risk assessments done for the government, for his masters degree research last year into New Zealand's oil security.

He said it was "staggering" how these reports relied on assumptions the market could weather any crisis.

https://www.rnz.co.nz/news/national/498300/petrol-prices-91-octane-expected-to-rise-to-3-point-50-a-litre-by-christmas

Retail petrol prices are forecast to rise to as much as $3.50 a litre for 91 octane by Christmas.

Rising oil prices and a weak New Zealand dollar were putting pressure on petrol prices, with the New Zealand dollar trading around 59.2 US cents ahead of Tuesday's US Federal Reserve's announcement on interest rates.

AA principal motoring affairs policy advisor Terry Collins said the closure of the Marsden Refinery had added to price of fuel, with unprocessed Brent crude prices rising to US$95 a barrel overnight - its highest level this year.

https://www.newshub.co.nz/home/money/2023/09/high-petrol-prices-could-see-interest-rates-increase-economist.html

High petrol prices could see interest rates increase - economist

[Ricky-bobby]

So frustrating how the country has backed itself into a corner with all this stuff.

[moka]

Interesting claim I just googled marginal utility of debt and most people agree with you to a point. I just wonder what point it becomes a burden. Obviously at 0% or negative rates, "never" is the answer so I guess we load up and wait for the central banks to cut.

https://seekingalpha.com/article/136058-the-declining-usefulness-of-debt

Someone on one of the many videos I watch on YouTube said it takes $2 of debt to generate $1 of GDP in the US now. I can’t remember who said it.

[moka]

THE PRINCIPLE OF NO PRIVILEGES WITHOUT RESPONSIBILITIES
Professor Antal E. Fekete

https://professorfekete.com/articles/AEF6thPillarOfMoneyAndCredit.pdf
(https://professorfekete.com/articles/AEF6thPillarOfMoneyAndCredit.pdf)
At the heart of the irredeemable paper money system of the United States is the fact that the Treasury and the Federal Reserve banks issue promises to pay which they do not redeem, do not intend to redeem, nor have they got the resources to do so.
In other words, the Treasury and the Reserve banks have been given the privilege to issue promises and, at the same time, they have been freed from all responsibility to redeem these promises.
Both of them wish to keep their favored position.

[mike2020]

Ok, if fuel costs do rise and have an inflationary effect surely a smart reserve bank would look through that as it would have to dampen spending similar to an interest rate rise anyway? Surely?

[jonu]

THE PRINCIPLE OF NO PRIVILEGES WITHOUT RESPONSIBILITIES
Professor Antal E. Fekete

https://professorfekete.com/articles/AEF6thPillarOfMoneyAndCredit.pdf
(https://professorfekete.com/articles/AEF6thPillarOfMoneyAndCredit.pdf)
At the heart of the irredeemable paper money system of the United States is the fact that the Treasury and the Federal Reserve banks issue promises to pay which they do not redeem, do not intend to redeem, nor have they got the resources to do so.
In other words, the Treasury and the Reserve banks have been given the privilege to issue promises and, at the same time, they have been freed from all responsibility to redeem these promises.
Both of them wish to keep their favored position.

The same concept is what makes identity politics so corrosive. Group rights without group responsibilities.

[moka]

The same concept is what makes identity politics so corrosive. Group rights without group responsibilities. Jonu can you give examples of groups rights without group responsibilities, so that we are on the same page. You may want to post on another more suitable thread. Just put a link on the Black Monday thread if you do. Thank you.

[moka]

https://www.youtube.com/watch?v=Il_1w5Kvt_A
Collateral Contagion Is The Big Risk Everyone Should Worry About | Market Analyst Gordon Long

We have a collateral contagion crisis that I think is coming, because nobody really knows what the true collateral is and it's changing we're seeing a collateral in the bank and the commercial real estate suddenly starting to change. So I'm not trying to scare people, you need to be aware of where the risk is. That's what I'm trying to say here. That doesn't mean the market's going to collapse. It's actually good news because those that are managing this know that if it gets out of control it's a monumental global problem and nobody is interested in that, China doesn't want that, Japan does not, the Bank of International Settlements they do not want that so they will do everything in their power including changing the rules and regulations that help bail it out.

What's your current assessment of the global economy and the financial markets?
Well there are two separate questions actually, the economy versus the financial markets they are a different breed than ever before.
When I first started this business the markets followed the economy that isn't what we have now. I don't think I've had a worse scenario than I've ever had to paint about the status state of the global economy, and the United States looks the strongest in terms of the globe whether I go through Japan, China, EU so it's a very bad looking and getting worse.

The financial markets actually look pretty darn good right now and I'm not talking about just the recent run we've had, but the liquidity that I'm seeing, the momentum that I'm seeing, what's happening with the earnings and there's reasons for it.

I got out in the fall of 1999 because the charts looked just as bad at the time and the market ran on and it went right in through March and I took a lot of flack. But a year later all that money had disappeared and what I had sold in the fall turned out to be a hero.
I feel like it's the same thing. This will go on until it won't and then it'll go ugly fast and that'll be it, I but I don't know when that's going to be.
There will be a triggering point and I can speculate on that but who knows what it'll be but something will take it down.

And the problem with it this time is we have a massive amount of ETFs out there that have never been tested and somebody can go hit a sell switch on their computer and we can just liquidate trillions of dollars quite literally. I remember in 2008 when the chief financial officers did that just and these were professionals and Bernanke had to march up to the hill and ask for money because he was five trillion dollars it just disappeared.
So it'll be the same kind of thing so the completely different beasts.

ETFs have been on a close to 15-year ride now of marching ever upward both from capital inflows but also prices and we've had a number of people on this channel talk about how the Magnificent Seven, the small number of very large firms, many of them technology that make up a very meaningful chunk of the S&P 500 market cap.

If capital starts coming out of the markets the indices are going to get hit particularly hard because 58c of every dollar coming out is going to come out of those Magnificent Seven stocks.
I've never I've never seen the breadth so narrow as it currently is with the Magnificent Seven and Nvidia and their contribution in it.

[Fortunecookie]

As a crude measure, I say a 7% mortgage rate is the inflection point where it really makes a dent in households budgets. Why I say this, just before covid banks were stressing testing borrowers at around the 7% mark so this will be the majority of borrowers. We have to acknowledge the smaller pool of borrowers that took out lending between mid 2020 to late 2021 i.e the concentration of risk. Not so much stress testing, but more so to do with negative equity i.e if they had to sell.

The obvious reasons why it is crude is because people have had payrises since, however that has been offsetted by inflation. But in short people who started borrowing for their mortgage further way back will be relatively better off.

A larger proportion of income will be assigned to the big three items - accommodation, food and transportation.

[moka]

https://www.youtube.com/watch?v=Il_1w5Kvt_A
Collateral Contagion Is The Big Risk Everyone Should Worry About | Market Analyst Gordon Long

6:41 AI right now is the driving force with the momentum in there.
I'm a big proponent of where AI is going but having lived through the technology before they go in spurts, they go in waves and we're so overextended it's going to have to find that consolidation. Today it's not a Buy and Hold strategy, you really have to have some degree of timing and balance at a very high level, I'm not saying on a daily, weekly basis but certainly on a quarterly, half year basis, you have to be adjusting more actively.You need a manager to do that by the way.

I'm a private investor so I do it myself and I know what I have to do and I've been doing this a long time and if you're not you're exposed right now because you're playing against some of the most sophisticated artificial intel programming structures and systems have been put in place. You're just not going to beat them unless you can take a longer term more systemic structural kind of approach and there are some great opportunities.

9:02 I very much caution that the most expensive thing in the market is chasing that last five percent. Whether we’ve got another five percent to go or 10 or 15 percent personally I'm leaving it on the table. I'm an investor so I have a I have a different view and I look at other opportunities that are in the market, much lower risk and over the longer term will give me a better total return I believe.

And I'm of the equity markets will actually follow from the credit markets, which are following from the debt market, the bond market and the currency markets on a global basis and they tie together pretty well. You get the warnings that way. I always say the equity market is the tail on the dog it's kind of the last to happen. Now it's busy wagging but the nose of the dog is smelling big problems.

10:33 The importance of the end of a great moderation. The great moderation - we've come through a period of 40 years where we've had low volatility, low interest rates, falling interest rates, general stability across the markets. So that 40 years, that great moderation we've concluded, what we believe has ended.

And it's ended for many reasons but the three easiest to understand - and it's not that these three have ended but have changed, and it's always about the rate of change, it's the first derivative and the three are globalization, financialization and mercantilism.

11:32 Globalization brought down costs, labor arbitrage cheaper place to put it in the supply chains and so we've been reaping the benefits of that in electronics and everything else in terms of costs for years. Well that is changing, Covid brought out some of the exposures with the supply chains and so that cost advantage and for other reasons inflation, has changed.

Financialization was about the interest rates continuing to come down and so now interest are going back up. And the question is how far they'll go back up, so the cost associated with interest is changing.

And then the whole role of mercantilism is also changing. And by mercantile I'm talking about places like Japan and China. What they do is they get our money for all their goods, but they don't keep our money they send it back to America and buy our bonds and why they do that is it drives the bond prices up but the interest rates down and therefore it's cheaper for us to consume, it also means a stronger dollar which means we can buy more of their goods so it's a great deal for them. And it just it actually makes us uncompetitive against them and it drives us into being a consumption economy and lasted for 40 years. And now we're a 70% consumption economy. We consume more than we produce.

[moka]

https://www.youtube.com/watch?v=Il_1w5Kvt_A
Collateral Contagion Is The Big Risk Everyone Should Worry About | Market Analyst Gordon Long

13:23 Now the other countries around the world are saying whoops is your credit still as good as it used to be? How much of those dollars do I really want to put with you? Japan's still buying, but they're starting to hedge their bets on that.

What it's going to mean higher volatility, higher inflation than we've been accustomed to.
Forget this two percent goal, it’s not going to happen, three percent they'll probably adjust it to, and even four and a half and it's higher if you really counted properly higher interest rates and high risk premium both on duration on the bond market and on the risk premiums and equities. We're beginning to see it in the bond market, haven't seen it in the equities but that's what's going to happen.

And why we have to do that is to keep the economy going, we need more GDP and so to get the GDP it means more money fiscal not necessarily money but fiscal money being pumped in which means higher inflation so they have to balance that so that there's a return and we can attract money.

14:50 I have this chart which shows the eras that we've been through and the great moderation there from the start of the millennia to Covid, basically as you said low inflation and moderate growth and low interest rates. Now you can see that inflation has taken off, the cost of debt has exploded.
Another chart here on the same topic which shows very clearly we've been from this era of contained inflation to now an era where inflation is obviously much harder to curtail.
We are going to see compression of things like the equity risk premium from this new era that we're in, but we haven't really seen that reflected much yet.

Risk premiums are going to go up on equities so they're going to have to absorb that risk premium which weakens the stock price. The ultimate result is that stock prices will come down because markets are more risky, both equity markets and the bond market.

16:51 It just there's more risk than we've been accustomed to over the period of the great moderation and they've started to happen in the bond market but they have not happened in the in the equity markets at all. Valuations at historic levels , the breadth being minor.
Right now you get better yield on a bond, the two years paying over five percent. I can't get that on the equity market so why would you invest in equity? I think the answer is that speculation. The equity risk premium is the lowest it's been in 20 years right now.

But that doesn't mean they're not going to go into stocks because there's so much momentum right now and a fear of missing out and if you're a fund manager you can't lose out on this lift. You miss it for a quarter, you're out of work. But they can take the risk because it's not their money it's their job.

17:59 Whereas if it's your money you can you really afford that risk?
But we can stay floating here for quite a period of time until there's nobody left to buy. The market is really good at knowing when there's nobody left on the sideline, and then it just pulls the rug out and there's nobody to buy because it's going down. They're all fully invested, then they have to sell to get out because of the pain. So, we haven't had a capitulation in the market since 2008. Even that was minor compared to what I've seen in previous ones so when that capitulation sets in it gets into the ETF discussion we had. When it happens it'll be quite violent.

But, and here's the here's the big but. Don't ever underestimate the government and what it'll do to change the rules to stop it from happening.

19:17 In 2008 I can remember when we came off that bottom and it was like why, there's still more here, why is it coming off the bottom and we were all scratching our head thinking is it time to jump in but it didn't say we should. And what it turned out is they changed the rules they went from all the 84 billion dollars worth of derivatives that were on all the major banks, they said well you don't have to mark them to market anymore you can mark them to magic, or mark them, do whatever you want, forget it, ignore it.

Suddenly it just changed the whole the rules and boom the market was off and as soon as it came out we understood the rules. And you need to understand this we never went back to mark to market. And the derivative Market is bigger so think of the exposure you're sitting there on there.

[moka]

https://www.youtube.com/watch?v=Il_1w5Kvt_A

Collateral Contagion Is The Big Risk Everyone Should Worry About | Market Analyst Gordon Long

20:18 The derivative market is bigger today than it was back then. The derivative market is massive compared to the stock and the bond markets.
The size of the derivative market is vast multiples more than the stock market and the bond market combined. Correct vast, even the global economy global economy 80 - 82 trillion dollars. We trade 650 trillion on the global currency and interest rate swaps alone, I think it's 660 trillion.

You have no visibility because it's traded over the counter. It's totally opaque through the Bank of International Settlements. They're the only ones that see it. I'm not saying there's anything nefarious going on here. I'm saying that's the reality, the derivative market is so large and so powerful that it's behind the scenes that you don't see that. The stock market and the bond market frankly are just kind of like little mirrors of what's really going on. They're the product of what's going on and I see it because inflation swaps, I look at the trading on inflation swaps how many people are following inflation swaps.

In 2008 when the market collapsed we learned about derivatives, we learned about collateralized data obligations and credit default swaps.

22:41 Do you know what collateral transformations are, do you know what collateral swaps are? Well because the collateral is now being re-hyped for land, for debt, being rehypothecated, in other words lent out in so many different channels that are claiming it, you don't even know who really has the real ownership of the underlying collateral.

We have a collateral contagion crisis that I think is coming because nobody really knows what the true collateral is, and it's changing, we're seeing the collateral in the bank and the commercial real estate suddenly starting to change.

You need to be aware of where the risk is, that's what I'm trying to say here. That doesn't mean the market's going to collapse. It's actually good news because those that are managing this know that if it gets out of control it's a monumental global problem and nobody is interested in that.

So yes, the entire system is geared towards not letting the derivatives market get into some sort of cascading collapse and they'll do everything they can including changing the rules and regulations to help bail it out.

24:27 We saw it in Britain and it almost brought down the country, the gilt was out of control within like a day. It brought down the government and she was the Prime Minister for less than like 30-35 days, but it was that serious and that's when they discovered the derivatives liability pledges that they were using, which was another structure unique way of using derivatives suddenly got out of bound and everything's based on boundary conditions, and so when you start to get volatility swaying and swaying across multiple markets, currency, bonds all at once, it's in multiple countries it's almost impossible to know which ones are going to get pushed out of boundary conditions. We're seeing it with the Yen here recently starting to push that upper end of the yield curve control, that all of a sudden everybody's in a panic mode and once it starts that's the exposure and it's being closely monitored, it's being closely followed, it's being played very carefully but there's so any things that can fracture, that's where the risk comes in and that shows in why the premiums are going up, why the bond yields are going up.

And we're talking here about hundreds of trillions of dollars of derivatives which are basically sort of side arrangements made between many different types of parties and because of the complexity and this huge scale it's really hard to know that if one asset class gets in trouble then the question becomes well is that a rehypothecated asset and if so then who else thinks they're holding that and if it gets written down over here does that mean that hedge fund or pension fund over here then starts to blow up, and then they have to sell collateral which then triggers out yet another issue here . It's so enmeshed and entwined in ways that I don't think a human can have full view of the entire interconnectedness of it all. It's this super complex system that we just really can't fully control and so that if there is a failure in here that gets away we just don't know how it's going to ripple through this. We're just going to have to watch it unfold in real time and kind of be reacting to everything.

[Valuegrowth]

https://www.youtube.com/watch?v=Pl__BG9MU1U

[Valuegrowth]

https://www.youtube.com/watch?v=4TLIq-4NyTY

[bull....]

sp500 broken down into the original breakout zone which was 4200 - 4300 . wow
normally it would retest and carry on back up according to theory so lets see how it plays out

[Daytr]

sp500 broken down into the original breakout zone which was 4200 - 4300 . wow
normally it would retest and carry on back up according to theory so lets see how it plays out

Not even October yet! Yeah needs to bounce quick otherwise DOW might revisit 32,500.

[bull....]

Not even October yet! Yeah needs to bounce quick otherwise DOW might revisit 32,500.

yep and seasonals are playing out well. this week has a 80% probability of being a down week i believe reinforced that it is the week after after triple witching.
i be watching 4200 very much so , a break down could be :scared:

[winner69]

Some guy at Ramp Capital in US not having a good day

Market near 4-mo lows. It's finally over this time. We may never hit new highs again in my lifetime.

[percy]

Some guy at Ramp Capital in US not having a good day

Market near 4-mo lows. It's finally over this time. We may never hit new highs again in my lifetime.

I hope he is a 95 year old, and not a 25 year old.....lol

[Valuegrowth]

Not even October yet! Yeah needs to bounce quick otherwise DOW might revisit 32,500. Dow is way too high. Time has come to separate outstanding companies with attractive value from the broader market. I am a big bear for historically overvalued
assets. I prefer strong balance sheets.

