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Old 2022-01-25, 12:19   #1
garo
 
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Default Mystery Economic Theatre 2022 (or is the crash upon us?)

One of my formative financial experiences was to put some of my meager savings into tech stocks in 1999 only to watch it evaporate over the next couple of years., The experience scarred me so much that I didn't look at the portfolio for years afterwards.
That is until I started reading the Global Financial Crisis (was Subprime Meltdown) thread in early 2008. This led me to get rid of all my equities and start dabbling with the dark side (i.e. short selling and options) and eventually led to a career change.
I now believe that we stand on the precipice of a crash of similar magnitude. It will certainly play out differently but all the signs point to another crash.


To kick off this discussion I submit to you the latest missive from Jeremy Grantham:
https://www.gmo.com/europe/research-...-rumpus-begin/
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Old 2022-05-23, 21:07   #2
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Looks like this was on the money.
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Old 2022-05-24, 13:54   #3
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HODL

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Old 2022-05-24, 15:05   #4
masser
 
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Quote:
Originally Posted by Xyzzy View Post
HODL

Hold on, dear life?

Hands of diamond-like?

Hurts on down low?

Has only digital lucre?
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Old 2022-06-20, 22:26   #5
ewmayer
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Quote:
Originally Posted by Xyzzy View Post
HODL

Yahoo! Finance explains why Crypto is not merely a massively more environmentally destructive techno-iteration of Tulip mania (the italicized snip is literal-copy from the Yahoo headlines section of the BTC-USD summary page), and why NFTs (non-fungible tokens) are the NBT:

This investor bought a Bored Ape NFT for $1,700 in 2021 and plans to HODL. He explains why the crypto meltdown didn't stop him from quitting his job to work in Web3: "Name you industry, NFTs are going to disrupt it. Look where some of the smartest people are going," Keith Martin said."

Note, not just any investor, "this" investor - that carries a lot of weight. So, to summarize:

o "Name you industry, NFTs will disrupt it", and I believe he is correct, just that his usage of "disrupt" may differ in meaning from the stodgy old negative-connotations-freighted "to interrupt (an event, activity, or process) by causing a disturbance or problem; to drastically alter or destroy the structure of (something)."

o If "non-fungible token" strikes you as "bafflegab", don't worry you pretty little head about it, just back up you truck and buy with both you fists.
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Old 2022-06-20, 22:34   #6
chalsall
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Quote:
Originally Posted by ewmayer View Post
Note, not just any investor, "this" investor - that carries a lot of weight. So, to summarize:
Noise.
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Old 2022-07-07, 18:46   #7
diep
 
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Quote:
Originally Posted by garo View Post
One of my formative financial experiences was to put some of my meager savings into tech stocks in 1999 only to watch it evaporate over the next couple of years., The experience scarred me so much that I didn't look at the portfolio for years afterwards.
That is until I started reading the Global Financial Crisis (was Subprime Meltdown) thread in early 2008. This led me to get rid of all my equities and start dabbling with the dark side (i.e. short selling and options) and eventually led to a career change.
I now believe that we stand on the precipice of a crash of similar magnitude. It will certainly play out differently but all the signs point to another crash.


To kick off this discussion I submit to you the latest missive from Jeremy Grantham:
https://www.gmo.com/europe/research-...-rumpus-begin/
Seems you can better follow me there as it was total obvious that in 2008 things would crash. Publicly i posted spring 2007 already that end 2008 there would be major crash. In fact i had predicted it for november 2008 as there was elections that month. In reality it started crashing in october or arguably end of september the first problems started to get there. Now i wasn't the only one noticing that things would crash. Many around me did too, especially some yanks. It was obvious banks started distrusting each other in 2007. That's why everyone saw it unfold.

As for current situation I think one must follow the global picture. Now first i must say here that for persons on this forum we first must agree to disagree about certain political things. Let's focus upon the facts.

The fact is that some nations on this planet are huge overspenders. Not only some 3d world nations, also USA and Europe.

Let's first analyze USA. Now we can look at presidents as clowns, because their economic advisors in general spoken are not exactly clever persons. For some weird reason it doesn't matter whether presidents are democrat or republican - their advisors are in general spoken total idiots.

Let's first go to hard fact. Hard fact is that federal there is a limit to what you can borrow before you are practical bankrupt. I say practical, because in theory non-EU governments can borrow infinite amounts of money in their own currency, as they can print money. Yet there is some hard practical rules. It's like having a mortgage. If you borrow more than 4 times your income, it's very complicated to ever pay back a mortgage.

USA has federal bit more than 4 trillion dollar income and has a debt of nearly 30 trillion. So USA is practical bankrupt.

Now stopping the long term spending programs Obama started is pretty complicated political. So Trump's plan to reduce the deficit was especially attempts to get back industry into USA.

