/biz/ - Business & Finance

>>11709969
My responses:

>What will kick off the credit crisis?
Student debt and healthcare expenses. Student debt has risen exponentially since 2010 (pic related), and healthcare costs in the US are the highest of any first world (and will only get higher with a Republican congress). Soon, we will reach a tipping point where consumer spending begins to decline, thus impacting corporations, which will finally buckle under the weight of their massive debt. Once stocks tumble, pensions will follow, and they'll all beg the federal government for help. Because the US never learns from its mistakes, the gov't will of course bail out pension funds and further worsen the deficit (compounding by the 2017 tax bill), thus hurting treasuries. Corporate bonds and treasuries will both be cancer, stocks will shit the bed, and conventional institutional investors will be fucked from literally every angle.

>Will this incoming crisis rival that of '08?
Yes, purely because this event will, in one felt swoop, bankrupt several US companies and leave many with a "junk" credit rating. This worst of this crisis will not be limited to insurance companies and banks as it was in '08.

>What securities/investments would be useful in navigating the crisis?
CDSs, obviously. Crypto most likely, as even just the weakening of the dollar will have a net positive impact on conversion rates. Recession-proof and foreign stocks could help weather the storm. ILSs tied to natural disasters would add even greater diversity.

>institutions take us to 100k eoy, and then economic crisis in 2020 will take us to 1 million.

>>11709969
https://www.federalreserve.gov/releases/z1/20180920/html/d3.htm

>>11709969
is the federal governmen the source in this and it is consumer credit and student loans? what the fuck is this chart how can it look like this?

>>11709972
>Student debt and healthcare expenses. Student debt has risen exponentially since 2010 (pic related), and healthcare costs in the US are the highest of any first world (and will only get higher with a Republican congress). Soon, we will reach a tipping point where consumer spending begins to decline, thus impacting corporations,
true, add in the rise in rents over the past 5 years vs wage growth in most areas (some areas are totally crazy in the US in how much rent has risen over this time) and rising interest rates for anyone with adustable rate mortgages or new buyers making payments higher at the current prices when rates rise

>>11710750
That chart is the total supply of circulating dollars. The massive spike since 2008 is the result of quantitative easing. In other words, they printed more money.

When the government inevitably bails out pension funds and the economy sees money flow out of both stocks and bonds, the Fed will likely once again fire up the presses.

>>11711000
checked, I meant your chart though, what is it showing? the title is confusingly vague

>>11711058
I'm with you, what the fuck is this chart
>>11709969
showing? The title is word salad.

>>11709984
This is what most people don't understand. When retards like McAffee predict btc at $1MM, what they mean is that the USD is hyperinflated, not that 1 BTC will buy you a fucking mansion.

>>11709972
The trigger will probably be structured products of some kind, perhaps CLOs as regulations got relaxed when Trump stepped in and now CLO sellers have no legal obligation to hold a percentage of the product they sell. CLOs are on track to a record breaking year >150B issued perhaps. That means the size of the structured products market is likely in the trillions again, and the Fed raising rates so fast isnt helping. You can see a shock erupting in Seattle markets as inventories pile up and homes are no longer closing 7%+ above listing price but 3% below. San Francisco, Dallas and other hot markets will get the same treatment sooner or later leading homebuilders to higher losses and possible bankruptcy.

Anyways most of the CLO issuance is tied to startups and companies with shitty balance sheets like fintech, homebuilders, commercial real estate developers, and RIETs so any slowdown in any part of the economy, especially real estate and tech will tank these products.

Now with that being said, it isnt clear that large scale defaults will happen in tech because of Chinese/Saudi/Japanese inflows but the moment it seems like foreigners are less willing to buy treasuries so perhaps they are slowly trying to avoid the US tech sector too. The October scare in tech might have opened their eyes, and if those loans cant get rolled over, then just like when the originators of home loans couldnt secure financing in 2007, the economy will start to collapse.

>>11709969

Student debt will be the trigger.

>>11711294
They wont help but they wont be a trigger. You dont have to pay your student debt if you dont have money. But when a company has debt, it has no choice...

>>11711058
It’s a chart of the total amount of debt from 3 sectors: treasuries, student loans, and consumer credit. I actually meant to post a chart of just student loans, which looks similar to the one I posted.

