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On 5/12/2022 at 9:14 PM, southsider2k5 said:

Been  a minute since I saw a bloodbath like this.

Down to 18000 Dow in 2020, 2007-08, 9/11 aftermath, tech/Nasdaq crash in 1998-2000, 1987…those were all much worse (obviously).

But a 15% correction seems a bit of a shock with how low unemployment is, and how much profit some companies are raking in.  That said, it was long overdue.  You have interest rates rapidly climbing, affordable housing shortage, climate change, abortion battles, Ukraine, election year, gas prices, impossibility of spending under $100 at the grocery store, etc.

The government might be at its most dysfunctional since the Civil War in many aspects.

Edited by caulfield12
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  • 4 weeks later...

How about some macro predictions?  Crazy times where anything can happen, right?

Pretty sure they gotta hard pivot to QE again, so if you’re with me on that, how/when does it happen?
 

Lately I’m leaning towards QT for 2-4 months, then some kind of “crisis” like Russia blows up natgas facility in Europe (can’t take credit for that idea, but lately I like it), that’ll force massive QE to the moon as the world we are bankrupting is forced to rush even more to dollars.  Part of that QE will be student loan forgiveness, maybe credit card forgiveness & small business debt forgiveness too for balanced optics.  
 

Ooo, can’t forget the $15/hr minimum wage a certain somebody will take credit for.  Should be $20 with steady QE to companies as they need it but that’s another convo.

A lot of people are going to get hurt when the inflation really takes hold then, but based on that, it’s probably STILL early to not get left behind.  I say if nothing else, at least buy a frickin house, even at 5-6%.  

What say you?  Where do you like parking money moving forward?

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I'm parking a bit in gas pumps from Texas to Canada. I'll also be depositing in state and federal accounts through the national park system, BLM, and state parks. I'll be supporting local businesses including guides, restaurants, grocery stores, brew pubs, wineries, distilleries, golf courses, music venues, and miscellaneous.

One place I will NOT be parking any money - Guaranteed Rate Field. Plus, without my usual compelling reason to visit the birth land of my be ancestors, I will remain in our migratory range of Lake County. My usual $1,000 day in Chicago will not happen. Yo, local merchants of Chicago, Tony is costing you money. 

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On 3/19/2020 at 1:18 PM, he gone. said:

there is a longer term risk to consider, over and above the tactical. Central banks are central banks for a reason, they are supposed to sit (hide) behind commercial banks, so that the commercial banks take all the risk - not them. But the opening and widening of FX swap lines means that the central banks are now taking on foreign currency credit exposure - that is, the credit risk of the other central banks due to currency mis-matches. And the prospect of direct financing of corporates means that central banks are starting to take on genuine corporate credit risk. All in all, central banks balance sheets are becoming riskier to accommodate the de-risking of the private sector. But what happens when everything blows up again? Do central banks literally go bust?

 

Either they do and we worry about the integrity of fiat currency systems, or they dont because they print money to cover losses (effectively in collaboration with sovereigns, as they remit losses back to them, contributing to fiscal deficits, which in turn need more central bank financing) Either way we worry about the integrity of fiat currency, or inflation. Therefore attention starts to turn to alternative currency regimes, whether gold, or digital, or all of the above. "

My working theory continues to be this. 

I also tend to like the Dollar Milkshake Theory (Brent Johnson) and think a lot of what Peter Zeihan has to say is very intriguing about demographics, geopolitical issues, etc. 

Unfortunately i think we have a lot of room down before stabilizing, tend to think the worst is probably Q4 and Q1 2023 post- harvest. I also think the US comes out pretty well in any scenario, but top of the new normal may not be even be the levels we are now. 

Now all of this can change on a dime ... as you mentioned Fed has ability to pause the collapse with more money printing and QE but that just kicks the can down the road. It has to be dealt with at some point. I think they probably do half the job here and quit after they get inflation down a bit, i.e. their best attempt at a soft landing.

Gold is probably the asset best here. REIT's do okay in stagflation. Cash flow, boring companies. But I'm not looking to catch knives. I'll sit on cash until post harvest. too much posturing around Taiwan. too many issues that need to be resolved and haven't been yet.  

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25 minutes ago, southsider2k5 said:

And Crypto is just getting destroyed.  Hope there are a lot of long term holders out there in both stocks and crypto, because there is no sense in selling now.