[Toddy]

Funny. I was just making the same comment about New Zealand rugby.

[Aaron]

Some guy at Ramp Capital in US not having a good day

Market near 4-mo lows. It's finally over this time. We may never hit new highs again in my lifetime.

We have heard that story many times, any reason why he thinks this way??

Ramp Capital, maybe just downramping to buy the dip?

[Baa_Baa]

Dow is way too high. Time has come to separate outstanding companies with attractive value from the broader market. I am a big bear for historically overvalued
assets. I prefer strong balance sheets.

Which of these are historically overvalued with weak balance sheets? https://disfold.com/stock-index/dow-jones/companies/

As you'll see the index is massively dominated by Apple and Microsoft, so movements in the index are correspondingly by their movements.

[bull....]

Which of these are historically overvalued with weak balance sheets? https://disfold.com/stock-index/dow-jones/companies/

As you'll see the index is massively dominated by Apple and Microsoft, so movements in the index are correspondingly by their movements.

and if you created an index of the dominate stocks which propelled the market higher they made a double top a little while back

[Valuegrowth]

Which of these are historically overvalued with weak balance sheets? https://disfold.com/stock-index/dow-jones/companies/

As you'll see the index is massively dominated by Apple and Microsoft, so movements in the index are correspondingly by their movements. I agree few stocks are running the show in world indexes.

[winner69]

and if you created an index of the dominate stocks which propelled the market higher they made a double top a little while back

A bit like this

[bull....]

A bit like this

yea ... thats some gap between those 493 stocks and the magnificient 7 lol , guess when all the fund managers run to the exits to lock in the yr's gains does that mean the gap closes ?

[Bjauck]

Some guy at Ramp Capital in US not having a good day

Market near 4-mo lows. It's finally over this time. We may never hit new highs again in my lifetime. I wonder if all assets are overvalued at the moment. US commentators seem to think the American housing market is overvalued. (And the American market is much more affordable than NZ residential property!) Yet few are predicting a big fall.

Do the current valuations of housing and listed companies reflect climate risk? In the US Dave Burt of “the Big Short” reckons 20% of homes there are overvalued owing to climate change risk. Given NZ conditions and high current valuations, I imagine at least that percentage of residential properties here could have climate over-valuation too.

Are we letting the orchestra distract us as we progress through the melting icebergs?

A hidden time bomb? A ‘Big Short’ investor sees financial disaster brewing in housing marketshttps://www.cnbc.com/2023/04/06/a-big-short-investor-sees-disaster-brewing-in-housing-markets.html

[winner69]

Leveraged hedge funds playing with bonds going to blow up the financial system big time

https://www.smh.com.au/business/markets/the-trade-that-could-blow-up-the-financial-system-20230927-p5e7wj.html

[Azz]

The Magnificent Seven can be further broken down into the Magnificent One: Nvidia!

Gain, Year To Date:
-------------------
NVDA ... 187%

META ... 150%
TSLA ... 103%
AMZN ... 56%
GOOGL ... 48%
AAPL ... 36%
MSFT ... 30%
-------------------

[Snoopy]

The Magnificent Seven can be further broken down into the Magnificent One: Nvidia!


Thanks for that Azz. I have added another column of information to yours



Gain, Year To DatePE Ratio 27-09-2023


NVDA187%101


META150%35.8


TSLA103%69.3


AMZN56%100


GOOGL48%28.2


AAPL36%28.9


MSFT30%32.2



Funny I always associated 'the magnificent seven' with a bald gunslinger in a hat. What I see in the above list are dreams of global domination priced to match. There is no value to be had here. if the price of all seven of those magnificent vanity projects halved tomorrow, you could still make a case for them being overvalued. If I was in a managed fund holding any of those I would be 'goneburger tomorrow'. The 'magnificent flop' awaits....... Come to think of it that bald gunslinger did wear a floppy hat - an omen?

SNOOPY

[Azz]

Thanks for that Azz. I have added another column of information to yours



Gain, Year To DatePE Ratio 27-09-2023


NVDA187%101


META150%35.8


TSLA103%69.3


AMZN56%100


GOOGL48%28.2


AAPL36%28.9


MSFT30%32.2



I bet you haven't read their quarterly eh. Because they blew expectations out of the water. And they're gonna do it again this quarter. So you've done a schoolboy error with your PE.

[Snoopy]

I bet you haven't read their quarterly eh. Because they blew expectations out of the water. And they're gonna do it again this quarter. So you've done a schoolboy error with your PE.


Quarterly expectations mean nothing when decades of growth are built into the share price already.

SNOOPY

[Azz]

Quarterly expectations mean nothing when decades of growth are built into the share price already.

SNOOPY

You're wrong.

[ValueNZ]

You're wrong.
Huh? Make an argument as to why Snoopy is wrong, don't just state it.

[Azz]

Huh? Make an argument as to why Snoopy is wrong, don't just state it.

No need to argue anything. Let's watch the market work its magic, let's see who's right.

[ValueNZ]

No need to argue anything. Let's watch the market work its magic, let's see who's right.
Your posts make me want to short NVDA out of spite.

I won't because I don't think it's good practice but still it's hard to believe there are buyers of stock out there that throw business fundamentals out the window in favour of "watching the market work its magic".

[Azz]

Your posts make me want to short NVDA out of spite.

I won't because I don't think it's good practice but still it's hard to believe there are buyers of stock out there that throw business fundamentals out the window in favour of "watching the market work its magic".

It's a score. There's no need to discuss anything. What's the share price of Nvidia? What will it be when they demolish the next quarter? What will it be in one year's time? etc

[ValueNZ]

It's a score. There's no need to discuss anything. What's the share price of Nvidia? What will it be when they demolish the next quarter? What will it be in one year's time? etc
You do realise that as a result of their large multiple expansion this year they are far more likely to experience multiple contraction next year? It's called mean reversion.

[Azz]

You do realise that as a result of their large multiple expansion this year they are far more likely to experience multiple contraction next year? It's called mean reversion.

You can say what you want; let's see Nvidia's next quarterly numbers. And the quarterly after that... The spend on A.I. is unreal, and Nvidia controls the market. I haven't seen anything like this ever actually - the closest is Steve Jobs turning Apple into the biggest company in the world, but even that is in the shade as to what's happening with the first generation build-out of A.I.

[Baa_Baa]

Your posts make me want to short NVDA out of spite.

I won't because I don't think it's good practice but still it's hard to believe there are buyers of stock out there that throw business fundamentals out the window in favour of "watching the market work its magic".

You'd be doing pretty well shorting Nvidia earlier this month, down about 25% from nose bleed highs. Check out the longer dated options for insights into what the market really thinks. Too far too fast? Market thinks so at the moment.

But this is a confusing conversation between someone who views the share price as value and success, and someone who views long term returns at the right price as success.

[Valuegrowth]

Answer to inflation, possible deflation or recession is to stay with strong balance sheet companies if we have bought them at attractive prices or are planning to buy in market sell-off or market weakness.

https://www.investopedia.com/ask/answers/042115/whats-best-investing-strategy-have-during-recession.asp

“Conversely, investors who want to survive and thrive during a recession will invest in high-quality companies that have strong balance sheets, low debt, good cash flow (https://www.investopedia.com/terms/c/cashflow.asp), and are in industries that historically do well during tough economic times.”

[Valuegrowth]

https://www.youtube.com/watch?v=tYUSXFLGA0U

[Azz]

You'd be doing pretty well shorting Nvidia earlier this month, down about 25% from nose bleed highs. Check out the longer dated options for insights into what the market really thinks. Too far too fast? Market thinks so at the moment.

But this is a confusing conversation between someone who views the share price as value and success, and someone who views long term returns at the right price as success.

Baa_Baa, do you have ANY clue as to what Nvidia did last quarter? You must have read the quarterly numbers, surely, for you to be so enthused with the idea of shorting the world's number one stock.

And Share Price is Long Term Returns. The two things go together. There's a dangerous fantasy on these boards that somehow "value" - ie that person's subjective idea of what a company should be worth - is divorced from how the market actually values companies.

[Baa_Baa]

Baa_Baa, do you have ANY clue as to what Nvidia did last quarter?
Yes, I do and for two thirds of last three months the market drove up the price 100's of percent. But this month, it's down about 25%. Holding would have ignored all the screaming TA to take profits and get out.


You must have read the quarterly numbers, surely,
Yes, very impressive. The market rewarded that, but then ditto above.


for you to be so enthused with the idea of shorting the world's number one stock.
Who said I was enthused? You have a habit of putting words in people mouths. I suggested that a savvy trader would have read the tape and got out, or gone short a few weeks ago, and so far they're right and making bank.

[troyvdh]

Thanks Value.I agree its been many decades since we have experienced a financial conflagration...cheers,

[Azz]

Yes, I do and for two thirds of last three months the market drove up the price 100's of percent. But this month, it's down about 25%. Holding would have ignored all the screaming TA to take profits and get out.


Yes, very impressive. The market rewarded that, but then ditto above.


Who said I was enthused? You have a habit of putting words in people mouths. I suggested that a savvy trader would have read the tape and got out, or gone short a few weeks ago, and so far they're right and making bank.

I'm not a trader.

I'm long-term hold for Nvidia. I'm well in the money. They also pay a dividend.

You've got no clue what's happening in the world. A.I. is not "ChatGPT"; it's the rearrangement of "skills" from human to datacenter plug in, and the savings are immense - and who's providing it? Who is the number one company in the number one industry? Is it some retirement home operator in New Zealand? That's the level of creativity on these boards by the big mouths who attack success. I spent some time recently looking at the retirement operators in this country, outcome: bunch of thieves, trouble ahead for that industry. The point I'm making is we here in this country can invest easily now in US companies. Why are you so angry about me early investing in the world's number one stock? And I told these boards too. I know A.I., I know tech, and I know the markets.

You sound like one of those idiots who parroted the same nonsense about Apple years ago.

You're literally saying "one good quarter, so what", for the leading company within an industry that is growing exponentially. And this garbage about "PE" lol, that gets thrown out the window doesn't it when the "E" goes up.

[Valuegrowth]

https://www.youtube.com/watch?v=bHyd01znyXI

[ValueNZ]

There's a dangerous fantasy on these boards that somehow "value" - ie that person's subjective idea of what a company should be worth - is divorced from how the market actually values companies.
In the majority of cases markets operate efficiently and will value companies pretty fairly. But what you are suggesting is that price=value all of the time. If that were true, what are you doing picking stocks?

[Azz]

In the majority of cases markets operate efficiently and will value companies pretty fairly. But what you are suggesting is that price=value all of the time. If that were true, what are you doing picking stocks?

That's NOT what I'm saying at all.

Look, you do things your way, and I'll do things my way.

[Fortunecookie]

https://www.interest.co.nz/economy/124493/westpac-mcdermott-miller-employment-confidence-index-has-turned-negative-first-time

Wage inflation might be trending down.

[Snoopy]

I'm not a trader.

I'm long-term hold for Nvidia. I'm well in the money. They also pay a dividend.

You've got no clue what's happening in the world. A.I. is not "ChatGPT"; it's the rearrangement of "skills" from human to datacenter plug in, and the savings are immense - and who's providing it? Who is the number one company in the number one industry? Is it some retirement home operator in New Zealand? That's the level of creativity on these boards by the big mouths who attack success. I spent some time recently looking at the retirement operators in this country, outcome: bunch of thieves, trouble ahead for that industry. The point I'm making is we here in this country can invest easily now in US companies. Why are you so angry about me early investing in the world's number one stock? And I told these boards too. I know A.I., I know tech, and I know the markets.


Well Azz, I am not saying you are wrong. But in my experience the best investment returns are made when there is a disconnection between price and long term value. if Nvidia is the future and it is priced as though it takes over the future, then there is no money to be made by buying Nvidia now. But do you really think that Nvidia will have a free run to exploit AI? That no competitor will ever emerge? That the Nvidia business plan will run to perfection? I am not saying it won't happen. But an awful lot of ducks have to line up to make Nvidia a good investment from here, if you buy in today.



You're literally saying "one good quarter, so what", for the leading company within an industry that is growing exponentially. And this garbage about "PE" lol, that gets thrown out the window doesn't it when the "E" goes up.


Exponential growth will take care of the earnings. No need to worry about that old fashioned PE stuff. It is different this time......

Some of us who have been around the markets a while have heard this story before.

SNOOPY

[moka]

https://www.youtube.com/watch?v=Il_1w5Kvt_A
Collateral Contagion Is The Big Risk Everyone Should Worry About | Market Analyst Gordon Long

27:00 The complexity now is beyond the peril and here's the problem. You can't fix it because you don't even understand what's going on. Because it's so opaque there's nobody that has real visibility. You could have a problem in Argentina in a company or a bond and that cascade like the first World War in the Balkans could suddenly take over. That's the exposure that we're currently in and you don't know what type of derivative it might be.

The government etc are trying to hold the system together and keep it running as happily as they can by stealth liquidity. The macro data, it's flashing recessionary warnings and yet stock market is powered higher this year and the recession hasn't hit.
We're doing very aggressive deficit spending this year. We've got a wartime deficit in a peacetime economy.

29:45 The system is kind of being propped up right now by this this large amount of stealth liquidity.
The confusion comes that says look we're tightening with quantitative tightening, we're tightening on our credit standards, so therefore we're taking the liquidity out of the market at a pretty sound level.
How can we have markets going up? Well, the answer is we have stealth liquidity, and it's calculated, it's planned, and they have taken advantage of two events, one in March with the deposit run out of Banks, and then when we finally resolved the debt ceiling in June.

31:15 So we came in with this BTFP program. The government pumped money into the banks at really the same level of which the deposits are going out and the deposits are still going out and we're still putting more money into it. So, we're not pumping liquidity into the economy, the central bank is pumping money into the banks to keep them solvent.

It's going to come to an end. They can't keep doing this for a number of reasons.
It fed in with this rush into artificial intelligence that was able to happen and it's taken the market with it, but it's unsustainable unless the government continues to hand out money directly, and that is printing more of it and taking our debt even higher and to do that how is it going to pay the debt. Where is the funding going to come to bring the new money in?

35:27 We had two sugar rushes this year, one economic from the stealth liquidity and then one in the financial markets from all the hype and AI.
I guess the question in most investors’ minds right now is can this continue through the election. Presumably part of this is being done so that the administration doesn't have an economic crisis going into an election year.

36:36 The stealth system I just described is unsustainable through to the elections.
The real question is what is their plan to replace it and when is that plan going to unfold.
One plan is associated with using contingent liabilities to guarantee credit that are issued by the government to places like a green deal, it could be climate change, whatever, but organizations that they will guarantee their lending so that they can continue to sustain their spending and their growth.
Contingent liabilities do not go on the debt of the balance sheet of the government. They only go on if somebody defaults on the guarantee. They just sit there until somebody defaults and then the government has to step up.

37:42 This is almost kind of like an off balance sheet transaction, you're not going to have visibility into this. No visibility, you won't even know what's happening, there's no paperwork other than the government says that it has these contingent liabilities somewhere down in a small print and they won't give you any details.

But they'll do that because that's the way that they can easily bridge this and so it's off balance sheet until somebody defaults. That'll be part of the problem or part of the answer, if they're not already doing it because it's the only way out that's sustainable over a longer period and really continues this kind of MMT version of bidennomics.

The second part of it and to me this is the most pressing is that most of the countries are now selling off their dollars not all of them but China, Russia sold off all its U.S treasury. China has taken theirs from about 1.3 down to eight or nine hundred billion.

38:41 All of the Brics are pretty well are getting out of the dollar. The only one that's has been buying, but it's flat has been has been Japan and the Japanese carry trade is so profoundly important to the global economy and has been since the 1970s for 40 years that people just miss it the importance of it.

[moka]

https://www.youtube.com/watch?v=Il_1w5Kvt_A
Collateral Contagion Is The Big Risk Everyone Should Worry About | Market Analyst Gordon Long

39:04 And so it's really trying to ignite the Japanese carry trade and that requires a stronger Yen for them to lend, it requires a larger differential and these are all falling into place.
When it was going down on the left (on the chart) that was a dollar weakening so the Yen was going up and so you could if you were sitting in Japan and you're getting nothing on your interest, one percent you're not going to lend money.
But you make it if the yen is going through the roof, so you lend the money out because they're going to pay you back in Yen and so you're making your money on the currency. You're not making money on the lend you'll end up one percent. You got somebody sitting over an America and says oh my God I could take one percent in Japan, I can buy treasuries here at four and a half, pocket three and a half percent and I put it up in leverage, I can leverage it to twenty percent.

What am I missing here? Well, the answer is you hedge the currency and so the banks throughout the world, insurance companies, the pension plans, this is nothing new to them they've been doing it for 40 years and so they need it and they need the business so there's a big push here. So, the last few years we've had some problems with quantitative tightening, it hasn't been as good for the Japanese, so the Japanese rate of buying has been flat.

And that's been a problem, with the rate at which we're creating increasing the debt, like we need to drive another six trillion dollars up here without putting it on the FED balance sheet so we need people like the Japanese carry trade and there are other carry trades. I'm just focusing on the Japanese because it's so substantial and by the way we cannot have them selling their dollars to shore up their currency. If it keeps falling so that's another push that they are I believe they're highly orchestrating right now and you can see it currency markets, see it in the credit, you know the footprints are pretty large.

