/biz/ - Business & Finance

[Anonymous No.17914600]

I'm a... I'm getting a little worried bros...

[Anonymous No.17914683]

>>17914600
...checked

[Anonymous No.17914710]

>>17914600
i have 18k link stack
feeling comfy and laughing at these boomers losing their money

[Anonymous No.17914777]

>>17914600
me too anon. we are due for a relief rally pretty soon.

[Anonymous No.17914820]

>>17914600
>hand rubbing intensifies

[Anonymous No.17915195]

>>17914600
I've been a player through three major asset bubbles now: the late 1990s dot-com bubble, the 2000s housing bubble, and this current bubble. After the 2000 housing bubble that led to the 2008 bust, a once in a lifetime event that many people would typically never experience in their lifetimes, I thought I would be ready for when this bubble burst. I have minimized my risk (very few equities, a good deal of cash and cash hedges) even before this downturn but this market is again behaving unlike anything I've ever seen or expected. Today is yet another day where nothing works: stocks are down, USTs are down, precious metals are down. The only place where you can make money is FX trading and shorting, which requires you be very quick or risk getting trapped in a short position by the government when they freeze the market, spray a lot of free money, and then blow you out.

The majors indexes are only about 33% down from their all time highs and my expectation was that they would fall 60% or more from their all time highs. I have been fortunate in that I have had an iron hand on my cash and have refused to buy any of this dip. Nonetheless, even with my relatively strong position, I am starting to get worried and we're only 33% down. I have no idea what kind of mayhem will come if this bear cycle truly completes itself.

[Anonymous No.17915459]

>>17914600
PETER, MY GOOD MAN

[Anonymous No.17915514]

>>17915195
if you've been through so many cycles you know that the mayhem will be the spectre of hyperinflation. they will try to print their way out of this. with the USD being the world's reserve currency, this may spark a crisis of confidence.

there is only 1 asset that is neutral to all sovereigns. gold is savings. it's also an outside bet on an economic reset.

[Anonymous No.17915755]

>>17915514
Precious metals are my hedge against a currency crisis and I have a lot. It's not working too well right now, however, which doesn't surprise me. What does surprise me is that equities and USTs are falling at the same time in large percentage moves. I suspect this is going to totally blow up the system because so many hedge funds are levered up on USTs running the risk parity strategies.

[Anonymous No.17916192]

>>17915755
not really following you here.

UST yields fall because people are seeking a safe haven. high demand induces a lower yield because the gov't can now issue into a demand storm. and you know pension funds are mandated to allocate X percent on "safe" gov't debt. the more the market expects negative rates the lower the yields will go. the US has been in a bond bubble since basically the 80s. buy bonds now because the yield will be lower later. at least you are "protecting" your wealth. not really but whatever.

equities are falling because everything is risk off. and it should be because the market has been overvalued for for the last 10 years. only genuine morons believed that buying SPY was a good idea.

i'm still waiting for more downside before buying. been in all cash/gold for 5 years now.

[Anonymous No.17916336]

>>17914600
>>17914683
>>17915459
Why is Pete so based?

[Anonymous No.17916355]

>>17916192
I'm saying that UST bond yields (bond prices are rising) are rising even though stock prices are falling. This means that stocks and bonds are both being sold. There are most certainly instances in history where this has previously happened since stocks and bonds are not truly anti-correlated. However, the anti-correlation has been quite strong for many decades and has been especially strong since the 1990s.

[Anonymous No.17916588]

>>17916355
>UST bond yields (bond prices are rising) are rising
Damn it. I meant to type: Bond yields are rising and thus bond prices are falling.

We are in a situation where despite all the QE and re-entry into ZIRP, bond yields are rising (bond prices falling) and stock prices are also falling.

[Anonymous No.17916689]

>>17916355
>>17916588
have a look at these slides. made by someone much smarter than me. it basically shows that stocks/bonds have a positive 10 year return correlation.

it may be possible to survive this crisis but the coming pension/demographic cliff that approaches globally means financials will get slaughtered.

[Anonymous No.17916999]

>>17916689
Thank you.

I am quite well read on much of the economy and financial theory as well as their history. What troubles me is that markets are behaving in a way that is very unlike any other recent financial crisis.

