/biz/ - Business & Finance

[Anonymous No.49527399]

AHHHHHHHH

THE BOND YIELDS ARE 0.1% FROM INVERSION POINT

[Anonymous No.49527441]

Nothing new. It already inverted like 2 months ago for a few hours.

[Anonymous No.49527507]

This time it's different.

[Anonymous No.49527631]

whats inverted mean

[Anonymous No.49527649]

>>49527507
can someone explain this to me like im a retard

[Anonymous No.49527711]

>>49527649
>>49527631
Typically short term bonds have a lower yield than long term bonds, as you can see on that graph. However, you can also see around 2001 for example that the shape of the line changes and curves the other way, indicating short term has a better yield than long term.

This is almost always followed by a recession.

[Anonymous No.49527756]

>>49527399
didnt we already invert and literally nothingberg?

[Anonymous No.49527833]

>>49527756
It isn't a direct, immediate trigger. The general trend is within 2 years a recession. This one will be faster but not literally the day of. Same with eurodollar futures curve inversion, Grantham's "impending doom" indicator, etc.

[Anonymous No.49527856]

>>49527833
wait so is the recession going to kill the next crypto bullrun?

[Anonymous No.49527864]

>>49527833
>Within 2 years
I don't know how to tell you this bro, your indicator is utterly fucking worthless.

[Anonymous No.49527892]

>>49527864
I don't know how to tell you this bro, you're totally not bussin' and your understanding of finance is cap frfr

[Anonymous No.49527915]

>>49527864
>If your engine warning light indicator shows your engine is close to exploading it’s worthless as the engine doesnt explode within 10 seconds of the warning light coming on

Zoomies literally have fried dopamine receptors

[Anonymous No.49527933]

>>49527864
this
Actual econ teacher here.
Most indicators are stupid and made up.
Literally astrology.

I teach most of my students that policy has little impact on economics and it's entirely created from individuals and corporations and their decisions.

For example gas prices is entirely created by the stupid fucking companies.

We enter recession because of a few greedy old white men, nothing more.

[Anonymous No.49527991]

>>49527856
There is A LOT more than just the inversion of the 2s and 10s which occured. Right now what is happening to crypto is Celsius is going insolvent. Other than that, the eurodollar futures curve inverted last year, Grantham's indicator triggered, South Korea triggered 5/5 of the Bank of International Settlements' recession indicators. China and multiple other countries triggered 4. Evergrande defaulted on its bond payments and housing sales in their largest city are down 40% yoy with multiple other developers having defaulted since then. Savings in the US are lower than they were in September 2008 (Lehman) and consumer credit is shooting absurdly higher and delinquencies are beginning to spike. Reverse repos are at an all time high and repo fails are spiking which speaks to a liquidity crunch, described also by the dollar's performance against other currencies (it is mostly crushing everyone but the Ruble and Real) and recent action with the tanking of the Yen. There is an opaque area in credit markets called "buy now pay later" which is basically like today's ninja loans which we can only see a percent of but providers are getting SLAUGHTERED in the market, and delinquencies here are rising. Demand destruction has set in and large retailers are getting slaughtered in the market. Celsius is currently going insolvent and literally immediately after UST died, USDT began "coincidentally" hosting P2P USDT lending offering 30% and within a week of that, dumped $10B in marketcap from large redemptions-milking retail for liquidity and existing liquid assets. Stablecoin regulations requiring reserve audits will temporarily send the market to oblivion when Tether is squeezed and idiots who hold it will be left holding worthles Chinese commercial paper and probably El Salvadoran bond fractional value. Literally so much more. We are entering something bigger than GFC. Every asset class will crash, especially crypto. But regulatorily secure utility will come back.

[Anonymous No.49528005]

>>49527933
>You don't teach economics.
>Go back to plebbit

[Anonymous No.49528017]

Only /biz/ can look at inverted yield curves and believe that inflation is here to stay. Absolute embarrassment.

[Anonymous No.49528019]

>>49527991
Celsius going insolvent is what is currently happenign to Eth btw. It may not happen imminently but it will happen soon

[Anonymous No.49528023]

>>49527507
What’s the significance of the line going lower and lower with time? Is it that yields are getting less and less in real terms due to inflation or something?