As we realize now this is not so easy. For example he managed to convince Elon Musk, who had big succes with Tesla V3 as it gets produced in China entirely, to start building a new plant in Texas. Yet of course the usual trick in industry is to not give away tooling to the next guy. The chinese now sabotage giving their tooling to the US plant - so we see now years later that Musk has problems setting up a plant in Texas to produce. Also of course wages are much higher in USA and Europe. In fact in Netherlands machining hours is way more expensive in practice than in USA, but even then obviously 3d world nations are much cheaper. So this Trump plan in practice had victories on paper and some successes here and there but it's a painful way to reduce deficit. It is a very honest open and fair way to follow this path however and i would personally say a very good attempt.

Biden advisors however are deepred socialists as we would call it in Europe (meaning nearly communists) and their plan to reduce the deficit was to allow a huge war in Europe. Now to avoid European nations from still trying to prevent this war, as of course european nations have enough weapons to annihilate putin's forces conventional within 1 day by means of airforce (500 modern jet fighters for western european nations versus before start war 18 su-57's for putin), some sort of very short timeframe should be between announcement of Biden and Putin invading Russia. We must note another cricial role there is for Scholz in Germany.

One way to steer the war in Ukraine for biden is a contractual thing. That is that weapons produced in USA can be vetoed from getting handed over to Ukrain by USA. So this is how Biden avoided a complete massacre of Russia in Ukrain. By forbidding weapon delivery of American produced weapons handed over to Ukrain.

I guess the original idea from these policy advisors, with zero experience in how Sovjet warfare works (like standard procedure is kill all men that possibly one day could fight you), is assumptions like that Putin would soon stop his war after gaining a bit of territory (still the size of Texas and California combined and with original majority of Ukrain population living there).

Huge mistakes are that dictators do not follow western policy advisors and that Ukrain is fighting an existential war. Either kill or get killed. they should've listened to pentagon there.

Another major issue is the sanctions. Socialists have no idea what sanctions economic impact are.
The worldwide economic impact of all this is huge. Russia is simply the largest nation on the planet in terms of landmass and produces major amounts of corn and wheat and all sorts of other products such as gas and oil not to mention Ukrain there.

Conquered areas are total stripped of life and all agricultural equipment looted. So nothing can get produced in conquered territories at least not for many years until after war is over.

Practical impact of course by mobilizing entire industry in Russia on 13th of June for warfare. Meaning that roughly 150 million people are only busy producing things just for the war - which practical is the same thing as a general mobilisation which has to follow - otherwise producing that much weapons doesn't make sense. That means millions will be thrown into battle.

All this is of major worldwide economic impact.

A much better plan would've been not having any sanction at all and prevent the war end of 2021.

Any sort of ecomic prediction now will depend upon what will happen in upcoming winter offensive from Russian side.

We know milions of ex-enlisted soldiers have already received past months phonecall in Russia. So it's also possible that gradually they get thrown in battle without declaring a general mobilisation. In reality the only thing that really matters is the declaration of industrial warfare mobilisation in Russia.

That is of major worldwide economic impact as it shows us where all this is headed towards.

Now pure conventional seen, if European nations or Biden wants Ukraine to win, this is very simple. Yet so far very little weapons have been sent to Ukrain. We see however that Russia is not up to it. In severodonetsk despite having dozens of 'battlegroups' (in Russian of course it's called different - an integrated fighting batallion) with each battlegroup having up to a 1000 soldiers, they were pushed back time and again for many weeks. All this based upon a single weapon platform - a few Polish Krab systems. this is a L52 howitzer and other comparable ones are Pzh2000,Zuzana,Caesar. The American M109 is not on par with this - it doesn't shoot very far and also the delivered M777's to ukrain are not even in the same league, as the accurate aiming device had been removed and the barrel is L39 length so doesn't shoot that far.

So we see that even this little Ukrain gets already hammers the Russians. What we know further is that potentially a lot of the above systems can be delivered to Ukrain. Past 6 days or so the himars/m270 combined with a bunch of the above howitzers have hammered the Russian lines.

this would mean short term that Ukrain should win the battle. All gets unclear when russian industry has been producing a lot of weapons and millions of men get thrown into battle. think of several thousands of battlegroups.

That has major influence on the world wide economic outlook.

Also the refusal of Biden to allow other nations to delive weapon systems to Ukraine is what makes everything very unsure. Just threatening by mouth publicly : "the floodgates will be opened" and in meantime in the backgroun being the guy who stopped critical weapon system deliveries to Ukrain against a Russia which has thousands of similar systems fielded, that's the main influence of what happens to the financial outlook.

Financial world needs a clear policy. Not some: "let's do a little sometimes" type policy. Pick a winner Biden. Either say no to everything and let just Europe provide locally produced weapon systems to Ukraine and clearly say you like Putin to win as you allowed him to attack - or open instantly those floodgates so that the old junk from Russia can be reduced to rubble.

That's what the financial world needs.

Right now it's a military midget that is keeping the world busy too much.
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Old 2022-07-08, 02:43   #8
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Quote:
Originally Posted by diep View Post

I guess
fact check: true!
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