42:35 The FED is going to have to pivot at some point because either it fixes inflation and can declare a mission accomplished and start bringing rates down, or as more people think something will break and the FED will have to step in to rescue and start bringing rates down That will cause the long end of the duration curve in U.S treasuries to rise and you can sit in the safety of treasuries and get paid and then when that rescue, that pivot happens you're then going to get capital appreciation on top of all of that.

It's not just something that's going to break, there'll be weaknesses in the market and we think that the FED will then fairly aggressively will pivot.
I don't think it's imminent unless something breaks. I think it could drag itself well out into first or second quarter of next year before it really does pivot. How far and deeply they go will be less than you think. Inflation is nowhere even close to being solved.

46:05 The government will be forced to push more money out through the fiscal spigot and that'll I won't call it hyperinflation yet but I will call it another big surge and it'll be because inflation comes back in a third wave and very strongly.

[moka]

https://www.youtube.com/watch?v=Il_1w5Kvt_A
Collateral Contagion Is The Big Risk Everyone Should Worry About | Market Analyst Gordon Long

46:30 We forgot the three things that got us out of the 70s, and we're not fixing those and that's why I say I'm so confident that we're going to see inflation come back in another big wave. Three things that got us out of the 70s – Volcker magic, petrodollars and the Japanese carry trade.

By the Volker magic I'm not talking about the great story everybody knows that they took interest rates up to 19. I’m talking about the real way he solved it. What Volcker was before he became chairman he was the president of the New York Fed. And he believed then that the only way he could solve inflation was to get rid of the liquidity, tighten the liquidity spigot. And so he forced the liquidity spigot to be tightened before he actually in the summer of 79 became chairman. And when he went in as chairman he was forced to increase interest rates because the economy was falling so bad that he increased the rates he drove them up quite significantly and he drove them into a recession, so by the summer of 80 we were in a recession and he had to bring him down. He looked like a fool.
But he knew that the real solution was the liquidity and what you did with the rates was short term, it would give you a recession, it would solve with problems shorter term but it was not going to solve the inflation.

The second time around he just talked the inflation right up and he says because I know I bought enough time on that liquidity I have really slowed it, I got to give it a shot and he did it and he broke it and managed that liquidity level all the way through the great moderation.
I know we pump money with quantitative easing and we put it out, but it was in a managed controlled fashion it wasn't volatile, it wasn't like the Biden Administration pumping out six trillion dollars like a shock to the system. That and the stealth liquidity that is pumping it into the system, that ain't going to fix inflation.

49.21 And we haven't solved the energy problem. I said there was three, the Volcker problem, there was the petrodollar that the Secretary of State put into place and that was agreement with Saudi Arabia and the petrodollar as of eight months has gone away and remember the petrodollar was all about supporting Saudi Arabia, supporting them with arms and keeping them in power, the King, energy would only be bought and sold in dollars U.S dollars and they had to take the money and deposit it in a U.S bank in treasuries, from there they could do other things with it. It had to do that, which solved lending problems, it solved the beginnings of inflation problems in terms of the energy costs.

We've just ostracized Saudi Arabia so badly that no longer are they transacting and well they now have the BRICS 11, and three of them now control 48% of the world's energy market so we have this energy problem that got us got us out of the 70s, like Volcker got us out of the 70s.

Then the third was the Japanese carry trade that we brought really into existence then and it's the only one we may be able to reinvent. I remember these deals and how important it and it allowed us to consume more than we produced for 40 years. We're botching at least two of those and are not going to be able to rely on all three of those factors that led to this great moderation. And we're gonna have to figure out how to navigate a new world that doesn't involve all of those.

What's going on right now is unsustainable, there probably is some sort of correction coming, unclear exactly when but probably measured in quarters not years, where the FED will likely have to intervene, yields will come down long bond prices will go up but then because of the dramatic centralized response both on the on the monetary side from the central banks but probably also maybe on the fiscal side, as well inflation's going to re-explode and they're going to have to tighten rates again to get that under control and so there's going to be some sort of down and up progression.

When I had Felix Zulauf on this channel at the beginning of the year he said we're now entering the decades of the roller coaster where you're just gonna see these this high volatility ability and I think what you just described there is kind of exactly the type of thing that Felix is talking about where you're going to see kind of very aggressive policy in one direction until the whole system starts to fall apart and you're going to see it lurch to the other side on policy and we're going to just see a lot of this violent swinging back and forth and that's going to cause roller coasters both in terms of economic growth but also obviously in terms of financial asset prices

[troyvdh]

Guys...with respect remember the principle of KISS...again we are way overdue for ...some may say ..a "correction".
As Warren said...."lets see who is not wearing trunks"....

[moka]

https://www.youtube.com/watch?v=Il_1w5Kvt_A
Collateral Contagion Is The Big Risk Everyone Should Worry About | Market Analyst Gordon Long

53:19 It'll still be much more volatile, and specifically in the non-equity markets, it's going to be in currencies and in bonds and in credit and then especially in things like high yield credits.

I sent you a chart on inflation saying inflation comes in waves and I've said it's going in three waves but we've found that the inflation it stays with us, and we keep going. It appears we go from inflation to deflation but the answer is that we have both and they're always working but they get more emphasis at any given time and lately we've fallen into a deflationary part it doesn't mean inflation has stopped it may slow down.
What's really driving this volatility and what's the core of it is that inflation is getting to be more and especially in the United States with a 70% consumer economy.

57:14 We're eating our seed corn. If you were to increase wages which have been under under utilized for years, the share of the profits that are going to labor, they have every right to be striking right now and the fact that we're seeing strikes at the level that we're seeing right now says that we're very much at the beginnings of this inflation driven from labor.
When the UPS settled at 170 000 for a driver the shock waves went through every union in the country. Automotive UAW went out on strike and they want a 40 increase, they want a four-day work week paid for five days, and they want all their pensions reinstated. We've got this massive move towards strikes and that's why the service sector are having to pass it on so that another and that has nothing to do with energy, it has nothing to do with food which will spike on food and energy and fertilizer so it's coming.

58:43 Artificial intelligence is going to be very, very threatening to the professional white-collar workers as more and more apps unfold. I don't be political here but I have to make the statement. We got something like 6 million thereabouts immigrants right now coming across the southern border. That's not by coincidence, that is planned. And it's actually good news bad news because they're going to need jobs. The realities are that they're going to want to work and they're not going to demand 40% increases.

I think that this is a way that the bidenomics is looking out because they know the inflation wave is coming, they know this is a given no matter what they want to tell you.
We had these just-in-time global supply chains that we found out were highly efficient, but not resilient, and we don't want to be caught the way that we were caught during the pandemic but of course labor costs a lot more here than it did in places like China. An influx of cheap workers will be one of the ways in which we absorb some of the shock of reshoring.

I have to stress with our listeners that you got to pay attention to today, this is politics, these are huge strategic moves that are going to impact profits and direction and funding and liquidity coming out of the government because they're cornered, they're trapped. If you were sitting in the White House what are you gonna do, you're not going to just let it happen. I don't know what they're gonna do.

1:02:30 I'm going to take all this stuff into consideration. I don't want to become collateral damage. I think this is a time to take your foot off the equity side of the house. There's other ways to make money other than the stock market there will be a time to come back in.
I think that there should be an element of gold and silver in your portfolio, but I really caution because you can guarantee that the government will tax the living heck out of it, they will regulate it or they will fix the pricing.

The whole move to commodities I think is still in front of us but it's still out of way, so that we've had the first wave of that of investing in commodities across from grains right across the spectrum through energy. But there's a time and a place because the whole advent of the BRICs 11 has almost cemented that into place where money really is going to shift, it's not about de-dollarization, it's about the real value of money, being you either build it, you mine it or you produce it, you don't print it and so though the commodity players are so powerful now that they're going to start dictating what you pay and that's where the pricing is going to be. So, at some point commodities are going to begin their second big wave up so that's what you need to be giving a lot of thought.

On the shorter term I believe that the investment focus is in the area of bonds, it's in the area of credit and in area of high yield risk zombie corporations. This is time to be prudent that's what I'm trying to say, time to be cautious, it's a risk, it's a world in change right now and we can't forecast it but it'll be your ability to react to it and have the capital and money available.

When it does happen and it's so obvious this is the best investment opportunity you've ever had, but it's too late because you don't have any money and you've lost it on the move and you got into early or whatever. If you had just been patient.

1:06:07 I'm actually more optimistic about what's in front of us. This is a world shifting from a unipolar to a multi-polar world. There's some great opportunities so don't be frightened of it but just do your homework. A big period of transition here and as a result there's probably going to be some pretty big repricings as we head into the transition and you want to make sure first and foremost that you don't get wiped out so that you can deploy your capital.

[Valuegrowth]

Stocks and bond sell-off have resumed.Oil is bucking the trend. More pressure for industries and other consumers.

[bull....]

Stocks and bond sell-off have resumed.Oil is bucking the trend. More pressure for industries and other consumers.

yep continuation of the trend in oil , bonds and now stocks. watch around 4200 sp500

oh and i forgot watch the triple bottom line in the sand on the nz50 capital

[winner69]

Sharetrader poster from years ago Dimebag, now a Fund Manager in Singapore, considers long term US treasury debt to be uninvestable r

[mike2020]

Should you only invest in shares? (morningstar.com.au) (https://www.morningstar.com.au/insights/personal-finance/239695/should-you-only-invest-in-shares)

I found this a useful read this morning. All things considered.

[Daytr]

Pretty good bounce by the NASDAQ towards the end of trading.
Charts look like all sorts of awful.
Gold down sharply as well which quite often happens in a sharp risk off environment as margin calls get hit and the baby gets sold along with the bath water.

Gold got smashed about 30% in 2008 only to go on and treble over the next three years....

[Azz]

Well Azz, I am not saying you are wrong. But in my experience the best investment returns are made when there is a disconnection between price and long term value. if Nvidia is the future and it is priced as though it takes over the future, then there is no money to be made by buying Nvidia now. But do you really think that Nvidia will have a free run to exploit AI? That no competitor will ever emerge? That the Nvidia business plan will run to perfection? I am not saying it won't happen. But an awful lot of ducks have to line up to make Nvidia a good investment from here, if you buy in today.



Exponential growth will take care of the earnings. No need to worry about that old fashioned PE stuff. It is different this time......

Some of us who have been around the markets a while have heard this story before.

SNOOPY

Let's see who's right. I'm saying Nvidia will be a massive gainer, from here. (Timeframe: 2 years, and 5 years, and 10 years.)

[Azz]

Exponential growth will take care of the earnings. No need to worry about that old fashioned PE stuff. It is different this time......

PE is one of the most useless metrics there is. It causes unintelligent behaviour: "The PE is too high! Won't touch that with a barge pole", then company crushes earnings and that PE goes in the bin. The other issue with PE is it is completely disconnected between industries and even stocks within industries; for some unknown reason, share market participants have massively varying degrees as to acceptable threshold for the magical PE number.

[Valuegrowth]

Should you only invest in shares? (morningstar.com.au) (https://www.morningstar.com.au/insights/personal-finance/239695/should-you-only-invest-in-shares)

I found this a useful read this morning. All things considered.

Thanks. Yes.

[Valuegrowth]

China's property stocks are also falling heavily. Asia's property bubble is worse than other markets. Way too high. Under any value method cannot justify property prices in many Asian countries.

[bull....]

NZ 10 YR hitting new highs this cycle today 5.29 %
rising oil prices , falling dollar , increasing nz debt , increasing food prices
inflation tick up again soon
OCR rates in NZ probably going up again to the 6% i predicted some time ago along with more mtge rises and more strain on the NZ economy

[winner69]

NZ 10 YR hitting new highs this cycle today 5.29 %
rising oil prices , falling dollar , increasing nz debt , increasing food prices
inflation tick up again soon
OCR rates in NZ probably going up again to the 6% i predicted some time ago along with more mtge rises and more strain on the NZ economy

Both you and me got ridiculed when we said OCR could go to 6%

Likes likely now eh mate

[Valuegrowth]

It's pretty simple to understand. Interest rates cannot drop drastically even in 2024. Inflation cannot control using interest rates. Oil sharks, traders, speculators and investment banks also betting for high oil prices. End result is high inflation. Cost of doing business also will go up further. I am hiding in outstanding, debt free and low debt strong balance sheet companies.

[bull....]

Both you and me got ridiculed when we said OCR could go to 6%

Likes likely now eh mate

yep i think you said it before me too

[Daytr]

I do remember someone calling for 10% or might have been higher as the RBNZ rate.
Can't remember who though

[JBmurc]

Stocks and bond sell-off have resumed.Oil is bucking the trend. More pressure for industries and other consumers.

Great for OIL stocks ..buying more ... very undervalued ...

[JBmurc]

I do remember someone calling for 10% or might have been higher as the RBNZ rate.
Can't remember who though

John Key was predicting 10% home loan rates ... but 10% RBNZ rate would crush most lenders

[Jaa]

China's property stocks are also falling heavily. Asia's property bubble is worse than other markets. Way too high. Under any value method cannot justify property prices in many Asian countries.

Agreed and this is little understood outside of Asia. Lots of empty buildings both residential and commercial in many Asian countries slowly deteriorating. Price trends look ok in local currency but not in USD/EUR. Depreciating currencies do a lot of the work.

Demographic crashes underway in China, Taiwan, Korea, Japan will not help.

[ValueNZ]

Let's see who's right. I'm saying Nvidia will be a massive gainer, from here. (Timeframe: 2 years, and 5 years, and 10 years.)
Hey Azz turns out Chris Bloomstran has a short position on Nvidia...

What would your rebuttal be to what Chris Bloomstran has to say about Nvidia in this clip (https://www.youtube.com/watch?v=kM8Z7cWtKV4&t)? Watch between 1:03:14 to 1:06:43.

[Valuegrowth]

Floating rate is already over 8%. Other rates vary from around 7 to 8. Probably, mortgage rate can hit 9. If I am correct floating was cheaper before 2020. I used floating rate for a very short period and then I went with one-year rates. I never fixed my mortgage rates for more than 2 years. However, after analysing interest rates trend, I took 50% for 4 years and other 50% for 2 years in my last renewal. Not bad. But I am going to get hit in my next renewal in September next year. Fingers crossed for better rates.


John Key was predicting 10% home loan rates ... but 10% RBNZ rate would crush most lenders

[Valuegrowth]

https://www.youtube.com/watch?v=DvEvaj-xeSc

[Valuegrowth]

https://www.youtube.com/watch?v=IqKIlLS7ln4

[Baa_Baa]

Hey Azz turns out Chris Bloomstran has a short position on Nvidia...

What would your rebuttal be to what Chris Bloomstran has to say about Nvidia in this clip (https://www.youtube.com/watch?v=kM8Z7cWtKV4&t)? Watch between 1:03:14 to 1:06:43.

A curse on you is surely coming soon, like who would suggest a SP that has had a 4-500% increase in a short while, and recently a 25% selloff, despite the pumping, would be in the sights of the short sellers? They must be morons.

You obviously don't get it that AI is the future, Nvidia also owns AI, they're the sole beneficiary of AI, and their earnings will outmatch any of the big five who've invested billions into AI, for 105 years at least, 105 PE is irrelevant as earnings will catch up and overtake PE (105 years for earnings to catch up with price).

What a great investment right now. Uh, yeah, ok, listening not listening. Short it? What moron would suggest that?

[JBmurc]

Floating rate is already over 8%. Other rates vary from around 7 to 8. Probably, mortgage rate can hit 9. If I am correct floating was cheaper before 2020. I used floating rate for a very short period and then I went with one-year rates. I never fixed my mortgage rates for more than 2 years. However, after analysing interest rates trend, I took 50% for 4 years and other 50% for 2 years in my last renewal. Not bad. But I am going to get hit in my next renewal in September next year. Fingers crossed for better rates.

Yes not hard to get to 10% floating ..think it is coming early next year .. for the first time ever I fixed a loan for 5yrs 5.99% ... for the last 15yrs+ always been 1-2yr fixed
I do have another loan coming off early next year ... but hopefully, I'll be paying that one off or at least reduced by a good chunk..

[Valuegrowth]

I made a mistake. I fixed one loan for five years 4.95%. Other loan for 2 years 5.39%.I am also planning to pay off half of my mortgage using my Kiwi saver by the time I retire. If I see great investment opportunities at that time, I will make use of kiwi saver to invest while paying off mortgage gradually.
Yes not hard to get to 10% floating ..think it is coming early next year .. for the first time ever I fixed a loan for 5yrs 5.99% ... for the last 15yrs+ always been 1-2yr fixed
I do have another loan coming off early next year ... but hopefully, I'll be paying that one off or at least reduced by a good chunk..

[Daytr]

A curse on you is surely coming soon, like who would suggest a SP that has had a 4-500% increase in a short while, and recently a 25% selloff, despite the pumping, would be in the sights of the short sellers? They must be morons.

You obviously don't get it that AI is the future, Nvidia also owns AI, they're the sole beneficiary of AI, and their earnings will outmatch any of the big five who've invested billions into AI, for 105 years at least, 105 PE is irrelevant as earnings will catch up and overtake PE (105 years for earnings to catch up with price).

What a great investment right now. Uh, yeah, ok, listening not listening. Short it? What moron would suggest that?

Brilliant impersonation!

[Mafman]

Brilliant impersonation!
Love it! A perfect take off.

[Azz]

Hey Azz turns out Chris Bloomstran has a short position on Nvidia...

What would your rebuttal be to what Chris Bloomstran has to say about Nvidia in this clip (https://www.youtube.com/watch?v=kM8Z7cWtKV4&t)? Watch between 1:03:14 to 1:06:43.