[Anonymous No.49528042]

>>49527892
Stfu kike.

[Anonymous No.49528053]

>>49528042
Stop trying to fit in.

[Anonymous No.49528060]

>>49527507
Nigger were 3 years on now. If you had shorted the market in 2019 you would have 100% roped by now

[Anonymous No.49528062]

>>49527864
this
>recession in 2 years bro
>JUST WAIT 5 YEARS BRO
>10 MORE YEARS TILL MARKET CRASH

[Anonymous No.49528063]

>>49527933
>old white men
You spelled jewish wrong.

[Anonymous No.49528068]

>>49528023
Yields are getting less and less in nominal terms (and even more so real terms) because the fed now keeps them artificially low to pump stocks. They no longer follow the natural supply and demand of money

[Anonymous No.49528071]

>>49527864

What are you talking about? Inversions are very good predictor of recessions. As good as anything in econ which is basically all astrology.

[Anonymous No.49528080]

>>49528068

This is completely wrong. The FED doesn't control interest rates. Economic conditions doesn't allow for high interest rates and the FED follows suit.

[Anonymous No.49528088]

>>49527933
>teacher
Fuck off
>gas prices has everything to do with corpos
Oh, really? Nothing to do with the FED printing over 40% of the current dollars in circulation in the past 2 years? I mean they basically doubled the currency supply. In what world does that not have an impact on purchasing power?

Kys keynesian, keynes even admitted that his studies would have come to very different results had he known of austrian school of economics beforehand.
Reason why keynesianism is popular and taught today is entirely because it is exactly what politicians want to hear and want people to believe to silently squeeze the purchasing power out of the pockets of common people. That because the average normie is way too dumb and ignorant to realise real losses. They just understand nominal losses and cant comprehend that 8% inflation kills your 5% pay increase and you still end up poorer.

[Anonymous No.49528102]

>>49528071
>something that never happened
>somewhat indicating anything
yeah, no

[Anonymous No.49528107]

>>49528023
The tendency of the rate of profit to fall means over time investing had lower and lower returns. We are now reaching the stage of finance capital having almost no returns

[Anonymous No.49528124]

>>49528088
>Austrianfag
Austrian economics is literally founded on principles like "evidence doesn't matter, if muh theory doesn't line up with reality then reality is wrong"

[Anonymous No.49528126]

>>49528102

Your post is completely incoherent.

[Anonymous No.49528129]

>>49527933
My PhD from an ivy econ prof thought that excessive money printing during the pandemic would not cause inflation, I fucking hate academia

[Anonymous No.49528132]

>>49528080
We all know you're wrong, let's skip the bit where you try to argue on a retarded technicality.

[Anonymous No.49528136]

>>49528124

That's all economics, not just Austrian. We've been running Keynes for 14 years and it doesn't work but noone cares.

[Anonymous No.49528138]

>>49528126
if something never happened before how can you know whats it indicating?

[Anonymous No.49528144]

>>49528023
The line has gone down because interest rates have been driven down to facilitate credit for assets and their owners to be propped up. This is central bank monetary policy, the means by which boomers created their generational everything bubble ponzi. A 10% interest rate today would immediately crash every asset class by an order of magnitude and drive the USG to bankruptcy in interest payments.
>>49528060
>what is the corona crash
You'd only have held a short through that if you were an idiot who didn't see the writing on the wall in March-May 2020 when interest rates got nuked, banks got to have 0% reserve requirements and US citizens were given helicopter money.

[Anonymous No.49528148]

>>49528129
TBF there were a few years of very slight deflation after the QE bonanza post 2008

[Anonymous No.49528149]

Yeah as if I know what a bond is, what a yield is, or what a curve is.

[Anonymous No.49528154]

>>49528132

You've all read in the paper that Powell is God but you haven't thought the matter through deep enough to provide an actual argument.
You are just parroting what other people have told you. It turns out that other people are wrong and you have gotten bad information.

[Anonymous No.49528159]

>>49528136
Austrians do it extra hard and have baked it into their system.

What we have isn't really keynesianism any more, neoliberalism/unending shock therapy is kind of its own thing

[Anonymous No.49528162]

>>49528138

We've had multiple recessions and multiple curve inversion preceeding the recession. This is not an ucommon phenomena. What is it that hasn't happened before?