>>11711316
So they'll dilute the dollar, this should in theory actually send us into a miniature hyper inflation where property values actually go up, etc right? And a big Mac will cost ten bucks (sorry sergey), and your cash savings are jack shit. There really seems to be no safe haven that isn't in tangible assets

corporate bonds, for example when yields spike there's more worry for tesla & their stockholders. notice how outlandish elon was acting when their bond yields were volatile. you could tell he was sweating.

that and housing bubble, which is connected to over-inflated tech company valuations for faggot apps and websites that people are starting to hate. if you didn't get rich off the 2009-2017 bull run you're going to face a lot of pain in 2019-2020, assuming you're not already getting JUST'd right now this year.

>>11711312
Read an article insinuating that the corporate debt bubble is a mirror of the mortgage bubble. Corporate valuations are growing recklessly and companies keep issuing new debt to refinance and buyback more shares, thus further propping up valuation.

Also, when going bankrupt as a person, not only do student loans remain, but you’re monitored in such a way that you cannot simply be a normal consumer. You’d be relegated to renting permanently and shopping at discount retailers.

I don't see how student loans would trigger a market-wide crash no matter how big they get, since they tend to be guaranteed by the federal government or owed to the government. It's not like the typical crash where you have a shitload of entities who are all exposed to some asset that suddenly becomes toxic and nobody will buy it.

>>11711345
>miniature hyper inflation
Your mom is just a little pregnant? When true hyperinflation proper hits, pricing anything is useless in fiat. Litterally try to wrap your head around that for a minute. It is quite a redpill to think that we've structured our entire lives around the almighty dollar and then one day it is not reliable as value anymore.You begin to realize how fake current prices are, and begin to wonder what real wealth means.

>>11711363
I was moreso referencing students loans mitigating the buying power of individuals, which would thus reduce corporate revenues and thus cause the barrage of corporate debt recently issued at ridiculous valuations to be deemed junk.

The market for student debt popping wouldn't do anything. But student debt, credit card debt, healthcare costs, and stagnant wages are all creating a scenario where the average person's buying power decreases, and that's what will turn corporate bonds toxic.

>>11709972
Which CDS's are you looking at?

Do you think we will experience hyperinflation after the next set of bailouts?

You should join Euclid's Coin Window on Telegram

>>11711436
CDSs on corporate bonds.

Also, people that think a company like McDonalds is "too big to fail" despite it tripling its debt in 5 years while its revenues have been stagnant/declining are fucking mad. Leverage is like cocaine.

>>11711434
Ah, right. That makes sense.

>>11711454
Define:CDSs

>>11711631
CREDIT DEFAULT SWAPS I WIN I WIN. Eat my dust, cunts.

>>11711346
I am planning on shorting corporate bond ETF's.

>>11711654
By what means? I was thinking WYDE.

>>11711672
2020 puts on one of the ETFS

>>11711719
Not bad. I'm too much of a pussy to commit to a year. People have been calling this crisis since 2014.

>>11711400
Checked. Yeah my analogy was dumb but I didn't have a better way to phrase it, I don't think it'll be like Venezuela but it can be bad. Which CDSs are you guys eyeballing? For banks and shit?

just give it to me straight - will my student loans ever be forgiven?

>>11709972
You sound smart and I like what you say, please keep doing it

So when will the Holocaust happen for real this time so we can get off this kike debt slavery?

Thanks for your time anon. Very interesting info.

>>11709972
>as even just the weakening of the dollar will have a net positive impact on conversion rates

Damn, never even thought about it that way.

>>11711929
Since you are mortal and will one day die, yes.

>>11712282
Not necessarily a good thing though.

>>11709969
IMO the thing that will trigger the whole thing will be sub prime auto loans. The vast majority of new cars have been sold on PCP for the last 10 years or so and have been sold on to banks in the same way that mortgage CDOs were prior to 2008. Plus the fact that when interest rates go up the first debt stupid normies will default on will be their car payments

>>11713996

My buddy just bought a brand new Toyota SUV, the goddamn thing cost $35 grand. You can buy a trailer and a lot for that

how will europeans be affected by the us shitting the bed?

>>11715489
Like in 2008. However, the banks that are exposed to the US economy will take a fucking hit, like DB.