Long-term correlation of stocks and bonds positive and that should be obvious. Stocks, generally speaking, go up over a long investment period. Bonds pay a coupon and thus, nominally, go up over the tenure of the bond.

Anti-correlation is what is typically seen in shorter timeframes. In bear markets, USTs typically go up as stocks go down. This was most certainly true in 1929, 1990, 2000, 2007.

USTs are still up for the year but their behavior against equities is troubling. We could be in the crisis where the Fed loses control of the bond market and all hell truly breaks loose. I suspect gold will do well in that scenario but there are a lot of very bad things that will accompany such monetary chaos.

[Anonymous No.17917309]

>>17916999
you say "bad". i say necessary. the US has been using it's exorbitant privilege as the world reserve.

"it's our money but your problem" - that's finally going to come home to roost.

i really don't think world trade can work in the future without neutral reserve asset backing. gov'ts worldwide are sick and tired of the weaponized dollar. the more bilateral trade agreements we see the dimmer the future for the USD. the upside is the US does still claim the world's largest gold reserves.

[Anonymous No.17917631]

>>17917309
I have no quarrels with the US losing its exorbitant privilege. It's both a blessing and a curse. A blessing in that it afforded the US a higher standard of living than it deserved once it went off the rails around the time of the Vietnam war. A curse in that it is tremendous power, which attracts the wrong kind of people and corrupts even good people.

As for gold reserves, it's likely China has more gold than the US and perhaps Russia does, too. When you add in the amount of gold citizens hold, it's possible that India has more gold than the US, too. Of course, there's no telling how much gold is held in private hands in the US. Maybe I'll be surprised.

We're still in reasonably good shape in the US due to our location and we are blessed with bountiful natural resources. I also have a fair amount of confidence in the American ethos, where if we can no longer import those things we refuse to make because it's easier to shuffle money around, we can tool up reasonably quickly to start making things again. And American ingenuity and entrepreneurship will like still lead the world. But we have to kill the rentier class, they've run roughshod on this country and its economy for far too long and their system clearly doesn't work to create a sustainable society.

[Anonymous No.17917787]

>>17916336
what is this nigga even doing all the time? Just posing for the cameras?

[Anonymous No.17917836]

Did 20k just turn into a resistance?!

[Anonymous No.17918597]

>>17917631
>have to kill the rentier class,

rentier class is pretty broad. for example there are only 3 concrete plants in my area i know of. let say i have all the operating capital needed to build and all expenses paid for the the next 3 years. now what? nothing. because i would still have to staff the plant. there's only so much personnel available.

what the world is now facing is a structural deflation. less demand due to less population. africa doesn't count because it takes 20 africans to equal 1 westerner's resource usage. that pie is getting smaller. all projects in the past that relied on debt to succeed, did. because debt implies a future larger than the value of the debt.

with the explosion of energy usage, the world has seen incredible changes in the last 100 years. and the ones at the very crest of that wave profited and established enduring organizational structures. and i have no idea what it will take to overcome that 100 year advantage.

the next 10 - 15 years will be very interesting as globally all will have to face a slow/no growth world.

[Anonymous No.17919551]

>>17918597
No, rentier class is very specific. It means landlords, money lenders, people who shuffle paper around, land speculators, etc. And, no, I'm not talking about Jewish people. These kinds of ways of making money will always exist and some actually serve a useful purpose. However, they should not be given primacy over the production economy.

The banks were bailed out in 2008 at the expense of the production economy. Student loans cannot be discharged through bankruptcy because of the lobbying power of the rentiers. There were massive quantitative easing programs enacted since 2008 to reflate the housing bubble because the investors in the mortgages were bailed out at the expense of people who work for a living to buy homes they can afford on their wages.

The classification of rentier has been around for hundreds of years and allowing a nation to be controlled by rentier interests has been documented throughout history to ultimately be bad for the nation.

Growth will not necessarily be slow in the future. The elimination or limiting of rent-seeking behavior will free up consumption for other things. One of the reasons for low population growth in the western world is the fact that working class people cannot afford children unless they want to be welfare trash.

Look at the very wealthy people in the US and you'll see that most have 2 children. A surprising number have 3 or more children and I'm talking about children sired by the same mother and father.