[Anonymous No.49528165]

>>49528144
>my meme line predict the meme flu

[Anonymous No.49528166]

>>49528148
Because QE post 2008 was bailing out banks and mortgage lenders who were not extremely risk averse not chimps who immediately spend the $2000 cheque you sent them

[Anonymous No.49528167]

>>49528060
>3 years on
There was a liquidity freeze in the interbank lending market in september of 2019 and the FED immediately started printing like crazy. They knew that this was IT, and unironically one month later, (((covid))) magically appeared and shit down everything for the next 2 years, giving a „proper reason“ to double the currency supply to save „small businesses“, which magically (literally nobody could have predicted this) just made (((them))) richer. The sole beneficiaries of inflation and money printing are the political and economic elite.

[Anonymous No.49528181]

>>49528062
In 2008 the housing market took years to find a bottom even once the crash started. Economics doesn't happen to satisfy your sense of immediate gratification. It doesn't always take 2 years. It also doesn't mean prosper until then. We saw 8 consecutive red weeks from the dow which is the first time since the 1920s and seven from the S&P which is the first time since the dotcom bust. And several (virtually every) other indicators drive the idea it will take way less. Learn about what you are talking about before talking about it or get a new hobby. You will get wrecked counting triangles and talking about "muh extended golden bull run to the moon!" in the short term assuming a perfectly efficient market that happens within the latency of you cooming to porn and you will lose everything, be bitter as fuck, and act like it was unknowable the whole time. There is a reason these indicators are taken seriously and it has nothing to do with economists having less less ability to read technical analysis trend lines than your favorite youtuber. Lol

[Anonymous No.49528183]

>>49528124
Give an example, otherwise go back immediately

[Anonymous No.49528186]

How much of the yearly US Federal Budget gets eaten by interest payments if bond yields all go >4%?

I mean the debt is already at ~125% of GDP. Surely social security and welfare has to be abandoned soon?

[Anonymous No.49528203]

>>49527933
>Actual econ teacher here.

What the fuck did you just fucking say about me, you little bitch? I'll have you know I graduated top of my class in the Navy Seals, and I've been involved in numerous secret raids on Al-Quaeda, and I have over 300 confirmed kills. I am trained in gorilla warfare and I'm the top sniper in the entire US armed forces. You are nothing to me but just another target. I will wipe you the fuck out with precision the likes of which has never been seen before on this Earth, mark my fucking words. You think you can get away with saying that shit to me over the Internet? Think again, fucker. As we speak I am contacting my secret network of spies across the USA and your IP is being traced right now so you better prepare for the storm, maggot. The storm that wipes out the pathetic little thing you call your life. You're fucking dead, kid. I can be anywhere, anytime, and I can kill you in over seven hundred ways, and that's just with my bare hands. Not only am I extensively trained in unarmed combat, but I have access to the entire arsenal of the United States Marine Corps and I will use it to its full extent to wipe your miserable ass off the face of the continent, you little shit. If only you could have known what unholy retribution your little "clever" comment was about to bring down upon you, maybe you would have held your fucking tongue. But you couldn't, you didn't, and now you're paying the price, you goddamn idiot. I will shit fury all over you and you will drown in it. You're fucking dead, kiddo.

[Anonymous No.49528208]

>>49528166
>there were no stimmy checks post 2008
Adults are talking zoomie
>unironically running interference for banks
I take it back you're a glowie

[Anonymous No.49528217]

>>49528129
That is exactly what i meant in my earlier post >>49528088
That shit is blatant bullshit, but everybody is indoctrinated nowadays. Even in ivy league stuff like austrian school is at most barely touched as a subject. Thats not even because your professors knowingly lie to you, but simply because this shit has been going on for so long that your profs probably don‘t even know better.
Its always easier to tell everybody what they want to hear instead of the truth.

[Anonymous No.49528228]

>>49528062
>>49528102

[Anonymous No.49528230]

>>49528183
Praxeology is one of mises' founding principles, and it literally means what I said

[Anonymous No.49528236]

>>49527507
When are we going to make the people in charge responsible for their actions? I'm so sick of their incompetence or outright malice. What is this bullshit talk from Yanet that this might be the first time that the inversion wouldn't lead to a recession?