 

😳 

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4 hours ago, Texsox said:

I'm parking a bit in gas pumps from Texas to Canada. I'll also be depositing in state and federal accounts through the national park system, BLM, and state parks. I'll be supporting local businesses including guides, restaurants, grocery stores, brew pubs, wineries, distilleries, golf courses, music venues, and miscellaneous.

One place I will NOT be parking any money - Guaranteed Rate Field. Plus, without my usual compelling reason to visit the birth land of my be ancestors, I will remain in our migratory range of Lake County. My usual $1,000 day in Chicago will not happen. Yo, local merchants of Chicago, Tony is costing you money. 

I'm not understanding this part. Do you mean you'll be donating to these things?

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2 hours ago, he gone. said:

My working theory continues to be this. 

I also tend to like the Dollar Milkshake Theory (Brent Johnson) and think a lot of what Peter Zeihan has to say is very intriguing about demographics, geopolitical issues, etc. 

Unfortunately i think we have a lot of room down before stabilizing, tend to think the worst is probably Q4 and Q1 2023 post- harvest. I also think the US comes out pretty well in any scenario, but top of the new normal may not be even be the levels we are now. 

Now all of this can change on a dime ... as you mentioned Fed has ability to pause the collapse with more money printing and QE but that just kicks the can down the road. It has to be dealt with at some point. I think they probably do half the job here and quit after they get inflation down a bit, i.e. their best attempt at a soft landing.

Gold is probably the asset best here. REIT's do okay in stagflation. Cash flow, boring companies. But I'm not looking to catch knives. I'll sit on cash until post harvest. too much posturing around Taiwan. too many issues that need to be resolved and haven't been yet.  

Man I’m just not confident we can last into the new year without heavy QE.  I’m not even sure it can last until Sept/Oct 

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Dow 25,000

S&P 2,700 - 2,900

Those were my guesses 6 months ago. 

Humans and markets will survive. Just washing out the excess. Good thing in the end. Not many people have had to live a hard life in the US over the past 30-35 years. The demographics, technology, globalization, liquidity, etc. were all massive tailwinds. That's not necessarily the case move forward. The Putin move was as much about the dollar, demographics, etc. as it was about land. There's so many more questions marks ahead surrounding Taiwan, China, Korea, Japan, European Union, Africa, etc. etc

Past crashes were more insulated and less volatile because there wasn't as much excess liquidity in the system. if this thing get the band-aid ripped off it'll be bigger than 2008 - it's ramifications now include a more global economy and more liquidity intertwined than ever. If you were to look at a chart of the Dow or S&P and zoom out 30 years you'd see the massive uptick in trend starting in 2008-9. Unfortunately that has a chance of being unwound. But as you said, "i'm not sure if they can last to sep/oct". it's not a free market. it's a fed market. it's a frankenstein market. I tend to agree with you there that they may not let it get as bad as it should and step in and kick it down the road another 3-5 years. But each kick down the road is shorter and shorter. eventually it has to be dealt with (or created CBDC and change the rules of the game ... based on the track record, i think changing the rules is a very real possiblity) 

 

 

 

Search Peter Zeihan in Spotify or Apple and give a podcast a listen. It's worth the hour. Also has a book coming out tomorrow. 

 

Edited by he gone.
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Those NFT’s and SPAC’s aren’t looking all that great right now…irrational exuberance version 3 or 4.

It’s going to be a huge wake up call for those under 35 coasting along with massive gains due to excess liquidity chasing diminishing returns…they were in the right place at the right time, but likely not as brilliant as thought.

Now all the leverage is turning against.

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16 hours ago, caulfield12 said:

Those NFT’s and SPAC’s aren’t looking all that great right now…irrational exuberance version 3 or 4.

It’s going to be a huge wake up call for those under 35 coasting along with massive gains due to excess liquidity chasing diminishing returns…they were in the right place at the right time, but likely not as brilliant as thought.

Now all the leverage is turning against.

Baby boomers have entered the chat ...

haha. it's quite literally the same. they've found themselves incredibly rich based on excess liquidity, globalization, and demographics for 30+ years now. A lot of baby boomers walking around like they weren't just incredibly lucky to be around at the right time. 

 

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On 6/13/2022 at 10:04 AM, southsider2k5 said:

And Crypto is just getting destroyed.  Hope there are a lot of long term holders out there in both stocks and crypto, because there is no sense in selling now.

 

Trying to figure out if I should buy soon or not. If it keeps going down I may jump in. Anyone have any advice?