What if today's college students who are terribly burdened by college debt got the same deal the Baby Boomers did, when college tuition was $100/year, ~$1,000 today in inflation adjusted dollars? Not only that, for the elite colleges, Boomers got very low interest loans from the government that were dischargeable through bankruptcy, which many Boomers did strategically but did not allow subsequent generations to do.

Young peope would marry and have children sooner without the burden of debt.

[Anonymous No.17919591]

>>17917787
Yes. He never owned a piece of stock in his life.

[Anonymous No.17919606]

>>17914710
could have had one if I sold :'(

[Anonymous No.17919927]

>>17918597
>>17919551
Most interesting conversation I've seen on /biz/.

[Anonymous No.17919947]

>>17919927
Bump

[Anonymous No.17920010]

>>17915755
Risk parity hedgies have already shot their wad and faced the music

[Anonymous No.17920211]

>>17919551
Tbh, boomers have enabled this while situation and destroyed the US legacy and birth right for subsequent generations. Their greed and reckless consumption is unparraled in history and shockingly they are oblivious to all of it. They also have no sympathy for younger generations. Now they will smite the heritage gifted to them in a final blow leaving their progeny to navigate the shambles boomers created for most of our remaining lives. It makes me sad to know the boomers, et al. will be exterminated by this disease, but it is the only way to move forward that I can see. They must release their wealth to younger generations so we can build a new world as soon as possible. However, I fear it may be too late and my only lasting hope for this new world is that crypto can actually help shape it.

[Anonymous No.17920332]

>>17919927
This

[Anonymous No.17920341]

>>17916336
TUCHMAN HEADS WHERE WE AT????

>>17917787
He works for Quattro. But the exchange is mostly a background set for financial news these days.

[Anonymous No.17920473]

I don’t think there’s any more room for not considering we may be underestimating the importance of beginning to start the process of mulling over the conceptualisation of starting to worry, and the time to do it is very soon.

[Anonymous No.17920555]

>>17920341
>>17916336
Every time

[Anonymous No.17920589]

>>17920555
Checked

[Anonymous No.17920735]

>>17920555
You had to check Wikipedia to know “Tuchman” was germano-jew? You gotta fuck off back to where you came from.

[Anonymous No.17920860]

>>17919551
gonna disagree with your narrow definition of rentier. basically i see all rentiers as deriving income from assets that now become very difficult to accrue by an average person.

you can accumulate rentier income via technology patents/royalties for example. improving the technology is no longer required for you have income each year.

you would like to see elimination of rent profiteering. i don't see how that's possible given that old money owns most of the valuable real estate. any distressed real estate is now bought by private equity funds. entire funds exist solely as RE management companies nowadays. and all those funds do is further enrich the 0.1%.

perhaps the ancient civilizations were right to have debt jubilees. because contract law makes the modern world what it is. no way to discharge the debt unless by grace of the lender. but one person's debt is another's asset.

[Anonymous No.17920937]

>>17917787
Yes actually, they’re not real traders

[Anonymous No.17921127]

>>17920860
My definition of rentier is a textbook definition. It is not too narrow. Businesses that are capital intensive have a moat, to use Buffett's terminology, but that is a barrier to entry, not rent extraction. A capable and persuasive entrepreneur can find investors to enable him to launch a company that has high startup costs.

Patents and royalties are a form of rent seeking but they require the creation of something. To be certain, patent and copyright law has been terribly corrupted such that a lot of it has become a pure rent seeking activity with no value created. That should be stopped.

As for elimination of economic rents, it's relatively easy. For land, property taxes with no funny exemptions does a good job of keeping prices in line. For people who speculate on land, a tax that takes away all the speculative profit will kill land speculation. I'll give you an example of land speculation before someone cries that I'm anti-capitalist. When it was rumored that Amazon was going to have an HQ in Long Island City, all the faggot land speculators started buying houses in LIC in hopes of flipping them at a profit to the new Amazon employees who would go there. That profit should be 100% taxed away. You get similar such jumps in land prices when people speculate that a subway stop will be created in a neighborhood.

One other way to reduce rent seeking activity is to not give it special privileges. Carried interest is taxed at the capital gains rate instead of the earned income rate and is exempt from FICA taxes. When a bank goes bust, the bank executive and shareholders are bailed out but if something like Toys 'R' Us goes bust, everyone loses his shirt and job.