[Anonymous No.49528255]

>>49527933

>econ teacher can't see the forest for the trees

Well, would you look at that

[Anonymous No.49528261]

>>49528165
>meme line predicted the flu
I dont know what to tell you brainlet, but if you have been paying attention: corona is the biggest nothingburger of the millenium, overblown by multiple orders of magnitude to keep the impending absolute doom in pandoras box for 2-3 more years. As those years are over, we now see it unfold

[Anonymous No.49528269]

>>49528261
>shutting down the global economy was a nothingburger
Lel

[Anonymous No.49528270]

>>49528167
100% this. End of 2019 the global economy was set to crash like it has never before. Cue reverse repo ramp up, stimmys and QE infinity. Honestly it is probably a primary reason for Covid/lockdowns in general. The can can be kicked but it can't be made to not exist. They are trying to taper the collapse to have it be as controlled and on their terms as possible.

[Anonymous No.49528277]

>>49527991
meds

[Anonymous No.49528282]

>>49528261
As a virus 100%. But if you ever thought it was about it a a virus you are fucking retarded.

[Anonymous No.49528283]

>>49527507
Imagine getting 12-14% return on a bond

What was happening in the 80s?

[Anonymous No.49528288]

>>49528228

Anon why not post the full graph

[Anonymous No.49528302]

>>49528277
All I did was list shit that is happening/has happened. Have you ever even heard of the BIS?

[Anonymous No.49528321]

>>49528144
Jesus. How does the ponzi end? Negative interest rates? Is it ending as we speak? Kinda scary

[Anonymous No.49528330]

>>49528288
I am on my phone and just took a quick one off google, emphasizing the circles for those who won't know how to read it over full timeline, considering the whole of it only vindicates it further.

[Anonymous No.49528356]

>>49528270
We'll probably see a lost decade like Japan. Bonds being fucked with just to keep our economy afloat so the chinks don't just outright buy it

[Anonymous No.49528378]

>>49528321

Negative interest rates are mostly uncharted territory, especially when you consider that the ECBs imposition of them is not from a position of leading the monetary policy of the entire world.

Thinking aloud, while the actual mechanism is pretty novel, this probably does ahave precedent if you look at is as a form of asset seizure, albeit drip by drip. CBDCs most certainly are going to be rolled out over the next few years in order to enforce such policy decisions programmatically, with automatic regulatory compliance at key points of the infrastructure.

[Anonymous No.49528393]

>>49528230
>Praxeology as example
Are you retarded? You should know that its impossible to model the behavior of the population of the entire world empirically, which is needed because they are all economically interconnected. Also: even if you were able to pull that off, you would still only look at a short time frame. Basically, not using praxeology in economics means that you have to model ALL human behavior of ALL individuals for at least a couple of centuries (if not millenia) to derive sound economic principles off of that empirical model.

[Anonymous No.49528415]

>>49528356
China is worse off than we are. That's the thing. This isn't just happening here. And actually everywhere else it is happening way worse particularly because the global economy is underpinned by dollar denominated debt. China is getting fucking wrecked. We are already seeing food riots and sovereign defaults in countries like Sri Lanka and Iran. You can predict Arab Spring typed events really consistently by baskets of food prices.

[Anonymous No.49528418]

>>49528330

Are you familiar with this S&L crisis of the 1980s? We went massively inverted then, and, if you are looking at such activity in whole, it seems that the insolvency of said small lenders acted as a canary in the coal mine, foretelling larger and larger defaults by institutions.

[Anonymous No.49528419]

>>49528269
>Le epic first grade reading comprehension
Covid is a virus, used as a reason to lock down, not the lockdown itself. Why am i even talking to sub 10 IQ niggers

[Anonymous No.49528428]

>>49527507
So the sign was in 2019. Then we had a pandemic and put an even bigger dent in the economy thanks to retards in charge. It's gonna be really bad, won't it?