Let's see what the next quarterly brings, and then the fiscal year, etc. And the more short interest the better: they will be squeezed like crazy!

[Azz]

A curse on you is surely coming soon, like who would suggest a SP that has had a 4-500% increase in a short while, and recently a 25% selloff, despite the pumping, would be in the sights of the short sellers? They must be morons.

You obviously don't get it that AI is the future, Nvidia also owns AI, they're the sole beneficiary of AI, and their earnings will outmatch any of the big five who've invested billions into AI, for 105 years at least, 105 PE is irrelevant as earnings will catch up and overtake PE (105 years for earnings to catch up with price).

What a great investment right now. Uh, yeah, ok, listening not listening. Short it? What moron would suggest that?

It's amazing what jealousy does to the mind.

[Azz]

Brilliant impersonation!

Go on then: short Nvidia, and do it big. Bet you don't...

[Azz]

Love it! A perfect take off.

Put your money where your mouth is: short Nvidia, and do it big. Bet you don't...

[Valuegrowth]

Investors are dumping Japanese stocks. Winners are those who have invested in market winners back by fudementals.

[causecelebre]

Investors are dumping Japanese stocks. Winners are those who have invested in market winners back by fudementals.

As a technical analyst i'd the other side to that argument.

[Valuegrowth]

https://www.youtube.com/watch?v=-yLl-IBl_zo

[SailorRob]

You would have to be a real moron to short NVDA or even to be bearish in any way on this company.

Being a chip manufacturer, margins will expand to at least double where they are today and they will be able to grow revenue easily at 20% a year for the next decade, and they won't require much capital to do so. Nor will they come under attack from anyone or anywhere as they are the only company that can do AI, nobody else even knows what it is. This is NOT a boom bust industry.

Take your current revenue of 30 billion and grow it at 20% for the next decade (lots of companies have done this before not that hard) and then while this is happening double your margins (very simple to do in this industry) and you end up in 2033 with revenue of 220 Billion and a 40% margin sees you with 88 billion net income, then of course after all this you will capitalise at 30 times those earnings for a company worth 2.6 trillion. This will give you a 9% return.

A 9% return for a company growing earnings at 20% a year for a decade and doubling margins and not spending any capital . Simple stuff folks...

Microsoft, Cisco, Intel, IBM, America Online, Oracle, Dell, Sun Micro systems, Qualcomm, Hewlett Packard.

[Gunner]

You would have to be a real moron to short NVDA or even to be bearish in any way on this company.

Being a chip manufacturer, margins will expand to at least double where they are today and they will be able to grow revenue easily at 20% a year for the next decade, and they won't require much capital to do so. Nor will they come under attack from anyone or anywhere as they are the only company that can do AI, nobody else even knows what it is. This is NOT a boom bust industry.

Take your current revenue of 30 billion and grow it at 20% for the next decade (lots of companies have done this before not that hard) and then while this is happening double your margins (very simple to do in this industry) and you end up in 2033 with revenue of 220 Billion and a 40% margin sees you with 88 billion net income, then of course after all this you will capitalise at 30 times those earnings for a company worth 2.6 trillion. This will give you a 9% return.

A 9% return for a company growing earnings at 20% a year for a decade and doubling margins and not spending any capital . Simple stuff folks...

Microsoft, Cisco, Intel, IBM, America Online, Oracle, Dell, Sun Micro systems, Qualcomm, Hewlett Packard.

The company is not the stock price. You confuse the two.

[winner69]

Us going to shutdown they say

Hope investors don’t panic

[Azz]

You would have to be a real moron to short NVDA or even to be bearish in any way on this company.

Being a chip manufacturer, margins will expand to at least double where they are today and they will be able to grow revenue easily at 20% a year for the next decade, and they won't require much capital to do so. Nor will they come under attack from anyone or anywhere as they are the only company that can do AI, nobody else even knows what it is. This is NOT a boom bust industry.

Take your current revenue of 30 billion and grow it at 20% for the next decade (lots of companies have done this before not that hard) and then while this is happening double your margins (very simple to do in this industry) and you end up in 2033 with revenue of 220 Billion and a 40% margin sees you with 88 billion net income, then of course after all this you will capitalise at 30 times those earnings for a company worth 2.6 trillion. This will give you a 9% return.

A 9% return for a company growing earnings at 20% a year for a decade and doubling margins and not spending any capital . Simple stuff folks...

Microsoft, Cisco, Intel, IBM, America Online, Oracle, Dell, Sun Micro systems, Qualcomm, Hewlett Packard.

Welcome back, SailorRob.

[Azz]

The company is not the stock price. You confuse the two.

Oh my Lord, give me strength!

[SailorRob]

The company is not the stock price. You confuse the two.

In the short term, yes the company is not the stock price.

I was not talking about the short term.

Many things confuse me, this isn't one.

[Gunner]

Oh my Lord, give me strength!

That is a great boomer saying. The stock is still not the company.

[Azz]

That is a great boomer saying. The stock is still not the company.

Who's a boomer? Not me.

The stock price of Nvidia is way too low. The company is massively undervalued, which will be corrected very soon I think.

[SailorRob]

Who's a boomer? Not me.

The stock price of Nvidia is way too low. The company is massively undervalued, which will be corrected very soon I think.

Exactly, 1.1 trillion cap with a price to sales of only 30, lots of companies have done well from low valuations like this.

[SailorRob]

AZZ perhaps you'd like to help these folk with poor basic numerical literacy, and let us know your estimates for revenue and net margin in 2030 and how much capital will be required to obtain these numbers.

[ValueNZ]

Who's a boomer? Not me.

The stock price of Nvidia is way too low. The company is massively undervalued, which will be corrected very soon I think.

You're living in a fantasy world; a world where your SUBJECTIVE share price differs from the actual share price. You're gonna go broke.
What is this doublethink BS

[Azz]

What is this doublethink BS

You still don't get it: I am predicting that the Nvidia share price will go up, and up!

[ValueNZ]

You still don't get it: I am predicting that the Nvidia share price will go up, and up!
Yes but you told me yesterday I would go broke because I believe that value and price are two different constructs, but here you are calling nivida undervalued. So which is it, can intrinsic value differ from price or not?

[Valuegrowth]

Still some tech stocks are bucking the trend. I don t think Intelligent investors and market winners will panic because they have identified and invested in solid companies after doing homework before others. As usual all types of other players will panic time to time. They are new normal. We saw panic situations in the past and We are going to see them again and again. That's why I invest in cash rich, low debt strong balance sheet companies. In the long run they become multi baggers. As I said I prefer to stay sidelines until market come to the attractive levels and exception is very attractive neglected strong balance sheet companies having low debt or zero debt and promising outlook.


Us going to shutdown they say

Hope investors don’t panic

[Azz]

Yes but you told me yesterday I would go broke because I believe that value and price are two different constructs, but here you are calling nivida undervalued. So which is it, can intrinsic value differ from price or not?

By "don't get it", I really mean that lol. You are ignoring what the company actually does, and its position within its market. Nvidia is the leader in the most incredible market ever known, and this market has only been commercialized very recently - it's the beginning of the beginning for A.I.

[Valuegrowth]

https://www.youtube.com/watch?v=8Y0SY6OoKV8

[ValueNZ]

By "don't get it", I really mean that lol. You are ignoring what the company actually does, and its position within its market. Nvidia is the leader in the most incredible market ever known, and this market has only been commercialized very recently - it's the beginning of the beginning for A.I.
You refused to answer my question and have shown to everyone here a belief in contradictory views.

Anyway I'm more interested in what you have to say in response to SailorRob in terms of revenue and margin estimates in the future.

[SailorRob]

You still don't get it: I am predicting that the Nvidia share price will go up, and up!

This is not a prediction, it's an obvious fact.

I'd like to add another up though.

Up and up and UPPPP.

And up.

The math is irrefutable.

[Valuegrowth]

https://www.youtube.com/watch?v=add0L_JckF0

[SailorRob]

The beginning of the beginning of AI. So obvious it's hard to fathom even boomers who don't get this.

It's like the year 2000 for the Internet, the beginning of the beginning of a massive new industry that took over the world.

But this is even bigger.

[Azz]

AZZ perhaps you'd like to help these folk with poor basic numerical literacy, and let us know your estimates for revenue and net margin in 2030 and how much capital will be required to obtain these numbers.

There are problems (good problems to have) with supply. The demand is so hot that they're actually sold out and a lot of work is being done to meet this demand. It actually makes quarterly reporting incredible because any product not shipped due to a supply issue in a quarter means when it's made it just hits the next quarter! I've never seen anything like it. There could be shares issued by the company, it's been talked about. But really there's so much cash coming in, a spend-up can be done just from that. And the fab plants in US they're (TSMC) trying to build are delayed because the US workforce is too stoned and useless and lazy, they can't find decent workers lol. 2030 is too far away to talk actual numbers; my instinct is that it will become the biggest company in the world.

[Gunner]

There are problems (good problems to have) with supply. The demand is so hot that they're actually sold out and a lot of work is being done to meet this demand. It actually makes quarterly reporting incredible because any product not shipped due to a supply issue in a quarter means when it's made it just hits the next quarter! I've never seen anything like it. There could be shares issued by the company, it's been talked about. But really there's so much cash coming in, a spend-up can be done just from that. And the fab plants in US they're trying to build are delayed because the US workforce is too stoned and useless and lazy, they can't find decent workers lol. 2030 is too far away to talk actual numbers; my instinct is that it will become the biggest company in the world.

If in doubt, rely on instinct. The words of all great investors.

[ValueNZ]

There are a couple of problems (good problems to have) with supply. The demand is so hot that they're actually sold out and a lot of work is being done to meet this demand. It actually makes quarterly reporting incredible because any product not shipped due to a supply issue in a quarter means when it's made it just hits the next quarter! I've never seen anything like it. There could be shares issued by the company, it's been talked about. But really there's so much cash coming in, a spend-up can be done just from that. And the fab plants in US they're trying to build are delayed because the US workforce is too stoned and useless and lazy, they can't find decent workers lol. 2030 is too far away to talk actual numbers; my instinct is that it will become the biggest company in the world.
If only there was an economic term for when quantity demanded exceeds quantity supplied... Azz it's called a shortage and how have you not heard of it before.

2030 is only 7 years away and absurd growth assumptions have been priced into the stock, even if you cannot put numbers to it. You will get screwed if you hold this stock.

[Azz]

If in doubt, rely on instinct. The words of all great investors.

I have no doubt at all. I just cannot predict into the year 2030. Maybe you can.

[Azz]

If only there was an economic term for when quantity demanded exceeds quantity supplied... Azz it's called a shortage and how have you not heard of it before.

2030 is only 7 years away and absurd growth assumptions have been priced into the stock, even if you cannot put numbers to it. You will get screwed if you hold this stock.

It's a shortage where Nvidia owns the market - AND SO THEREFORE CUSTOMERS WAIT.

[Gunner]

Only you mentioned 2030. Your instinct guides you

[Azz]

You refused to answer my question and have shown to everyone here a belief in contradictory views.

Anyway I'm more interested in what you have to say in response to SailorRob in terms of revenue and margin estimates in the future.

You are incredibly naive. I did answer your question. You just don't understand.

[Azz]

Only you mentioned 2030. Your instinct guides you

That was in reply to Sailor. He can look into the future, and he actually bases it on something. But I cannot for Nvidia.

[Azz]

You will get screwed if you hold this stock.

The beauty of the share market is, we will find out, won't we!

[Gunner]

That was in reply to Sailor. He can look into the future, and he actually bases it on something. But I cannot for Nvidia.

I see


Lol

[Azz]

Yes but you told me yesterday I would go broke because I believe that value and price are two different constructs, but here you are calling nivida undervalued. So which is it, can intrinsic value differ from price or not?

You think you're Warren Buffett, but "value" is only a small part of what Mr Buffett does - he buys Preferred stock, and he get seats on the Board. He's protected from downside if everything goes bad by being first in line over the common folk who have to buy common stock. And he always becomes an actual insider to the companies he buys into, with direct or proxy representation on boards. It's a complete myth that he "value" invests; it's a complete myth that you are doing what he does. You're just stock-picking, and saying Company X that you like has higher "intrinsic" value than the share price - but you're just another punter.

[Azz]

I see


Lol

Short Nvidia. Put your money where your mouth is.

[Valuegrowth]

https://www.agweb.com/markets/market-analysis/grain-and-livestock-futures-mostly-lower-funds-sell-risk-outside-markets

Grain and Livestock Futures Mostly Lower: Funds Sell with Risk Off Outside Markets, Possible Govt. Shutdown

[Azz]

The beginning of the beginning of AI. So obvious it's hard to fathom even boomers who don't get this.

It's like the year 2000 for the Internet, the beginning of the beginning of a massive new industry that took over the world.

But this is even bigger.

"But this is even bigger."

It is. Another way of looking at it: these incredible chipsets from Nvidia and their A.I. software (and A.I. software from other companies too) are like MS-DOS computer graphics from the 1980s.

[Azz]

This is not a prediction, it's an obvious fact.

I'd like to add another up though.

Up and up and UPPPP.

And up.

The math is irrefutable.

Your math is pretty good (and stated on this thread), much better than mine!

[Valuegrowth]

Some of the biggest tech winners in 2010. Which ones are doing well even now?

https://www.businessinsider.com/best-of-tech-2010-2010-12
15 Biggest Tech Winners In 2010
(https://www.businessinsider.com/best-of-tech-2010-2010-12)
https://vocal.media/01/biggest-tech-failures-of-all-time
Biggest Tech Failures of All Time

Wich tech will lead in the comkng decade? Which teck will fail in the coming decade .Thanks.

[Azz]

https://www.agweb.com/markets/market-analysis/grain-and-livestock-futures-mostly-lower-funds-sell-risk-outside-markets

Grain and Livestock Futures Mostly Lower: Funds Sell with Risk Off Outside Markets, Possible Govt. Shutdown

Valuegrowth, just want to say thanks for you posting articles, videos, etc.

[ValueNZ]

You think you're Warren Buffett, but "value" is only a small part of what Mr Buffett does - he buys Preferred stock, and he get seats on the Board. He's protected from downside if everything goes bad by being first in line over the common folk who have to buy common stock. And he always becomes an actual insider to the companies he buys into, with direct or proxy representation on boards. It's a complete myth that he "value" invests; it's a complete myth that you are doing what he does. You're just stock-picking, and saying Company X that you like has higher "intrinsic" value than the share price - but you're just another punter.

Buffett is the worlds best capital allocator without a question, which is why I strive to mimic his investing style. If I am half as good as he has been and manage a 5% edge over the SP500 in my life with no total loss of capital events then I will be extremely wealthy.

Let's say that's true, Buffett only buys preferred stock (WTH?) and trades on inside information, how do you think Buffett started? Buffett's returns in the partnership day's were far superior since he was working with small sums of capital initially. I wouldn't comment on how Buffett chooses to invest if I were you - you clearly have no clue.

[Azz]

Buffett is the worlds best capital allocator without a question, which is why I strive to mimic his investing style. If I am half as good as he has been and manage a 5% edge over the SP500 in my life with no total loss of capital events then I will be extremely wealthy.

Let's say that's true, Buffett only buys preferred stock (WTH?) and trades on inside information, how do you think Buffett started? Buffett's returns in the partnership day's were far superior since he was working with small sums of capital initially. I wouldn't comment on how Buffett chooses to invest - you clearly have no clue.

He started out by being the best, prior to, and moving into, decades of massive stock boom. Today is a very different beast from when he started out. It's like you're using the best wooden tennis racket, and thinking that will help make you a great tennis player.

[ValueNZ]

He started out by being the best, prior to, and moving into, decades of massive stock boom. Today is a very different beast from when he started out. It's like you're using the best wooden tennis racket, and thinking that will help make you a great tennis player.
This is the last comment I'll make on this because frankly you can't help throwing insults instead of debating ideas.

Buffett's best years in the partnership days were ones of stock market decline, it is far harder to find cheap securities in a speculative boom than when everything is dropping in price. The best case scenario for me is a long depression where most securities are going for pennies on the dollar, after all I'll likely be a net buyer of stocks for decades. You'll struggle to understand that I'm sure.

I don't understand your tennis racket analogy.

[Azz]

This is the last comment I'll make on this because frankly you can't help throwing insults instead of debating ideas.

Buffett's best years in the partnership days were ones of stock market decline, it is far harder to find cheap securities in a speculative boom than when everything is dropping in price. The best case scenario for me is a long depression where most securities are going for pennies on the dollar, after all I'll likely be a net buyer of stocks for decades. You'll struggle to understand that I'm sure.

I don't understand your tennis racket analogy.

You're a stock picker, nothing else. But the way you're picking stocks is not appropriate for today's market. You're using a system (the wooden tennis racket) that is out of date. You do have the BEST wooden tennis racket, however: Buffett's but with common stock and no insiders to help manage after the purchase.

[Valuegrowth]

Thanks Azz. On Monday we may see some kind of panic situation in Asian markets. They will highlight some reasons to sell stocks. This time it’s a shutdown. I am prepared for those types of market attacks as I don’t buy market losers or weak balance sheets with mountain of debt. Good luck for your investment.


Valuegrowth, just want to say thanks for you posting articles, videos, etc.