And Toys 'R' Us went bust because of rent-seeking activity where PE firms borrowed a ton of money, bought Toys 'R' Us, paid themselves a huge dividend, and then floated new shares in a heavily indebted company.

[Anonymous No.17921248]

>>17921127
That's rentiers hollowing out the production-consumption economy and it can be limited or controlled through taxation or strict regulation; i.e., regulations that are actually enforced. The rentiers were already out of control in the 1980s and early 1990s but they were totally turbocharged when Bill Clinton repealed Glass-Steagall through the Gramm-Bliley-Leach legislation.

For over 70 years, Glass-Steagall protected us from the bullshit that ultimately resulted in the bailout of the financial industry. Meanwhile, billions of dollars of bonuses were paid out and never returned. One of the worst companies, Bank of America, was utterly bust and was still paying out multi-million dollar bonuses.

I've worked in the production-consumption economy my entire life and when the company didn't make money or, heave forbid, was bankrupt, there were zero bonuses nevermind bonuses paid out without bailout money.

That's the kind of bullshit you get when you have rentiers controlling an economy. Ask yourself, why can't student debt be discharged through bankruptcy? Cui bono?

[Anonymous No.17921848]

>>17921127
>>17921248

your proposal for a spec tax is reasonable. however, that merely enriches the gov't. and gov't is the biggest con of all.

let's go back in time a bit.

caesar undertook many loans that nearly bankrupted him. he actually had to conquer new territories to pay for his armies. because way back when, the roman republic required consuls to at least partially fund an army.

caesar was backstopped by crassus. a man history remembers as possibly the shrewdest/slimiest landlord in rome. basically he had a private fire brigade and would offer to hose down your house. because the state at that point did not have a fire department. it would be for an outrageous price. you would refuse. he would watch the house burn down. and then he'd tell you, your house is now worthless. but i'll give 5% of what it was worth before, deal? you would be overjoyed and accept. and so crassus built an RE portfolio. caesar you cheered for. crassus you paid rent to.

crassus guaranteed a number of loans that caesar undertook. they eventually formed the first triumvirate with pompey. ironic. given that caesar was for the "people". but he ushered in the era of imperial-monarchic rome.

as they say, money is power. it was never different in history. and it is not any different in the modern day.

for what purpose will lawmakers change the books today? for they benefit most. the average person has no reason to question the system. it still works reasonably well.

i can only see one trigger: the pension system will be brought to its knees as the number of payer receipts into the system is not able to provide promised benefits. most people have nothing saved for retirement. SS has become the retirement plan when it was meant to be a only a supplement. you're gonna have a lot of angry people. and then we get communism.

and you still haven't told me how we get the the prime RE from the old money.

[Anonymous No.17921949]

>>17921848

in my city, i have a competing business that owns their property. i lease mine. i'm relatively young and not that well off. i really can't afford payments on the $1.5 million my property is assessed at.

the competitor recently sold his property for $18 million dollars. that family bought it for $50 000 in the 60s. roughly $500k in today's money. that a generational windfall. nobody can choose what time period they are born in.

how am i ever going to get the juicy RE. it's a game that can only be played if you're already worth tens of millions. so instead i acquire small businesses that have established cash flow and build them up.

[Anonymous No.17922503]

>>17921848
>and you still haven't told me how we get the the prime RE from the old money.
Firstly, you are absolutely correct that having government tax away things is troublesome because then they get to play with the money. However, the difference is that the voters should have some ability to force government to do at least something marginally useful with the tax revenues. It becomes even more feasible if the government is more decentralized, more along how Switzerland is run or how the Founding Fathers imagined how the US would be.

As for how to get the prime real estate from the old money, you know the answer: a confiscatory inheritance tax. Maybe we have a $10M exemption for each heir, indexed to the lowest measure of inflation (Social Security, CPI, PCE, GDP growth, or whatever). What this prevents is a dynasty of eternal billionaires.

Ultra wealthy Americans who don't trust the government to use the oney wisely can follow the example of the great Andrew Carnegie and wisely put their wealth into things that will benefit future generations of this country. And no bullshit "Giving Pledge" foundation trash.