[Anonymous No.49528432]

>>49528283
Economic shock therapy to control inflation. We completely assfucked our deficit and threw gobs of money at the military industrial complex to keep our economy going and the initial effects were pretty bad

[Anonymous No.49528448]

>>49528415
Wishful thinking. If China was getting wrecked it wouldn't be shutting down entire cities just to damage western supply lines. You don't actually think it's because of Covid do you. The ones getting wrecked so far are Europe and Japan.

[Anonymous No.49528458]

>>49528270
Exactly. Nobody knows of the sept 2020 freeze though, i suppose there is a very good reason why it wasn‘t all over the media.

[Anonymous No.49528465]

>>49528415
Turn off the propaganda anon, Gordon Chang and the China Watchers have been saying China is on the verge of collapse since 2011

[Anonymous No.49528470]

>>49528080
The Feds primary role is controlling interest rates. Capitalizing Fed in all caps doesn't make you more knowledgeable or persuasive. It actually makes you less knowledgeable, and much less persuasive.

[Anonymous No.49528472]

>>49528282
>If you ever thought it was about the virus…
Who are you arguing with? You’re literally repeating what i just said

[Anonymous No.49528484]

>>49528167
>>49528270
>>49528458
Can you give a tl;dr on the liquidity freeze?

And speak as if you were to a young child or a golden retriever

[Anonymous No.49528499]

>>49528186
Defund the army/secret services. No point in keeping a huge army if you are going to lose your hegemon status.

[Anonymous No.49528501]

>>49528080
The Fed's primary role is controlling interest rates. Capitalizing Fed in all caps doesn't make you more knowledgeable or persuasive. It actually makes you less knowledgeable, and much less persuasive.

[Anonymous No.49528529]

>>49528419
You're seriously fucked in the head my man. If you had of said the events of covid delayed the crash I would have given you some credit but no

[Anonymous No.49528533]

>>49528321
It ends with millennials and (to a greater extent) zoomers eating it slowly over time. The hangover our boomer faggot elders got is into will last decades.

[Anonymous No.49528549]

>>49528428
>even bigger dent
I dont know if you understand, but the dent the lockdowns caused legit do not matter. An anology:
When you have a car that you know is trashed and going to the scrap press tomorrow, does it matter if you hit the windows in with stones?
Everybody knows this is the big one, (((the great reset))). The system will collapse, and it doesnt really matter if you put a few dents in before it happens to keep the party going for a couple more years

[REAL HARBINGER 4r No.49528568]

>>49528529
You're credit is no good. You are not following his argument.

[Anonymous No.49528577]

>>49528484
i switched to PC to type it out, was on phone.
TLDR coming in a couple of minutes.

[Anonymous No.49528579]

>>49528448
>>49528465
They aren't doing it to fuck western supply lines. Deglobalization is not a good thing for Chinese domination, especially when they have 3x their GDP in debt and have to service a huge burden in dollar denominated payments to be able to even participate in the global economy. Their in country sales are beyond dismal compared to the US. The only thing keeping their economy afloat right now is having their people locked down, directed spending into mass-testing and MORE infrastructure spending. All of their developers and largest bond issuers are going bust. If it were any other country and any other industry, a majority of them would be downgraded to default. To say nothing of the larger provincial/state debt issued on top of it, or the rail bonds, which who even knows how the fuck they are getting "paid." Do you know what is happening right now with their banks?
https://www.ft.com/content/fc0ba3e7-605f-46c3-b388-6bc44968cdda

[Anonymous No.49528609]

>>49528472
You're right I didn't read your full post. Pretty ironic given my earlier criticizing of peoples' lack of patience in forward thinking. My bad.

[Anonymous No.49528612]

>>49528529
>would have given ccredit if you said covid delayed the crash
i implied that in my posts that you are either not reading or incapable of understanding.
Seems you cannot grasp thoughts that are not written in front of you with all implications typed out.
go eat dorito chip vertically

[Anonymous No.49528640]

>>49528612
No you implied that covid was big conspiracy to prove your shitty indicator wrong. A big conspiracy that even China was in on. Just lol

[Anonymous No.49528654]