[Valuegrowth]

https://tech.co/news/worried-regulation-buy-now-pay-later-tech
9 Reasons to Worry About the Rise of “Buy Now Pay Later” Tech

"Here's the list of nine problematic BNPL provider practices to address, according to Chien:



Wide variance and poor transparency in pricing structures
Multiple and excessive fees
Automatic repayments and use of credit cards for repayment
Limited assessment of repayment capacity
Inconsistent credit reporting
Exploitation of behavioral biases
Data harvesting and data privacy
Challenges with returns


In other words, we're on track as a society to continue putting off our bills even further into the future.

In a world where potential catestrophy lurks around those future corners, that's not great news. You might be safe from that tropical storm in California or the Maui wildfires, but sooner or later, you'll face your own potential climate disaster.

Adding a bunch of bills to your budget isn't the best preparation — even if they're all really tiny."

[Azz]

Thanks Azz. On Monday we may see some kind of panic situation in Asian markets.

That's all we need lol....


They will highlight some reasons to sell stocks. This time it’s a shutdown. I am prepared for those types of market attacks as I don’t buy market losers or weak balance sheets with mountain of debt. Good luck for your investment.

Good stuff; only weak balance sheets I have are tiny gold miners lol (two stocks, in my "high risk" portion). And, Thanks!

[SailorRob]

There are problems (good problems to have) with supply. The demand is so hot that they're actually sold out and a lot of work is being done to meet this demand. It actually makes quarterly reporting incredible because any product not shipped due to a supply issue in a quarter means when it's made it just hits the next quarter! I've never seen anything like it. There could be shares issued by the company, it's been talked about. But really there's so much cash coming in, a spend-up can be done just from that. And the fab plants in US they're (TSMC) trying to build are delayed because the US workforce is too stoned and useless and lazy, they can't find decent workers lol. 2030 is too far away to talk actual numbers; my instinct is that it will become the biggest company in the world.

Biggest company in what, market cap, revenue, net income, assets?

[Azz]

Biggest company in what, market cap, revenue, net income, assets?

Good question. I meant market cap.

[Azz]

I meant market cap.

A lot of this is determined on who grabs the "middle ground" of AI, and how it's grabbed. Middle ground I see as entire corporate functions swapped-out for plug-ins at a datacentre (ie, A.I. for rent). So far, Nvidia is leading in this area, but there will be competition (though most of that competition will be using Nvidia hardware!).

[Azz]

A lot of this is determined on who grabs the "middle ground" of AI, and how it's grabbed. Middle ground I see as entire corporate functions swapped-out for plug-ins at a datacentre (ie, A.I. for rent). So far, Nvidia is leading in this area, but there will be competition (though most of that competition will be using Nvidia hardware!).

Let's move Nvidia talk to the Nvidia forum. :-)

[Valuegrowth]

Business challenges faced by weak companies:


Softening global conditions
Uncertain outlook
Inflationary pressures
High cost of doing business
Rising rates

Under this environment cash rich, strong balance sheets companies not only will become strong competitors but also will carry out their acquisition spree.


That's all we need lol....



Good stuff; only weak balance sheets I have are tiny gold miners lol (two stocks, in my "high risk" portion). And, Thanks!

[Azz]

Business challenges faced by weak companies:


Softening global conditions
Uncertain outlook
Inflationary pressures
High cost of doing business
Rising rates

Under this environment cash rich, strong balance sheets companies not only will become strong competitors but also will carry out their acquisition spree.

This is interesting: two similar companies (TWG much bigger by sales, however), two opposite results:
(quickly copy and pasted from stuff.co.nz)

---------------
Clothing retailer Hallenstein Glasson reported a 25% lift in profit last year but warned sales had softened this year as cost-of-living pressures impacted spending. The retailer, which owns the Hallenstein Brothers and Glassons clothing chains, said profit in the year to August 1 increased to $32 million from $25.6m the previous year which was impacted by Covid-19 lockdowns. The result is in line with its forecast for profit of $31.8m to $32.3m. Sales increased 17% to $409.7m, with Glassons New Zealand sales up 7.7% to $112m, Glassons Australia sales up 22% to $191m, and Hallenstein Brothers sales across both countries up 18% to $106m
---------------
The Warehouse Group’s annual profit has fallen over 66% in what the retailer has called a "disappointing" result following a challenging year.The company behind The Warehouse, Warehouse Stationery, Noel Leeming, and Torpedo7 posted a $29.8 million profit in the year to July 30, down from $87m the previous year. Sales rose 3.2% to $3.4 billion
---------------

[Valuegrowth]

Curent low unemployment rate is one plus factor for businesses. Those who generated Wealth from housing and stock market boom over the last 10 years is also creating demand for travel, food,clothes and other stuff. Any significant wealth destruction and high unemployment rate could lead to next crisis. It can come at any time just like tsunami when we are least expected. I am going to be fearful in 2024/25.

This is interesting: two similar companies (TWG much bigger by sales, however), two opposite results:
(quickly copy and pasted from stuff.co.nz)

---------------
Clothing retailer Hallenstein Glasson reported a 25% lift in profit last year but warned sales had softened this year as cost-of-living pressures impacted spending. The retailer, which owns the Hallenstein Brothers and Glassons clothing chains, said profit in the year to August 1 increased to $32 million from $25.6m the previous year which was impacted by Covid-19 lockdowns. The result is in line with its forecast for profit of $31.8m to $32.3m. Sales increased 17% to $409.7m, with Glassons New Zealand sales up 7.7% to $112m, Glassons Australia sales up 22% to $191m, and Hallenstein Brothers sales across both countries up 18% to $106m
---------------
The Warehouse Group’s annual profit has fallen over 66% in what the retailer has called a "disappointing" result following a challenging year.The company behind The Warehouse, Warehouse Stationery, Noel Leeming, and Torpedo7 posted a $29.8 million profit in the year to July 30, down from $87m the previous year. Sales rose 3.2% to $3.4 billion
---------------

[Toddy]

US Government is open for business on Monday.

[beacon]

US Government is open for business on Monday.

Annual debt ceiling negotiations are now a recurring political show every year with similar outcomes, so not much to see there - in terms of meaningful or sustainable impact on markets, I think.

Rising China Taiwan attrition, Higher USD, anti-trust cases, decreasing personal US savings and increasing FFR should, however, grind down SPX500 in the next few quarters, even if US remains a low volatility market in this period. Here's an insightful listen on closer-than-you-think China's War timeline, for those who can spare the time https://www.youtube.com/watch?v=98kMSEkPiLo

[Fortunecookie]

The 1st of the month. To capture the mood of the nation, a bit of Bone Thug is in order.

In other news, apparently in the US 80% of mortgage holders have interest rates under 5%.
In terms of how the loans are structured I do not know. A big difference when a household is paying 5% or less vs 7%+ interest rates.

[moka]

https://www.youtube.com/watch?v=wp0LQOX7Ppc
(https://www.youtube.com/watch?v=wp0LQOX7Ppc)
Stocks To Surge & Bonds To Sell Off Before Recession Hits By Early 2024 | Market Analyst Darius Dale. Sep 22, 2023

0:35 While the FED has succeeded in bringing inflation as measured by headline CPI down from nine percent to under four percent it hasn't won the battle yet. In fact CPI has been rising over the past several months. Today's expert cautions that we're likely to see an unwelcome transition from what he calls immaculate disinflation to sticky inflation which could serve as the death nail for the current bull run in the markets.

https://edition.cnn.com/2023/09/06/economy/immaculate-disinflation-meaning/index.html
Immaculate disinflation is being used to describe a scenario where inflation cools without causing a spike in unemployment.
https://deflation.com/expert-commentary/the-immaculate-disinflation/
Immaculate Disinflation is being used by many to describe the fact that consumer price inflation is slowing down (disinflating) but the economy is remaining buoyant, particularly the labor market.

2:00 Darius what's your current assessment of the global economy in financial markets?
I think one of divergence between places where we're continuing to see above trend growth and inflation like us and Japan, to economies where we're starting to see below trend growth namely China and Europe and that divergence has had a pretty material impact as it relates to the global currency market. The global currency market is a pretty big input to global liquidity matrix and so ultimately we do believe those set divergences are likely to persist and they're obviously going to continue to have impacts for asset markets over the medium term.

2:48 You said we're going to transition from immaculate disinflation as a market narrative to sticky inflation in the coming months and that could be the death nail for this bull market but we're not there yet.

4:10 There's 10 reasons why the US economy has been resilient and why I think we've been on the right side of pushing back against recession fears you know throughout 2023.

We still think recession's coming perhaps 2023 Q4, Q1 is kind of the modal outcome expectation there, but it's kept us on the right side of risk really throughout the year and so there's 10 factors contributing to that resilient US economy theme:

1. we've got household balance sheets that are flush with cash
2. we have corporate balance sheets that are flush with cash
3. ample liquidity has made the private sector impervious to rate hikes
4. longer longer and variable lags in this business cycle
5. we've limited credit cycle vulnerabilities,
6. we've limited exposure from the volatile manufacturing sector which tends to account for about 98% of the net job loss we came to experience in recession here in the U.S economy
7. we have a perfect storm for new housing development
8. we got bidenomics juicing the economy from a stimulus standpoint
9. immigration spiked in the last couple years
10. and then lastly we have labor hoarding which is actually charting the path to a potential credible path to soft landing although we still don't believe that's the modal outcome.

[bull....]

US Government is open for business on Monday.

us futures are indicating good open at this stage

[moka]

https://www.youtube.com/watch?v=wp0LQOX7Ppc (https://www.youtube.com/watch?v=wp0LQOX7Ppc)
Stocks To Surge & Bonds To Sell Off Before Recession Hits By Early 2024 | Market Analyst Darius Dale. Sep 22, 2023

5:21 It's been our view that as a function of the resiliency of the US economy that the immaculate disinflation which has been one half of this kind of transitory Goldilocks vibe, we’ve got this Brazilian U.S economy, we got the semantically disinflation, put those together we get transitory Goldilocks.

We knew in January when we made the call (Goldilocks) that it was eventually going to run out because ultimately the US economy is not an economy that has historically seen inflation go from significantly above trend to back to neutral trend or below trend without a recession.

· https://blog.unlimitedfunds.com/transitory-goldilocks (https://blog.unlimitedfunds.com/transitory-goldilocks)
Transitory Goldilocks? Published by Bob Elliott on Jan 11, 2023
Put together, it looks like the perfect picture of goldilocks - decent growth, secularly low unemployment, moderating wage growth and low inflation. The trouble is that this dynamic is unlikely to persist for too long.

5:53 I'll start with our Hope plus I framework. You and I talked about Michael Kantrowitz's HOPE framework last time on the program. I did some research on our own and we've arrived at similar conclusions.
But one thing I think is missing for Michael Kantrowitz's HOPE framework that we added to this discussion which is what happens to inflation in and around recession.

6:14 And so in terms of how this reinterpret this chart what I'm showing here is the median 10-year trailing 10-year delta adjusted z-score for a basket of indicators that represents each of these cycles and when we say delta adjusted that sounds fancy but what we really mean is to orient the time series so that up is good and down is bad. So you think about inverting jobless claims and things of that nature and so housing.
Z-score it's the normalized change from the mean of a time series so it's for example a minus two sigma reading is an extreme normalized change from the whatever the mean is or whatever the duration of that mean is and so what we're effectively trying to do is normalize everything so we put everything on one chart and so we can compare apples to apples. (If you understand that have a look at his charts on the video – Moka)

7:06 (HOPE = Housing, Orders, Production, Employment)

· Housing tends to break down around 18 months ahead of a recession.
· Orders, the basket of indicators that represents the order cycle center breaks down around eight to ten months out of a recession.
· Production profits tend to break down four to six months ahead of a recession.
· Employment tends to break down right on time when the recession begins which makes sense ER uses recession or employment statistics largely to date the business cycle

But what we find is that inflation tends to break down six to eight months after a recession relative to its trailing 10-year mean of time series.

We know that we've experienced a ton of disinflation thus far in this business cycle and part of it is because part of the elements of inflation were in fact transitory. You get things like used car prices, airfares etc but there's an underlying level of inflation that is likely to stop disinflating well before we get back to two percent inflation and we continue to see that as the most likely outcome.

9:08 The chart here basically shows inflation tends to be sticky through the recession and it's only once recession hits that you finally get the inflation actually breaking under control and so that's what we should expect here.

[Daytr]

us futures are indicating good open at this stage

Open for another 6 weeks at least.
US interest rates are killing the US Government as interest servicing is growing as a percentage of Government revenue

[moka]

https://www.youtube.com/watch?v=wp0LQOX7Ppc
Stocks To Surge & Bonds To Sell Off Before Recession Hits By Early 2024 | Market Analyst Darius Dale. Sep 22, 2023

9:40 We have been experiencing a significant amount of immaculate disinflation for both the services side and goods. We are now starting to see sticky inflation start to come into the picture primarily through the lens of headline inflation which has broken down much faster and sooner than the services components of inflation.

9.57 So what I'm showing this chart is headline CPI. We popped up to 3.9 percent on a three-month annualized basis in the most recent months. That was driven by a modest acceleration in food inflation at 2.4 percent but primarily driven by this big pop to 25.4 through methane wise energy inflation and this is the first time we've seen three-month annualized energy inflation in the U.S economy on a positive basis since going back to the second half of last year so that's concerning. But when you juxtapose that from core inflation and things like services inflation you know it's suggesting that we are now kind of at the vanguard of what could be a sticky inflation thing that we think will kind of be consensus amongst market participants let's say in at least three months or so.

11:14 It could be the case that if we continue to see wage pressure in the weeks and months ahead that this number could really start to move in a very adverse manner as it relates to asset markets in the FED reaction function.

11.54 In this basket of inflation indicators is about eight indicators. Wages are a part of that basket as well so we do know that wages are tend to be lagging the business cycle with respect to inflation but there's a couple of other reasons why we continue to think that wages are likely to be sticky through this process. They're likely to continue decelerating but decelerating at an above trend pace that ultimately means inflation is going to remain sticky through until we get to the other side of the recession.

12.22 So I'll give you a couple charts to kind of support that thesis. So if you look at corporate profitability what I'm showing in the spread area in this chart is our what we call our corporate profit cycle model and so that's nominal GDP gross domestic income the year of the rate of change gross domestic income and we subtract the spread between unit labor costs and productivity from that nominal gross domestic income growth and what we see is that on a structural basis is actually quite low. That spread is 177 basis points wide versus a mean a long-term average of 574 basis points wide. So we know there's a tremendous amount of margin pressure on corporate right now. So they are going to have some issues in terms of generating earnings and cash flows and as long as that margin pressure remains elevated they're going to have no choice but to pass on the price increases to their customers.

13.09 So in the blue line in this chart I'm showing private sector average hourly earnings growth on a year-over-year basis minus non-farm productivity on a year over year basis and that spread has historically been correlated to big spikes in inflation.
It's not always correlative inflation, there's times when inflation is kind of doing a whole heck of a lot of nothing, but whenever you've seen these big spikes in inflation dating back to the 70s and obviously now in the 2020s, whenever the private sector's wage growth is significantly outpacing their growth of their productivity, the goods and services that they're producing in the economy that's when corporations feel like they have to pass on producer price inflation to their customers.
And we are in fact seeing an acceleration and producer price inflation if you look at the last PPI report we popped to the 4.2 percent on a three-month annualized basis in headline PPI. It's the highest number we've seen since the middle of last year as well so we are now moving in the wrong direction for some of these leading processes of inflation in terms of causing inflation to get sticky at a level that's inconsistent with the Fed’s two percent mandate.

[winner69]

OCR needs to go up again this week ….but Orr will abide by political ‘persuasion’ and thoughts of his own future and let it stand

[mike2020]

I think it was always a given any change would be after the election. Watching CL on radio NZ this morning I think AO will be getting his CV sorted.

[Azz]

OCR needs to go up again this week ….but Orr will abide by political ‘persuasion’ and thoughts of his own future and let it stand

Unfortunately you're probably right, on both counts.

[Valuegrowth]

Still markets are resilient. Recession is getting postponed. The Calm is there before the storm.

[clip]

OCR needs to go up again this week ….but Orr will abide by political ‘persuasion’ and thoughts of his own future and let it stand

He's already been confirmed as govener for another 5 years and none of the parties are going to change that

[mike2020]

Clip. Did you watch or listen to CL talking to Hosking this morning? I say wait and see.

[clip]

Clip. Did you watch or listen to CL talking to Hosking this morning? I say wait and see.

I caught some of it while driving home from the gym, and I caught the part where hosking asked if they would get rid of Orr, and Luxon said he's on a 5 year term so no? Is what I thought I heard

[strikereureka]

AO most definitely gone before Christmas, and he will have loads of company (barring any miracles over the next two weeks).

[Daytr]

AO most definitely gone before Christmas, and he will have loads of company (barring any miracles over the next two weeks).

Really? National backed his reappointment.

[SailorRob]

Really? National backed his reappointment.

Realllly?? They had a funny way of expressing that.

[stoploss]

Really? National backed his reappointment.
Daytr, think you might have missed some of the press ????
https://www.rnz.co.nz/news/political/478300/national-shocked-by-reappointment-of-reserve-bank-governor-adrian-orr

[Daytr]

Daytr, think you might have missed some of the press ????
https://www.rnz.co.nz/news/political/478300/national-shocked-by-reappointment-of-reserve-bank-governor-adrian-orr

Thanks. Yes I did miss that.
I remember Luxon saying on RNZ that he supported the reappointment, maybe he was referring to one year not five.