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4 minutes ago, Bob Sacamano said:

Trying to figure out if I should buy soon or not. If it keeps going down I may jump in. Anyone have any advice?

This stuff is insanely volatile.  We are down somewhere between 70-90% on the main ones from the highs.  Find something that interests you and that you aren't counting on a return from quickly.  Now is as good of a time as any.  Sure you might see some downside still in the shorter term, but once  it breaks out, you will wish you bought at these levels.

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9 minutes ago, southsider2k5 said:

This stuff is insanely volatile.  We are down somewhere between 70-90% on the main ones from the highs.  Find something that interests you and that you aren't counting on a return from quickly.  Now is as good of a time as any.  Sure you might see some downside still in the shorter term, but once  it breaks out, you will wish you bought at these levels.

I guess my next question would be which kinda crypto to buy. I know of Doge (which I actually bought at one time and sold quickly because I was sick of watching the .000001 changes). I wish I held onto that one for when it really took off.

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3 minutes ago, Bob Sacamano said:

I guess my next question would be which kinda crypto to buy. I know of Doge (which I actually bought at one time and sold quickly because I was sick of watching the .000001 changes). I wish I held onto that one for when it really took off.

I have a mix of bitcoin, etherium, shiba inu, and Ren right now.  Etherium is probably the one I believe in most as it has the most practical applications going forward.  Bitcoin has a real scarcity thing going for it.

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Vanguard on crypto:

Quote

We always go back to what we see as our enduring investment principles. And they go to basically investing in stocks, bonds, and cash. And, ultimately, the challenge we have with cryptocurrency is that it doesn't really have an intrinsic value. It's more of a speculative asset class. And so on the one side, again, it doesn't fit from an investment perspective, but the technology behind it is quite compelling. We actually use the blockchain technology today when we get our index data from one of our major providers because it's more efficient, it reduces risk, it just makes a more operationally attractive way of receiving index data. So, again, the technology we think has a lot of value and merit, but, again, investing in crypto, we think that's more of a speculative asset. We don't think that's a great way to construct a long-term portfolio for clients.

 

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2 hours ago, Bob Sacamano said:

Trying to figure out if I should buy soon or not. If it keeps going down I may jump in. Anyone have any advice?

Generally crypto is not a V shape recovery. You have some time to make a decision. That applies to the market in general. There are very few indicators that are positive on the horizon. Take your time, do you research, build conviction and buy in small tranches instead of all at once. this allows you to catch rounded bottoms instead of trying to time the market. As liquidity continues to dry up it's going to hit the speculative assets the most and put premiums on the necessary items. That's why in times of recession you see equities dip relative to commodities, things with real world value. i.e. you can't live off of stocks, but you can off durables. 

I would recommend listening to Real Vision crypto which is free. They interview a whole host of creators and analysts in the space. This should provide some context around many of the popular assets and their thesis. 

For me? I only hold bitcoin. I sold all my other alts during December/January. Rule of thumb is Bitcoin is king. if it fails, it all fails. if it succeeds, it all can succeed. I'd also push the thought process of "explain this asset to me in 3 sentences". If you can't readily give a response on what the asset does or what your thesis is, you should probably go back and research. 

Bear markets like this will last 12-36 months. We're maybe 6 months in. So much of crypto will depend on liquidlty in the marketplaces because people will not be speculating when they're trying to put food on the table and gas in their cars while worrying about their job prospects. 

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also as a rule of thumb drawdowns are 80%+ in bitcoin and 90-95% for alt coins. 

Ethereum, alts, and bitcoin will have another waterfall leg down. You'll be able to buy bitcoin sub $20k (personal guess in that $15k range) and ETH in that $600-800 range. 

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This week's turmoil signals potentially systemic issues. Investors often peg stablecoins as essential to growth in the sector, but belief in their viability is being tested.

Terra's collapse shows how these tokens can have all the risk of crypto without any of the upside.

Now, people are realizing there is nothing to back up the value of these tokens other than the hope that there will always be more buyers than sellers — a bleak rationale to rely on during a full-blown bear market. 

The move in crypto feels different this time. Rather than being sparked by an offhand comment about more regulation or a temporary skittishness among investors, this week's sell-off has roots in the underlying mechanisms of the market, which appear to be faltering.

 

yahoo.com/finance

 

Bitcoin already tested 20,000 and has jumped back up a bit…if the 0.75% or 1% rate hike come, who knows what the overreaction will be.

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