>>49528230
There are so many conflicts of interest in economics, arguably all of them tying back to the field to some extent, that empiricism inevitably leads to no more than a rationalization of power incentives. You cannot reliably conduct controlled experiments for macroeconomics, so everything comes down to creatively writing up historical narratives to fulfill your biases and then retroactively creating more and more complex formulas through regression that still give you the desired conclusions.
Designing models inductively through axioms and then forcing yourself to see them through to their predictive value is the only way to even try to have a science of economics in a generalizable sense, as it minimizes the subjective, corruptible assumptions you will inevitably have to make. Such a model not matching reality does not imply reality is wrong, but rather the axioms.
However, Austrian Economics has been right on nearly everything. Their models only break insofar as they intersect with the libertarian metaphysics of the NAP and a clean private x public distinction, and these are by no means inextricable to their observations.
>>49528283
Paul Volcker was happening.
>>49528321
>>49528428
Not really retards in charge. It takes a very high IQ to keep this ponzi going. the pandemic was brilliantly convenient because it kept money velocity down. The repo market was already cracking at the seams before then.
It is ending at some point. Either rates are raised and the US goes bankrupt or the dollar becomes worthless. The last few years have been a race. The US became a zombie economy in 2008, and ever since then it has fully transitioned to a data economy, praying for the generalized AI gods to come save the ponzi economy in time. The worst case scenario is that it's salvaged through transition to a social credit-style CBDC, but that's hopefully still politically unfeasible.

[Anonymous No.49528662]

>>49528418
That seems to be a very common and good early marker for it. You could see it in the subprime index in 2008 and just look at Affirm today (as well as the general revolving credit/delinquency/savings/housing vs. median income. This time we won't have China to absorb the global burden though.

[Anonymous No.49528690]

>>49528579
Also worth seeing:

https://www.bloomberg.com/news/articles/2022-05-17/china-stops-reporting-bond-trades-by-foreigners-after-selloff

[Anonymous No.49528716]

>>49528654
Crucially, due to the nature of the eurodollar system, unless Zoltan Poszar's Bretton Woods III comes out, the dollar becomes worthless slower than every other currency becomes worthless.

[Anonymous No.49528718]

People ITT seem to have a somewhat decent understanding of macro economy.

Where should one put money ahead of this giga recession? Gold & Silver?

[Anonymous No.49528742]

>>49527756
Economic crisis doesn't occur over night. The Great Depression was years in the making with the catalyst being a panic caused by the English markets taking a dump. This was compunded by the technology of the time causing even more panic as people were receiving news of the crash hours or days later panicked and tried ro get here money out if the market. The full scope of 2001 and 2008 weren't realized until many months later. The main difference is that dumb money and retail investors are more likely to return sooner because they have detailed history showing that the market is still the safest place to keep your money. That being said a BIG CRASH and shake out will probably chase most of the dumb money and retail traders away for 5-10 years.

Anyway back to the main point these things are all indicators. Alone they don't really mean a whole lot but if you have enough occur in a short period of time and the markets are reacting somewhat violently then yeah it is cause for some concern. Again if you are buying the dips on market indexs and well strong companies you are fine. Maybe hedge with a foreign market if you are that worried but eh. Thisnis like the 4th-5th economic crisis in the last 25 years. I am gonna need to see some Great Depression tier deflation and Bidentowns popping up before I give a shit beyond shitposting.

I guess buy the bond dip?

[Anonymous No.49528778]

>>49528716
That said we are obviously seeing bilateral trade agreements and fragmentation between countries/deglobalization become more norm. Dollar is lowering as reserve status but unless there is a paradigmatic monetary shift, as the global economy goes to shit, the dollar will keep surging against other currencies (maybe punctuated with periods of deflation). The dollar milkshake seems to be playing out. I think the migration to ISO 20022 is meant exactly to be this monetary shift which basically solves the liquidity crisis and puts in place a system which doesn't have this fundamental flaw (at least evolutionarily) built for inevitable implosion.

[Anonymous No.49528825]

>>49528579
>Do you know what is happening right now with their banks?
Seethe moar

[Anonymous No.49528882]

>>49528718
Not for a recession no. It really depends in how doomer your outlook is. Funny enough Cash is probably safest place unless hyperinflation occured buy we are all fucked if that happens. Also get any debt like car loans or credit payed down since that is what usually fucks people in recessionary times. Buy bonds maybe someone with more experience might need to advise on that. Buy into market indexs and then DCA as it crashes and just park the bus until the markets recover in 1-30 years.