[stoploss]

Thanks. Yes I did miss that.
I remember Luxon saying on RNZ that he supported the reappointment.
I think maybe you meant to say you "MIS remembered " ?
https://www.stuff.co.nz/business/300733275/national-shocked-by-adrian-orrs-reappointment-to-head-of-reserve-bank

[strikereureka]

I think maybe you meant to say you "MIS remembered " ?
https://www.stuff.co.nz/business/300733275/national-shocked-by-adrian-orrs-reappointment-to-head-of-reserve-bank

They're politicians - who say & do different/unpredictable things. [Like talking about removing public holidays etc. when the polls show they're just past the halfway mark.]

[clip]

Daytr, think you might have missed some of the press ????
https://www.rnz.co.nz/news/political/478300/national-shocked-by-reappointment-of-reserve-bank-governor-adrian-orr


This is from almost a year ago, Luxon was on RNZ today saying they didn't support his re-appointment, but he's already been re-appointed for 5 years so not planning to change that

[mike2020]

I might need to listen again because what I heard was a complete run down of the decisions made since 2020 being beyond questionable.

[Valuegrowth]

https://nz.finance.yahoo.com/news/severe-crash-coming-us-office-000003441.html

[Valuegrowth]

Treasury yeilds are surging while stocks are tanking.

[bull....]

US utilities down 5%
asx looking like an absolute bloodbath 1.5% down per futures must be thinking rba doing rate hike today ?

[RTM]

Annual debt ceiling negotiations are now a recurring political show every year with similar outcomes, so not much to see there - in terms of meaningful or sustainable impact on markets, I think.

Rising China Taiwan attrition, Higher USD, anti-trust cases, decreasing personal US savings and increasing FFR should, however, grind down SPX500 in the next few quarters, even if US remains a low volatility market in this period. Here's an insightful listen on closer-than-you-think China's War timeline, for those who can spare the time https://www.youtube.com/watch?v=98kMSEkPiLo

Thanks for the link. Worrying. I recall before the Ukraine invasion the USA saying the signs were very clear that it was going to happen. Seems to be the same here. I remember thinking it would be over in a week or two. Very wrong.

I wonder what the outcome will be in Taiwan ?

[bull....]

10-year and 30-year Treasury yields rise to their highest levels since 2007
https://www.cnbc.com/2023/10/03/us-treasury-yields-investors-weigh-economic-outlook.html


going over 5% :scared: stocks down more 4200 test coming up

[Valuegrowth]

Job market is still hot. The final stage in the longest bull market for all types of extremely over valued assets. History can repeat in a different manner. What happened in the past will happen again and again in a different manner.

[bull....]

Job market is still hot. The final stage in the longest bull market for all types of extremely over valued assets. History can repeat in a different manner. What happened in the past will happen again and again in a different manner.

the catalyst for todays savaging , although plenty of bad news came out yesterday setting the scene for today's action. as well a technical setup's

[Daytr]

I found it interesting that gold hit a potential triple bottom overnight and bounced.
Gold has been hammered in recent weeks down around 10%.
The cost of carry has been hurting gold and that's not going away, however I also think there would have been selling to fund margin calls in the equity markets.

If gold doesn't hold here then next major support looks like $1620ish.

[winner69]

the catalyst for todays savaging , although plenty of bad news came out yesterday setting the scene for today's action. as well a technical setup's

Jeez SPX down 1.5% …but on way back up

Didn’t get to 4200 …that’s good

[Valuegrowth]

GOLD nay drop to $ 1000. It's not going to escape. QUOTE=Daytr;1024356]I found it interesting that gold hit a potential triple bottom overnight and bounced.
Gold has been hammered in recent weeks down around 10%.
The cost of carry has been hurting gold and that's not going away, however I also think there would have been selling to fund margin calls in the equity markets.

If gold doesn't hold here then next major support looks like $1620ish.[/QUOTE]

[Daytr]

[QUOTE=Valuegrowth;1024358]GOLD nay drop to $ 1000. It's not going to escape.

What makes you think that?

[Joshuatree]

Good question. I meant market cap.
Hey Azz, there will be competitors clammering to fill the gap,compete it's a natural law.Have you researched who the contenders will be even if they're not up to speed yet?

[Azz]

Hey Azz, there will be competitors clammering to fill the gap,compete it's a natural law.Have you researched who the contenders will be even if they're not up to speed yet?

They have to make their own chips. A lot of the A.I. "competitors" so far are using the Nvidia hardware backbone. Amazon, for example, is going all-in with A.I.; they use Nvidia chips, but moving forward intend to design and make their own, at least for a portion of their A.I. software; of note, is these Amazon chips are not as powerful as Nvidia's.

[whatsup]

Reminds me of what one of the Chase Corp fish heads said after the 87 crash , The market is well and truly -ucked , does the same apply now ! ?

[SailorRob]

Jeez SPX down 1.5% …but on way back up

Didn’t get to 4200 …that’s good

Good?? Why, are you 90?

[bull....]

Jeez SPX down 1.5% …but on way back up

Didn’t get to 4200 …that’s good

just had me nap and been for a walk , looks like tonight maybe ( but who really knows ) might get a test maybe
futures heading that way at moment

just catching up with local news see the RBNZ said they have listened to us winner and might need to raise rates to 6%

https://www.newshub.co.nz/home/money/2023/10/ocr-reserve-bank-holds-rates-at-5-5-percent-for-fourth-consecutive-meeting.html

[Daytr]

Reminds me of what one of the Chase Corp fish heads said after the 87 crash , The market is well and truly -ucked , does the same apply now ! ?

I think this very different to 87 or 2008 for that matter. I.e valuations aren't nearly as high as they were then. Fundamentals are actually quite strong & if it wasn't for inflation the markets would be in an upward trajectory.

The big change is obviously interest rates particularly in the Northern Hemisphere where they had near zero rates for significant periods of time & QE increasing credit liquidity.

Now you have a squeeze on liquidity and cost of funds is up something like 400% I.e from 1.5% to now 6ish%.
So markets don't have a free put anymore.

Some mega caps are sitting on huge amounts of cash do they will get some benefit from higher interest rates, although consumer demand should be reigned in.

Overall I see markets still heading lower.
US indices are roughly down 10% give or take.
I could potentially see them losing another 10% but I don't see them going much lower than that and perhaps not even that much.
Subject to not seeing something from left field.

[Valuegrowth]

Other markets are following Wall Street. Still there could be one last hurrah before the big sell-off.

[SailorRob]

I think this very different to 87 or 2008 for that matter. I.e valuations aren't nearly as high as they were then. Fundamentals are actually quite strong & if it wasn't for inflation the markets would be in an upward trajectory.

The big change is obviously interest rates particularly in the Northern Hemisphere where they had near zero rates for significant periods of time & QE increasing credit liquidity.

Now you have a squeeze on liquidity and cost of funds is up something like 400% I.e from 1.5% to now 6ish%.
So markets don't have a free put anymore.

Some mega caps are sitting on huge amounts of cash do they will get some benefit from higher interest rates, although consumer demand should be reigned in.

Overall I see markets still heading lower.
US indices are roughly down 10% give or take.
I could potentially see them losing another 10% but I don't see them going much lower than that and perhaps not even that much.
Subject to not seeing something from left field.

Good post but take 10 companies out of the 4000 that make up US indexes and vastly different story. Massive swathes of the market are trading well below Covid lows.

Massive opportunity out there.

[ValueNZ]

Good post but take 10 companies out of the 4000 that make up US indexes and vastly different story. Massive swathes of the market are trading well below Covid lows.

Massive opportunity out there.
Yeah agreed. If you get the chance let me know what you think of Jackson Financial, the stock looks very cheap to me. 2.7 non-GAAP Forward P/E, 7% dividend and nearly 20% of the stock bought back over the last couple years.

I created a thread on the US markets sub-forum if you (or any other poster) want to discuss it.

[Daytr]

Good post but take 10 companies out of the 4000 that make up US indexes and vastly different story. Massive swathes of the market are trading well below Covid lows.

Massive opportunity out there.

Sure but those opportunities might get better in the short term.

Any stocks in particular you are looking at displaying good value?

[Valuegrowth]

https://www.youtube.com/watch?v=0lvDojeFL-I

https://www.youtube.com/watch?v=0lvDojeFL-I

[Valuegrowth]

https://markets.businessinsider.com/news/stocks/stock-market-most-overvalued-since-dot-com-bubble-crash-indicator-2023-9

[Valuegrowth]

https://www.youtube.com/watch?v=aanwMfrSjP0&t=5023s

[moka]

https://www.youtube.com/watch?v=wp0LQOX7Ppc
Stocks To Surge & Bonds To Sell Off Before Recession Hits By Early 2024 | Market Analyst Darius Dale. Sep 22, 2023

15:16 If you look at corporate profits as a percentage of GDP now versus past decades they're much higher now. and there's a lot of padding inside corporate profits right now where they could absorb a lot of the increase in wages right without having to pass it on to the customer.
Corporate America has really gotten a really good deal and they've really had all the bargaining power or all the market power here and labor has really been squeezed. And the pendulum might be swinging back here now where labor is going to demand a fair share and the consumer is not necessarily going to be able to take that on with higher prices. I don't think corporates are going to willingly take the pain (of tightening their belts.)

So we are very much in the camp that labor has bargaining power in this business cycle and that's very clearly evident by sort of the spread between labor demand and labor supply.

17:14 There's a lot more cash circulating around the economy to demand goods and services but we don't have as many people to create those goods and services and you can see that reflected in terms of labor demand versus labor supply.

So by the way this is the credible path to a soft landing that Powell outlined in May or March of last year when they first started hiking which is we're going to take some pressure out of the labor market through the lens of JOLTS down here we're going to hopefully keep the employment growth continuing to grow and that's been exactly what's happened thus far.

Ultimately we still believe that there's probably going to come a period of time where corporates feel a lot of pressure to shed some labor, shed some fat from their business operating expenses.

19:01 The reason we say that is because when you look at projected sales and earnings growth particularly on the earnings growth side, this is the Russell 3000 index so it's the broadest measure of corporate, of public companies that we have in terms of indices here in the US economy and we're effectively projected to go from down five percent which is the most recent quarter respectively going from down five percent to up like 15 to 20 percent in the span of the next 24 months.

19:29 So there's a hockey stick recovery expected in terms of corporate profitability but there's not necessarily a real credible path to getting there in terms of growth likely slowing, inflation maybe stabilizing in a bad way in terms of cost push inflation back on producer price or balance sheets as opposed to being able to push price to consumers.

This is a great chart uh showing these lofty estimates. Those forecasts there may not materialize the way that the analysts are expecting them.

20:43 We do believe the 10-year three-month treasury yield curve is the best leading indicator for yield curve. It's predicted eight of the last eight recessions and as far back as we have data it's only got one miss in terms of missing in the mid 1960s.

21:53 So we know that based on this the data of the inversion from October of 2022 we know that a recession is the highest probability of commencing of starting sometime between November 2023 through April 2024.

25:44 All I know is the interval that has the highest probability of seeing a recession commence is sometime between November 1st of 2023 and April 30th of 2024 and I happen to believe it's going to be closer to the latter end of that particular cycle. But we don't have to guess, we have plenty of statistics that we can analyze on a consistent basis day after day week after week month after month to give us an indication.

42:27 I'm still bullish because the markets are telling me to be bullish irrespective of that expectation for recession to come in sometime between November and April. The recession may not commence sometime between November and April remember that's a forecast.

[moka]

https://www.youtube.com/watch?v=wp0LQOX7Ppc
Stocks To Surge & Bonds To Sell Off Before Recession Hits By Early 2024 | Market Analyst Darius Dale. Sep 22, 2023

47:00 Navigating the deepening fourth turning crisis over the next decade will be the greatest challenge we face in our lifetime as investors. The fourth turning is basically a period in society usually measured in 20ish years or so where the status quo falls apart and is replaced by a new cycle.

49:26 There's a lot of bad stuff's going to happen but I think you have to be extremely bullish because of it and the reason you have to be extremely bullish because one of the key takeaways from this deep dive analysis of empirical evidence taking data back to the 1800s and trying to understand how these cycles have evolved throughout fourth turnings and relative to the baseline of non-fourth turnings. And one of the key conclusions of that that deep dive study is that government's going to get a lot bigger, like a lot bigger way bigger than the CBO (Congressional Budget Office) thinks way bigger than Stan Druckenmiller thinks way, way bigger. And as a function of the how much bigger the government's going to get we are going to struggle to capitalize the fiscal coffers of the United States of America if we don't see some change in Fed policy or see some change in regulatory policy.

We do believe those are very high probabilities investors should expect financial repression.

We're probably looking for something that looks like a permanent move towards yield curve control and just permanent large scale asset purchase programs by the Federal Reserve in my opinion. You're talking about Venezuela, you're talking about Argentina, you're talking about Turkey, Zimbabwe there's so many historical corollaries of what happens to stock markets, to currency markets, to fixed income markets when you cross the point of no return from the perspective of burgeoning public debts and public deficits and we are very much headed towards that in terms of the key conclusions of that analysis. The U.S will do aggressive yield curve control on its debt and basically sacrificing the purchasing power of its currency in the process. They have no choice, we have no choice, this is all part and parcel of the fourth turning.

55:16 I think you got to be extremely bullish on stocks, you got to be extremely bullish on bitcoin heading into this fourth turning and a lot of folks will see this presentation and think the opposite is true until they realize Uncle Sam has to get his money somehow and the only relief valve, the only escape valve is ultimately they'll lever up and buy financial assets.

Equity markets tend to generally tend to move higher and nominally at least in periods of inflation. Bond investors are going to demand higher rates to compensate for that inflation.

Think about the UK gilt crisis last September in my opinion that's a precursor to what we're likely to experience as probably the one of the final catalyst to getting the Fed to get off its high horse. We are going to have to implement yield curve control at some point in this decade.

[Daytr]

Mixed messages overnight.
Oil smashed with seemingly speculative longs getting out.
Gold has held now for a couple of days at a key support level.
US markets choppy but ended net positive.
Suggests to me that there are mixed views out there on where to next.
Non farm payrolls will be key.

[ynot]

https://www.youtube.com/watch?v=aanwMfrSjP0&t=5023s
I was agreeing with most of Granthams comments, especially 1929, 2009 parallels with todays market but his spruking/ enthusiasm for green investment I'm not so sure.

[Azz]

Mixed messages overnight.
Oil smashed with seemingly speculative longs getting out.
Gold has held now for a couple of days at a key support level.
US markets choppy but ended net positive.
Suggests to me that there are mixed views out there on where to next.
Non farm payrolls will be key.

Awesome update. Really useful. Keep them coming.

[Daytr]

Awesome update. Really useful. Keep them coming.

From a troll that adds no value what so ever.
You really do have some deep seated issues & fixations you need to work out.
And its me you call a psychopath? I'm not the none doing the stalking.
As mentioned before on multiple occassions, get some help.

[Azz]

From a troll that adds no value what so ever.
You really do have some deep seated issues & fixations you need to work out.
And its me you call a psychopath? I'm not the doing the stalking.
As mentioned before, get some help.

"You're a troll...!" That's the extent of your intellectual ability.

[SailorRob]

I was agreeing with most of Granthams comments, especially 1929, 2009 parallels with todays market but his spruking/ enthusiasm for green investment I'm not so sure.

He's called all 46 of the last 2 recessions almost perfectly.

[Azz]

Daytr - I DO NOT WANT YOU TO CONTACT ME VIA THE REPUTATION SYSTEM.

[Azz]

These aggressive negative Reputation comments NEED TO STOP.

They are attempts to try and intimidate someone by sending them individual attack messages straight into their inbox.

The ability to place negative Reputation needs to be turned off for everyone. It is a being used as a system of harassment.

[Daytr]

Daytr - I DO NOT WANT YOU TO CONTACT ME VIA THE REPUTATION SYSTEM.

I'm not. Its the system that advises when you get a negative or positive reputation marking.
Stop the trolling and negativity and you will find they will stop as well.
There are consequences for your actions.

[Azz]

I'm not. Its the system that advises when you get a negative or positive reputation marking.
Stop the trolling and negativity and you will find they will stop as well.
There are consequences for your actions.

These are attacks, it's not "reputation" at all. They are negative and aggressive comments that go into an individual's inbox.

[Daytr]

These are attacks, it's not "reputation" at all. They are negative and aggressive comments that go into an individual's inbox.

Sorry buddy I didn't set up the system.
"Constant Trolling" is hardly aggressive.
But hey its not the first time you attack and then pretend to be overly sensitive.
Now get back to topic as this is quite tedious.

[Azz]

Sorry buddy I didn't set up the system.
"Constant Trolling" is hardly aggressive.
But hey its not the first time you attack and then pretend to be overly sensitive.
Now get back to topic as this is quite tedious.

The constant calling of people "trolls" is the lowest form of intelligence on the internet.

[ynot]

He's called all 46 of the last 2 recessions almost perfectly.
Not sure if its 46 but no doubt more than 2.

[Valuegrowth]

He has been correct more than 80% of the time.
https://www.youtube.com/watch?v=Pl__BG9MU1U
I was agreeing with most of Granthams comments, especially 1929, 2009 parallels with todays market but his spruking/ enthusiasm for green investment I'm not so sure.

[winner69]

Wow ….look at that US yield curve

[SailorRob]

Wow ….look at that US yield curve

Curve?

I don't see much curve.

[bull....]

Wow ….look at that US yield curve

yep the yield spread will pressure stocks

[Valuegrowth]

yep the yield spread will pressure stocks

Commodities too under pressure.