[Anonymous No.49528905]

Nothing ever happens
when do you get it
1929 was a nothing burger in the long run
1973 was a nothing burger in the long run
1979 was a nothing burger in the long run
1981 was a nothing burger in the long run
1997 was a nothing burger in the long run
2000 was a nothing burger in the long run
2009 was a nothing burger in the long run
2018 was a nothing burger in the long run
2022 is a nothing burger in the long run

[Anonymous No.49528920]

>>49528825
That doesn't make sense in their context. They doubled down and flooded their economy with stimulus and spending and now they are locking people down to artificially kill velocity and shifting from spending arbitrarily building 3 bridges which all go across area and ghost cities to different infrastructure spending and mass-testing. And are locking people out of their bank accounts on the verge of runs. They just stopped reporting international bond trades after foreign investment left in droves. Literally 1 in 3 foreign workers in Shanghai says they plan to leave once lockdowns abate and around the same amount (best I remember is 1 in 4) of foreign companies say they plan to end their investments there. Manufacturing jobs are leaving for other countries. And all of this is before their debt bubble gets pricked, which no one even knows how big it is, but it is DEFINITELY big enough to absolutely wreck them once the cascade begins. Sorry dude, whether you're Chinese and shilling or have been talking recycling the media blurb that muh "China will own us in 10 years" for the last 15 and are embarrassed to have been so snide over something you never spent more than 10 minutes (including the original segment of news watching in which you first heard it) looking into, I'm happy to say you're just wrong. BRICS will help bridge the new monetary system though.

[Anonymous No.49528938]

>>49528484
im still working on the TLDR, feels like im writing a whole book but it is necessary to give a lot of context to make it understandable

[Anonymous No.49528948]

>>49528938
Take your time my good man

[Anonymous No.49529038]

>>49528159
>Neoliberalism

Kill yourself, leftist like.

[Anonymous No.49529060]

>>49527933
>Actual econ teacher here.
Ahem, I believe my bonus last year for trading swaps was worth more than your entire salary. Why someone would pay good money to learn bullshit from you that’s wrong I do not know.

[Anonymous No.49529105]

>>49528484
1/2
okay, where do i start.

As a business, you have assets and liabilities. Liabilities are what you owe to people, assets are what you own (or are owed by somebody). Businesses need to balance these two sides to not go insolvent.
Banks handle especially large sums of cash (who would have thought) and essentially, when you deposit cash into a bank, that creates a bank liability towards you (because you could withdraw the cash).
To balance their books, banks usually take your money as reserve (see reserve requirements) for a loan for somebody else, making it become an asset to them (they are owed the money by the debtor -> asset, and in turn owe you your money back -> liability, and everything is well)

Problem is: when the debtor defaults, their “asset” (what the bank is owed) is not getting being paid back, basically making it vanish in an instant. This is not a problem and covered through interest rates, so when a few debtors default, the bank can still pay back their liability to you using the banks own money. Since the bank itself doesn’t want large sums of cash (liquid asset) lying around at all times, and usually has the money invested in treasury securities (US-Bonds). Those assets may be and usually are less liquid, so they can’t be turned into cash in an instant to pay you back whenever you want your money. To still be able to cover their short term liabilities (your bank deposit), banks lend each other money over night, using the less liquid assets they have bought with their own money as collateral. This system mostly works well.

On September 17, 2019 however, banks suddenly stopped lending each other money, causing a liquidity crisis. Remember: Banks need to borrow money against their assets to be able to pay you back, and if they are not able to borrow that money, they possibly go bust in as fast as one day. That is what happened to Lehman in September 2008 by the way.

[Anonymous No.49529120]

>>49528484
>>49529105
2/2
Whenever Banks refuse to lend each other money, that is a !!!very!!! bad sign, and the reason is either that the banks simply don’t have that money, or that they don’t trust the other banks assets to be worth enough to serve as collateral for the loan. Remember: we’re not talking about a 30 years loan, these loans are only over the course of ONE NIGHT. That means that they possibly don’t lend each other money because they don’t know if the other bank will even be around the very next day. Whatever the reason for the lending freeze, if it happens it causes/is called a liquidity crisis.