[Daytr]

Non Farm Payrolls tonight. Risk on or off?
A strong number should see equities under pressure, USD stronger.
Will be a key indicator on the FEDs next move.

[Daytr]

Thanks for that. Everyone should just give up on the internet - and rely on your amazing updates.

Perhaps not everyone is as knowledgeable as you are on here. I don't do these updates for me.
Stop being so self centered

If others don't want me post these updates I am quite happy to stop as I said it's not for me.

[Valuegrowth]

This school of thought has very bearish outlook and seeing the pattern of like the 1987 crash.
https://markets.businessinsider.com/news/stocks/stock-market-crash-1987-recession-risk-us-economic-outlook-rates-2023-10

https://www.youtube.com/watch?v=MfeDn77MlrQ

On the other hand, the following school of thought has an idea of soft landing.
https://www.ft.com/content/a043b0aa-4eba-4fca-b0e3-e3cc74c1d812

[bull....]

10-year and 30-year Treasury yields rise to their highest levels since 2007


https://www.cnbc.com/2023/10/03/us-treasury-yields-investors-weigh-economic-outlook.html


going over 5% :scared: stocks down more 4200 test coming up

tested roughly 4200 twice this week ( never normally get exact numbers) good bounce of this support

unemployment way beter than expected
yields continue to rise
so none of this helped unless you consider the unemployment numbers means a soft landing still in play

lets see what happens . by the way the nasdaq held its support as well which helped the sp500

[winner69]

Non Farm Payrolls tonight. Risk on or off?
A strong number should see equities under pressure, USD stronger.
Will be a key indicator on the FEDs next move.

Strong jobs number …….equities up big time …usd stronger

Prob change fed’s mind as well

[moka]

https://www.youtube.com/watch?v=2ISKbYFaqnk

Our Currency Is ALWAYS Sacrificed When Crisis Hits, Without Exception | Matt Piepenburg

0:00 Inflation and deflation are not zero sum, they're cyclical but the end result to bail out the system which is more important than the currency will be more mouse click money and we could walk through with a calendar and a compass and a map in every scenario in history going from ancient Rome to China to 1990s Yugoslavia to Weimar Germany to Franco Spain to 19 - 20s America to today, whenever a system is at risk and things start to fail it is always the currency that is sacrificed to keep the powers that be in play, always without exception.

Right now surprisingly robust economic growth of 4.9 percent is currently expected for Q3 and inflation remains contained below four percent. That's less than half of where it was a year ago. Well this is great news right? The economy has rebounded, the Fed is taming inflation and we've dodged the risk of a recession. Well not really warns Matthew Piepenberg of Matterhorn Asset Management, the proprietor of Gold Switzerland.com. In fact this is a dangerously wrong narrative that too many are swallowing right now.

2:21 What's your current assessment of the global economy in financial markets?
I think for those of us who spend our time in the markets professionally there's a need, really frankly an obligation to derive the simple from the complex. And now more than ever I'm reminded of Patrick Moynihan who had that famous quote that you know we're all entitled to our own opinions but not our own facts. And there was a great social critic kind of political critic Edward Stotesbury, years ago who said when you're when you're questioning a system or an oligarchy or a financial structure or a political structure and you're looking for fraud or fragrant lies you have to look at what's not being discussed, these sins of omission or you know the denial of certain facts.

3:30 What I see right now at the global macro level is really almost an orchestrated choreographed Truman Show where really obvious facts with mathematical implications that are really beyond debate. Whether that's about debt levels or inflation or recession or currency direction longer term and perhaps worst of all this debate about a hard or a soft landing. When the way I look at it and we can get into this more detail the hard landing is already there the you know the plane has crashed onto the runway. The front tire is rolling down the passengers are screaming from the fuselage. There's nothing soft about the facts that I'm looking at right now empirically. And in those facts are being omitted.

Instead I see from our policy makers left or right, because they're really two stirrups to the same saddle, instead what we're seeing are debates of matters of degree, like matters of degree of inflation, or matters of degree about the next rate hike or cut, or matters of degree about dollarization. But I think we need to keep it simple stupid because the stupid is very simple and in that regard it goes back to the theme we talked about that hasn't changed it's only gotten worse is that you know when you have a debt to GDP that's across the rubicon of a hundred percent. We're now dialing in at 120 plus, you get to the point that Mohamed El-Erian talked about where there are no good scenarios left.

4:53 That's just a fact and then your policy makers are forced to make a choice between saving the currency or saving the system, saving the bond market in particular because the bond market impacts the equity market, it impacts pensions, it impacts financial markets and banks. But the math in history is pretty basic you know from David Hume in 1752 to von Mises at the turn of the century to Thomas Jefferson in the 1830s, to Ernest Hemingway as we talked about debt does destroy nations.

[Daytr]

Strong jobs number …….equities up big time …usd stronger

Prob change fed’s mind as well

Yeah markets initially sold off on the headline number & then rebounded strongly on the softer wage growth amoung other things. Interesting that a huge amount of the increase in jobs were Government jobs. 79,000!

So mixed signal for the FED, but they are probably more interested in wage growth than anything else.

The choppy nature of the market and separation of some assets from others, such as gold, bitcoin, currencies and oil down was an indication of a divided market on direction for mine.

I was long gold & copper which did well.
Had an order to pick up the Nasdaq on the volatility and missed it by 15pts! Doh!

It will be interesting to see if this is a bounce to sell into or the start of the recovery in equities.

[Valuegrowth]

As I said before, one major positive factor is low unemployment rate. Corporate world especially strong companies are coping well, despite having high interest rates, high inflation, and high cost of doing business. There are people that they believe "this time is different". I don’ think so. Chances are there for soft landing, but I am not going to touch any overvalued assets. Not a good period for highly leveraged weak companies.

[winner69]

The US Beveridge Curve looking interesting

These times are different eh

[moka]

https://www.youtube.com/watch?v=2ISKbYFaqnk
Our Currency Is ALWAYS Sacrificed When Crisis Hits, Without Exception | Matt Piepenburg

5:47 You can't get around the fact that liquidity is what drives a nation and drives a market.
When you hit debt levels that are unsustainable, when you cross 120% GDP growth becomes mathematically impossible. This is not discussed enough. So liquidity has to come from somewhere and unfortunately in our situation now because of our debt levels that liquidity will eventually come from a mouse clicker at the Eccles building the home of the world reserve currency where it's created and mass produced and ultimately debased.

Monetary policy can be used to support bonds that can be through QE, the dovish QE policy in lower rates or monetary policy can be used to support currencies that's hawkish with higher rates in QT, but monetary policy can't support both the bond market and the dollar at the same time or the currency at the same time.
Because of our debt situation now there will have to be a choice made, we either save the bond market which means save the system because that's tied to the equity markets, the financial markets and everything else, or we let the currency fall on its sword and we sacrifice the currency to save the system and that as Luke Gromen said is inevitable.

7:07 I see that as inevitable. I see that as an inflationary end game which is highly destructive to all of your viewers whatever their economic class, whatever their sophistication level, it's an invisible tax on all of us. It will affect the middle class the hardest, but I don't see any way around the monetization of our otherwise unsustainable debt. And I think that is incredibly mathematical and historical and it's not debatable. I think that is the hard end game that we're looking at and to my other point I think the soft landing, hard landing debate is distorted because we're very, very much in a hard landing already.

8:31 So you're not you're not predicting like a hyperinflation of the currency immediately?
No I don't know I don't think anyone can say that. I think Luke Gromen put it best, I can't say 12 months out but you can see the clouds on the horizon and you can see the rain. I just don't know if it's at noon 3 30 or 4 P.M.

10:10 Again by the way a five and a half percent Fed funds rate which everyone thinks is so painful is really in in the grand scheme of things a normal Fed funds rate. It just seems higher because we've gotten used to zero bound for so many years that was highly distortive.
If we keep rates at five and a half or six or six and a half percent, if we continue to push rates up of course we'll keep the dollar stronger, not just relatively but inherently it'll be stronger. Rising rates will keep the dollar stronger. But rising rates also increases the cost of our debt.

10:34 We've just crossed 33 trillion in public debt. We've added another 1.9 trillion to the back end of this year. We have doubled the annual debt service cost on the national debt within just the past two years alone, it's extraordinary. And we're averaging about 500 billion a month and so we're not going to get that from GDP. And we'll talk about GDP growing, but debt is growing faster in the higher pace. But you're not mathematically going to get growth naturally, you're not going to get it from revenues or tax receipts, so it's got to come from somewhere, so you're gonna have to monetize that debt, and then I think that's why inevitably this concept of fiscal dominance is inevitable.

11:20 As you as you raise the cost of debt and as you raise debt and you don't have the funds to pay for it you're going to have to manufacture synthetic liquidity through a central bank policy to cover the debt interest expense. The interest expense on Uncle Sam's bar tab is now over a trillion a year. That is not payable unless we monetize it at some point. Now people could say well we haven't had to pivot yet, but frankly last September a year ago at this time the Department of Treasury pivoted for us. We emptied the TGA The Treasury General account to create backdoor liquidity. So that was a one-trick pony in a sense. Janet Yellen kind of trumped Jerome Powell by creating liquidity indirectly. Then we had the BTFP program that created another backdoor QE, another backdoor dose of liquidity.

12:04 People don't realize the BTFP program cost more than TARP ultimately. So we had to spend more money than we did in 2008 to bail out the too big to fail banks. So we have created some pivots off the balance sheet so to speak, outside of Powell's purview indirectly through the TGA account and in this bank funding program. So we bought some time but as we keep extending our debt levels and increasing our fiscal policy like drunken sailors we have to monetize that. We have to pay for that somewhere. Again my argument is empirically that's not coming from tax receipts or GDP. That's going to have to be paid at some point.

12:44 We're never gonna default on our treasuries, on our Sovereign bonds and if we don't support them then bonds get weaker and weaker, and yields get higher and higher. As yields get higher and higher interest rate gets higher and higher so we're in this vicious cycle where we're damned if we do, damned if we don't. We have to do something to keep those yields controlled. We have to do something to keep those bonds from falling too far in price. Right now Powell's policies are putting tremendous downward pressure on bond prices which puts upward pressure on yields because they're inversely related right and when we're adding another 1.9 trillion to the back end of this year.

[moka]

https://www.youtube.com/watch?v=2ISKbYFaqnk (https://www.youtube.com/watch?v=2ISKbYFaqnk)
Our Currency Is ALWAYS Sacrificed When Crisis Hits, Without Exception | Matt Piepenburg

13:13 We're issuing bonds at a rate we haven't seen in 55 years but we're also seeing foreigners less interested in those bonds. Who wants an IOU from a government that's giving you a declining asset that's 120 percent over its keys in debt, it's a bad credit, and we can get in the debate about Brent Johnson and how it's still the best horse in the glue factory.

14:09 The only solution is we cut our spending by 40% but I don't see a politician left or right who can get elected on that on that platform. Or we could do nothing and just let rates stay high and let more banks fail, more businesses go bankrupt, more small businesses disappear, more Spotifys, more Amazons more Googles lay off more jobs.

But we can't cut our spending, it's political suicide. We can't increase our GDP at a rate high enough at these debt levels to grow our way out of this, so we're going to fall back to a mean reversion of relying on that mouse clicker at the Eccles building. I haven't had anyone show me an argument that gets us out of that scenario.
And when that happens and again no one knows when or what the real trigger will be, and we can talk about all the things that already are breaking, but when that happens that will be inherently inflationary policy reaction. And in the interim we could have a market crash, a further bond crash, an S&P crash which will be a disinflationary interim scenario because inflation and deflation are not zero-sum they're cyclical, but the end result to bail out the system which is more important than the currency will be more mouse click money.

16:39 I think history is still a guide no matter how much we try to cancel it. The bad the good and the ugly of it we have to learn from it and again this is something I talked about with Grant Williams last year wisdom is not just IQ or SAT scores it's accountability, it's recognizing it's recognizing failures, it's being accountable for them, and being blunt about solving them.

17:04 I think it's very hard for a politician to be blunt about the austerity needed, the spending cuts needed, the entitlements that need to be cut, and to say that in a candid way to the American people and get re-elected. We can always blame politicians for being dishonest but us as voters also have to recognize that we don't like to hear what we don't like to hear either. And there is a sin on our own part for wanting to vote for the platitudes and promises because that makes us feel better at election time.

But I think the American people can follow the Kennedy mantra - it’s that's not what your country can do for you but what you can do for a country. But they have to trust that government, they have to trust that country, they have to trust that leadership. I think if we had an honest politician and an honest policy maker and a population that was treated fairly they would be willing to try to tighten their belt and get through what needs to be done to cut our spending because we don't have a life raft that fits everything and solves everything. We're gonna have to make compromises. You can blame the politicians but you have to blame the voters too. We're not the greatest generation, not as a society today. And our politicians are not, and they're not trusted that way. What's interesting is going back to the greatest generation, part of the reason why there was so much social cohesion back then was because the nation passed through the crucible of World War II right where we united around a general threat. We fought the great evil, we made a lot of sacrifices. There was a lot of desire and demand for centralized control that we could believe in.

Neil Howe the demographer who has written the book and has the framework of the fourth turning. He re-emphasized that fourth turnings is where the status quo falls apart and as it does that's where you get more demand from the populace for more centralized control for government that can come and really take care of the problem. And the people line up behind that. So in many ways it's sort of human nature, where you can you can change behavior by insight or through pain.

Insight is doing the math in your head and saying boy if I keep behaving like this something bad's going to happen in the future. I should clean up my act today. Most cases we don't do that. You don't really change your eating habits until you have that first heart attack.
I hold out some optimism that when the pain gets bad enough we will rally to demand more of our elected officials. Maybe get back to that sort of Kennedy era-esque where we're willing to do the right thing for the future. But I think right now we're certainly not there.

[moka]

https://www.youtube.com/watch?v=2ISKbYFaqnk (https://www.youtube.com/watch?v=2ISKbYFaqnk)
Our Currency Is ALWAYS Sacrificed When Crisis Hits, Without Exception | Matt Piepenburg

20:54 It's very hard to quantify, it's very hard to empirically nail down, we all feel it it's like that famous Supreme Court Justice said “I don't know how to define pornography I just know it when I see it.” I don't know how to define trust in the system, I just know when it's evaporating. The Bureau of Labor Statistics or the NBR and how they manipulate employment debt or how they manipulate inflation data.

Look at institutions, whether it's the NIH, the World Health Organization or the CDC or the Washington Post which is really the Bezos post, there are so many things that we've just come through as a country and as a world in the last few years. Whether it was on safe and effective vaccines this was promised by folks like Fauci, and again I'm not here to take a pro or con side. I'm saying it's pretty much empirically true proven now post facto and it was kind of argued during the height of the crisis, the Great Barrington, in Stanford, at Oxford and Harvard other universities these things were not true. These were not necessarily perfectly safe or perfectly effective. The fact that there was no debate about that created a distrust problem.

So there's a slow distrust permeating and there's a book that I think everyone should read it was written in 2014 by a guy named Mike Lofgren it's called The Deep State. He was warning already in 2014 about this really dangerous marriage between DC and Wall Street.
24:43 You have guys like David Petraeus who were once military guys who now work for Wall Street buyout firms. It's a classic case of the foxes guarding their own hen house and getting paid. We need the inhabitants of those institutions to be credible and honest and not working from the same system they're supposed to be regulating, there's a real corruption there that's palpable.

We should be able to discuss why that when the S&P went up 600 percent since the great financial crisis, that 90 percent of that went to 10 percent of the American population. We should be able to discuss how monetary policy affects social policy and affects wealth inequality We should be able to discuss why Wall Street has manipulated and migrated to DC to get better pay or better control to regulate themselves. The official narrative out of Wall Street is we're going to be fine we're going to have a soft landing, and the FED has your back. What I'm here to talk about today is how many objective reasons why that's simply empirically quantifiably not true, it's just not true.

We are not being told the transparent truth. Our official story and the censorship that I'm seeing and the centralization that I'm seeing in the omission of facts and the omission of debates is very troublesome to me.

The issue with an exponential system if you're heading towards a problematic era is once you can actually see the problem it's way too late to fix it.

I mean sadly we're instead of kind of coalescing we're splintering, this is the identity politics. When you have self-censorship, when you're afraid to talk about these things because you're being labeled X or Y, or left or right. We're debating now about transgender bathroom.

This is another classic symptom of a failed regime or a failed system that you look for ways to distract the people from what's really at fault. And what's really at fault ultimately is fiscal and monetary because of our debt policies. We are being told to blame that, well first we can blame it on covid, or we can blame it on Putin, we can blame it on climate change we can even possibly blame it on Little Green Men from Mars.

We are like a family that is living way beyond our means and no one wants to take accountability for that. No one wants to take their credit card and cut it up. We have to face the consequences of too much debt. It's really that simple.

I think back to the last politician that I can recall who really tried to put these on the table these issues and it was Ron Paul and he was he was vilified and derided for these things. It's just a revolving door between DC and Wall Street.

[moka]

https://www.youtube.com/watch?v=2ISKbYFaqnk (https://www.youtube.com/watch?v=2ISKbYFaqnk)
Our Currency Is ALWAYS Sacrificed When Crisis Hits, Without Exception | Matt Piepenburg

38:10 I think it's an oxymoron to have debt-driven growth they're mutually exclusive. Debt-based growth is not growth, it's just more debt and the idea that we're in some soft landing, that we have a resilient economy or a strong labor force that’s just untrue.

Almost a year ago to this date we had the gilt implosion in the UK. Three of the four largest banks to ever fail have failed this year and yet they're kind of out of sight out of mind.

Corporate debt expenses are up 22%, that would explain why we have 400 bankruptcies year to date and bankruptcy it's rising at the fastest rate since 2010. It's double the levels of last year and the top 10 bankruptcies account for 200 000 jobs and then you look at the layoffs at places like Spotify or Microsoft or Google or Amazon or even Goldman Sachs, I mean Google is 10 000, Amazon 18 000. When Google and Amazon or Goldman are doing layoffs that means they're not making earnings so there is a correlation between the markets and the economy but the bigger point is when you're having bankruptcies and layoffs how can you say you have a strong labor market. And if you're waiting for the nber to tell you're in a recession they're always going to be a year late. You're going to be deep into your knees into recession when it becomes official.

Even many of those who are employed that's not multiple job growth, it's individuals with multiple jobs. John Williams who does ShadowStats was just on with David Lin talking about real true inflation we had 3.7 percent by the real statistics. He says closer to 11 and a half percent based on the same metrics that we used in the Volcker era.

More importantly labor is a lagging indicator. We will not see the true pain of our quote-unquote strong employment for us until we're knee deep in a recession. Look at the layoffs, look at the bankruptcies, look at the number of empty homes.

I've talked to loan officers at major big banks in commercial real estate just doing my own analysis and these guys these are guys who work on commission and two or three years ago they'd be doing loans at the 250 million level take out construction loans they'd be doing 30 to 40 to 50 of those a year. Now they're doing two or three a year.

There is nothing soft about our higher for longer policy. It is already breaking things.
I think it's insulting to us to continually omit the real data and to continually omit the real themes and the real topics of discussion while we argue about soft versus hard when it's not even worth arguing about. Or we argue about what the next rate hike will be, whether it'll be at the end of the year, next year, what Powell is going to say at the fomc here at the Brookings Institute.

It's important to be as transparent as possible and I can't believe we're not seeing that from our financial press or our political leadership but things are breaking and the list is long and distinguished and it's objective, it's not subjective.

I don't know how to be more blunt about this and it's frustrating and I think one of the best leading indicators, not just to mention the Fitch downgrade, we can talk about the issuance of more treasuries, but this Anthony Oliver from Farmville Virginia he has 70 million hits in one month. That song is an anthem for the middle class, the ignored middle class that is an indicator itself, that's almost twice the population of the entire country of Canada and if you look at the number of how many Americans 325 million he's got 70 million hits. He's striking a nerve that people can feel. They don't know about leading index of indicators, economic indicators, they don't know about federal policy, QT versus QE, dove versus hawk Powell, soft versus hard, they just feel it. I think Oliver Anthony's from out of nowhere success with that song is a good example of some of these social fault lines that are beginning to break open here.

This is from the St Louis Fed, a white paper on this in June, Luke Gromen picked it up and wrote brilliantly about it brought it to the attention - the basic irony is Powell’s war against inflation is inherently inflationary.
I do not believe that Powell's war on inflation is sincere. I think it's optics, inflation manipulation and central bank tactics. I don't think Powell is really fighting a war on inflation. I think Powell seeks inflation. What he has is the benefit of being able to misreport or under report inflation through the Bureau of Labor Statistics fiction. So the oldest trick in the book is negative real rates where inflation is higher than the yields on your bonds.

So if you take John Williams of ShadowStats and he says it's 11 inflation let's give him the benefit out and say it's really nine or eight percent it's still a huge gap from the official number. But if the unofficial number, the real inflation number is say nine percent and yields on the 10-year are four point four percent then you're running negative real rates that helps you inflate your way out of debt secretly. That's a hidden secret knife wound to the middle class, into the real economy, into the real citizens of the country but you are secretly inflating away debt.

I think Powell knows that we need inflation to inflate away debt but I can have my cake and eat it too by misreporting inflation. Optically of course he has to say I want to fight inflation because inflation is bad.
It is bad to have negative real rates officially too because it makes it harder to sell treasuries abroad when you're getting a negative return so he doesn't want inflation to get too high but boy if he could have the best of both worlds it's to report of victory on inflation, but then actually let inflation rip and I think that's the collusion between the Bureau of Labor Statistics which I think wins the Nobel Prize for fiction, and how they report inflation.

[moka]

https://www.youtube.com/watch?v=2ISKbYFaqnk (https://www.youtube.com/watch?v=2ISKbYFaqnk)
Our Currency Is ALWAYS Sacrificed When Crisis Hits, Without Exception | Matt Piepenburg

52:16 I think John Williams accurately reports the CPI scale the way it was used in the Volcker era. So if Powell wants to be Volcker let's measure him by the same inflation scale, let's use the same benchmark. Again these are tricks and this is something that Jean-Claude Juncker said, he was a former president of the European commission "look when it becomes serious we just have to lie." I really do believe that the inflation narrative like so many narratives is convenient but it's not accurate and I think we deserve better than that.

But I at the same time if I were a central Banker groomed to be a Fed chair which is really what they are, they're groomed into consensus think and to sacrifice their intellectual integrity for the vanity of their job position, if I were in his shoes I'd probably play the same tricks to stay in power and to control my legacy. But I don't think it's a profile of courage, I don't think it's a profile in integrity and in transparency the kind of wisdom that we want in our plato-like leaders when you're manipulating data.

The reason Powell is raising rates and QT team reducing the balance sheet is very simple because he sees a recession already here and getting deeper. The only two weapons the FED has is the price of money and the supply the amount of money. They can manipulate interest rates and they can expand or contract the balance sheet of the Fed, that's it. And so up until a few years ago we had a too fat a Fed balance sheet and we had zero bound interest rates that meant Powell was impotent in the face of the next recession. He had nothing to cut because rates were already at zero right and his balance sheet was so fat he had nothing but now he's raising rates and reducing the balance sheet so when it really does become obvious despite all the things we've talked about, the litany of evidence that we're deep in the recession.

When we really see a market sell off, the real crisis that triggers the FED, with a five and a half fed funds rate the Fed can actually reduce rates again. He'll have some ammunition in that revolver to actually fight that real problem in the markets and he'll be able to expand the FED balance sheet. He's building his ammunition by raising rates and reducing the balance sheet so they'll have something, anything that he can use when the situation gets far more dire than it is right now.

Think about the covid crisis in March of 2020 we printed more money in the subsequent months than we did in previous times. We went four to five trillion in the FED balance sheet that was massive experience and that was based on the covid crisis of March 2020 and the precipitous fall in the S&P, it was 36 I think, would have gone to a mean reversion of 70 or 80 percent had we not printed trillions.

Where we're at this year is barely getting back to where we were, in other words there hasn't been this incredible market behavior we're really kind of rolling up running uphill in roller skates, the litany of examples that I just listed, the layoffs, the bankruptcies, the distortion in the credit markets to me means that as rates either stay the same or get a little bit higher it's going to put continued pressure on the majority of the zombie companies and the equity markets to not be able to refund or refinance and revalue their books. The cost of credit is the key cost of growth in the S&P. When that becomes unpayable you're going to start seeing earnings fall you're going to start seeing more layoffs ,you're going to start seeing more faltering stock performance.

I think it's a joke to call these markets resilient. They haven't priced in the new price because they can't roll over their debt or buy back their own shares like they could three or four years ago. There will be an uh-oh moment in the S&P, the Dow and the NASDAQ. It'll start at the NASDAQ, it'll keep up to the S&P and finish with the Dow.
I don't know what the trigger will be. I do know that it will always be blamed on something else, it will be blamed on covid, Putin, global warming, martians whatever or some other geopolitical event when that happens. There won't be natural growth to sustain, there is no narrative percolating from the U.S that's going to save this.

The FED will act when the markets tank because the FED and the markets are chained at the hip, that's what the Fed was spawned for, to support the markets and the banks.

Again it won't be blamed on the bad actors that put us here, the monetary policy makers and the politicians that live beyond their means. Hopefully enough people wake up to realize the FED is actually the arsonist that's creating the fires, and the firefighter that's saving us but we're not quite there yet.

What the FED has done to our economy, to our markets, to free price discovery, to capitalism, to wealth inequality, because I am a capitalist and I do believe in constructive destruction and letting bad companies rot and good companies profit. I don't believe that should be controlled by a central bank. I don't believe someone should get a Nobel Prize for solving the debt crisis with more debt that just makes it harder for the next generation and that destroys our currency. It always ends in a currency destruction and again that's just why gold is becoming more popular not only among high net worth or retail investors but central banks outside of the U.S.

Sovereign holdings of gold I have just hit the highest point in history. No matter how much the Central Bankers of the world like to call gold the barbarous relic they probably own more of it than they ever have.
When you see central banks stacking physical gold that's troop movement towards something coming. You don't have to be a genius to see what they're saying, the implications are not the end of the US dollar, not the end of America, not the end of the world Reserve currency but what it really means is the faith and the inherent purchasing power of the world reserve currency is dwindling because every nation knows that the American dollar though relatively stronger than any other currency, it doesn't change the fact that it's getting diluted like a glass of wine with water poured in it every day. The faith in that Greenback is getting weaker and weaker and they're slowly transitioning. Not to replace the dollar overnight, it'll take decades to do that. What I'm saying is the strength of that dollar, the inherent strike not its relative strength is dissipating before our eyes, it's death by a thousand cuts. It is no coincidence those troops are lining up along the border, those central banks are stacking gold and they're dumping treasuries.

[Bjauck]

The Levant is in flames again. Israeli Defence was caught unprepared. USA is involved as Israel’s solid ally. Uncertain times ahead. Markets don’t like uncertainty.

[bull....]

The Levant is in flames again. Israeli Defence was caught unprepared. USA is involved as Israel’s solid ally. Uncertain times ahead. Markets don’t like uncertainty.

oil and gold up as they do. stocks largely ignore wars

[Daytr]

oil and gold up as they do. stocks largely ignore wars

Dollar down across the board which is the opposite to flight to safety. Copper also up.
I'm sure gold & oil got a boost from the tension but this appears to be more a USD move due to the slowing of wage growth.

[bull....]

Dollar down across the board which is the opposite to flight to safety. Copper also up.
I'm sure gold & oil got a boost from the tension but this appears to be more a USD move due to the slowing of wage growth.

fed people crushed the dollar , if not for them it would have gone up

[JBmurc]

The Levant is in flames again. Israeli Defence was caught unprepared. USA is involved as Israel’s solid ally. Uncertain times ahead. Markets don’t like uncertainty.

So much for the IRON DOME ..

some very interesting watching on "Aljazeera" news ..

[Rawz]

So much for the IRON DOME ..

some very interesting watching on "Aljazeera" news ..

bit of a conspiracy theory here lol.. but all seems a bit unbelievable that some random gunman can walk/fly over the boarder. Almost as if it was allowed to happen. Get the media beaming images of people being kidnapped/killed around the world. Now everyone is on their side for what is going to be a very large counterattack and occupation of the strip.

The British did a bit of this tactic at the start of the Falklands war.

anyways glad I live in NZ where we only need to deal with ramraids at the local Michael Hill store

[bull....]

nice bounce from the 4200 level , getting into over brought territory now right around the 38% retracement level

[SailorRob]

nice bounce from the 4200 level , getting into over brought territory now right around the 38% retracement level

Brought over from where exactly?

[moka]

bit of a conspiracy theory here lol.. but all seems a bit unbelievable that some random gunman can walk/fly over the boarder. Almost as if it was allowed to happen. Get the media beaming images of people being kidnapped/killed around the world. Now everyone is on their side for what is going to be a very large counterattack and occupation of the strip.

The British did a bit of this tactic at the start of the Falklands war.

anyways glad I live in NZ where we only need to deal with ramraids at the local Michael Hill store Not a random gunman but an attack planned for two years or more.

https://collive.com/2-years-in-the-making-how-hamas-planned-the-bloody-attack/
(https://collive.com/2-years-in-the-making-how-hamas-planned-the-bloody-attack/)
A source reveals that Hamas terrorists have been carefully deceiving Israel about their capabilities and plans for the last 2 years. Hamas took Israel by surprise by launching an unprecedented attack by air, land, and sea, catching the country off-guard on the holiday of Shmini Atzeres.
The large-scale attack, which Hamas called “Operation Al-Aqsa Flood,” opened at 6:30 AM on Shabbos Shmini Atzeres, 7 October 2023, at the conclusion of the Tishrei month of holidays for Jewish people.

It began with Hamas firing over 5,000 rockets from the Gaza Strip into Israel within a span of 20 minutes.
Simultaneously, around 1,000 armed terrorists infiltrated Israel from Gaza using trucks, pickup trucks, motorcycles, bulldozers, speedboats and paragliders. They attacked, killed and injured Israeli civilians and soldiers.
On the day of the operation, it was divided into four distinct phases, as detailed by the Hamas source. The first phase involved a barrage of 3,000 rockets fired from Gaza, coinciding with incursions by fighters who glided over the border on hang gliders.

Once the glider-borne fighters were on the ground, they secured the area for an elite commando unit to storm the fortified electronic and cement wall dividing Gaza from the settlements, constructed by Israel to prevent infiltration.
Using explosives, the fighters breached the barriers and swiftly crossed over on motorbikes. Bulldozers widened the gaps, allowing more fighters to enter in four-wheel drives, as described by witnesses.

A commando unit targeted the Israeli army’s southern Gaza headquarters, disrupting communications and preventing personnel from contacting commanders or each other, according to the Hamas source.
The final phase involved relocating hostages to Gaza.

This covert operation involved shrouding military plans in secrecy and convincingly portraying a reluctance for confrontation to Israeli authorities, according to a source.
While Israel believed it was quelling a fatigued Hamas through economic incentives for Gazan workers, the group’s fighters were covertly undergoing rigorous training, often in plain view, according to a source close to Hamas.

[Daytr]

Quite incredible considering Israeli intelligences reputation.
Perhaps in recent years they had their eye off the ball & more focused on the fallout from Epstein

[SailorRob]

Just my own observations but this economy seems whit hot still, cash is being used to vacuum up every shred of goods and services that there are.

Often cannot park in Mitre 10 even middle of week days, plumbing shop has tradie vans circling waiting to park, lots of stuff is not on the shelf and on order, boat electronics installers are booked out till April, canvas work etc all out past xmas, gas stations always choka, just absolute madhouse.

Of the 250 refinery workers, many are onto their second and third jobs since redundancy, none of them looking for work.

Service providers don't even return calls, everyone is busy as hell, same story everywhere. Maybe building is bit different but not convinced.

Restaurants and bars are spilling over...

I pretty much have not seen real demand issues in my adult life, perhaps a few months in 2008 but bloody hell everything is PUMPING.

[Bjauck]

bit of a conspiracy theory here lol.. but all seems a bit unbelievable that some random gunman can walk/fly over the boarder. Almost as if it was allowed to happen. Get the media beaming images of people being kidnapped/killed around the world. Now everyone is on their side for what is going to be a very large counterattack and occupation of the strip.

The British did a bit of this tactic at the start of the Falklands war.

anyways glad I live in NZ where we only need to deal with ramraids at the local Michael Hill store Pass the Tui. Support will evaporate when the Gaza siege makes civilians the main victims.

[bull....]

Brought over from where exactly?

traders speak , i dont expect you to understand anyway guess your be pleased to know your travel time on the road's is taking longer and your doctors visits but hey bet your house will start to go up soon

New record: Annual net migration tops 110,000 for the first time in history
https://www.nzherald.co.nz/business/new-record-annual-net-migration-tops-100000-for-the-first-time-in-history/X3FQ4AUWHNBVPPJYRLKLFAFSZM/

[Valuegrowth]

Just my own observations but this economy seems whit hot still, cash is being used to vacuum up every shred of goods and services that there are.

Often cannot park in Mitre 10 even middle of week days, plumbing shop has tradie vans circling waiting to park, lots of stuff is not on the shelf and on order, boat electronics installers are booked out till April, canvas work etc all out past xmas, gas stations always choka, just absolute madhouse.

Of the 250 refinery workers, many are onto their second and third jobs since redundancy, none of them looking for work.

Service providers don't even return calls, everyone is busy as hell, same story everywhere. Maybe building is bit different but not convinced.

Restaurants and bars are spilling over...

I pretty much have not seen real demand issues in my adult life, perhaps a few months in 2008 but bloody hell everything is PUMPING. The recession is getting postponed thanks to strong job market,but cycle will repeat.

[Daytr]

Just my own observations but this economy seems whit hot still, cash is being used to vacuum up every shred of goods and services that there are.

Often cannot park in Mitre 10 even middle of week days, plumbing shop has tradie vans circling waiting to park, lots of stuff is not on the shelf and on order, boat electronics installers are booked out till April, canvas work etc all out past xmas, gas stations always choka, just absolute madhouse.

Of the 250 refinery workers, many are onto their second and third jobs since redundancy, none of them looking for work.

Service providers don't even return calls, everyone is busy as hell, same story everywhere. Maybe building is bit different but not convinced.

Restaurants and bars are spilling over...

I pretty much have not seen real demand issues in my adult life, perhaps a few months in 2008 but bloody hell everything is PUMPING.

I think it's very segmented in regards who is sitting pretty & who isn't.
Some came out of Covid flush others were flushed.
Mortgage holders are struggling, those without debt it doesn't matter.
Rural economy is mixed with farmers I hear generally tightening their belts.
Construction mixed, Government projects have certainly kept the trades busy in lieu of private construction which has waned.
Strong Immigration has also certainly helped considerably.
Interesting times.