If banks stop lending each other money, the FED steps in doing some magic, basically taking the banks assets (US-Bonds) over night and handing them cash (that is freshly printed) in return, with an agreement that the cash and assets swap hands back the next day. The problem with this is, its just a band aid. If the bank uses that REPO liquidity to pay you your bank withdrawal, they can’t swap back the next day. If that happens, the bank also does not get their US bond back and loses their asset, causing the asset/liability balance on their books to take a big hit. Basically, the REPO market is there to keep the show going for a couple more DAYS if a liquidity crisis happens, and if the banks are not able to generate enough cash to swap back the next day, they go full Lehman mode.

[Anonymous No.49529150]

>>49527507
Look. JUST STOP.
Stop remembering and using history.
STOP.
NOW.

[Anonymous No.49529152]

>>49528579
Shut up faggot. All of this cope doesn't apply anymore, the world is at war. Decolonization is bad for China? Well cutting off Russian oil is bad for EU and they did it anyway. The world is at war wake the fuck up

[Anonymous No.49529160]

>>49528484
>>49529105
>>49529120
forgot pic

[Anonymous No.49529162]

>>49528920
It's literally the Japanese fud all over again. Peopke were still claiming Japan was going to over the US years after their bubble burst. Wait until the Chibese bubble bursts and the new FUD goes from OH NYO CHINA OS BOOMING WE ARE DOOMED! into OH NYO CHINA IS DYING WE ARE DOOMED!

[Anonymous No.49529173]

>>49528181
i agree with you but not on TA. druckenmiller uses TA as his go to, says it all the time. It also told him to pivot mid 2021 and sell into the final runup.TA gives insights jnto psychology. It’s easy to fuck up with confirmation bias, which is why it should be done on many asset classes to develop a macro view.

[Anonymous No.49529184]

>>49528154
What the fuck is there to think through? The Fed can directly do YCC and you're arguing they can't set the rate? Wake up from your UMMM ACTUALLY THE TEXTBOOK SAYS slumber

[Anonymous No.49529193]

>>49529152
DEGLOBALIZATION. The Chinese economy cannot sustain itself without foreign capital investment. Its entire economy is built around it and without sufficient iflows will collapse. Agreed, Europe made a stupid move (if viewed in isolation as trying to act in its own financial interest) which strengthened Russia, drove up the price of oil, gave Russia more money and strengthened the Ruble. Therefore you would conclude Europe's action did not help it. So why are you determined to, within your own analogy, say that China, which you are comparing to Europe, is thriving? It is literally an incoherent analogy and is clearly driven by your own predetermined intention to view China at doing well in isolation. Lol

[Anonymous No.49529194]

>>49527933
you cleverly left the
>white
, which revealed you to be an idiot diversity hire, until the end of your post. Well played, I almost believed you know what you're talking about.

[Anonymous No.49529201]

>>49529162
My phone update makes me type like a retard and I love it.

[Anonymous No.49529230]

>>49529173
The problem is it assumes everything is priced in and that institutions are not setting up moments of portrayed ignorance to absolutely rug the fuck out of retail. Maybe this works a majority of the time in conventional circumstances. In the last half a year alone there have been 4-5 instances which it wouldn't. And all the TA fags went from muh bull run to muy bear trap to muh extended golden bull run, literally just pivoting, never even learning what they were wrong on.

[Anonymous No.49529269]

>>49529105
>>49529120
>>49529160
Ty for spoon feed.

So how did the lockdowns or whatever temporarily solve the liquidity crisis? Excuse for massive money printing which has caused this inflation?

[Anonymous No.49529280]

>>49529193
>DEGLOBALIZATION
Yes, that's known as decolonization outside of the empire.
>why are you determined to, within your own analogy, say that China, which you are comparing to Europe, is thriving
It's not thriving, it's just their only chance to get to be a world power that isn't an American colony. And I know they'll seize that chance. I don't know why Americans believe the world world to be a US colony. US made it clear that it will not allow its colonies to pursue independent foreign policy.
>BUT MUH FOREIGN INVESTMENT
The one that's evaporating in real time? The world isn't run by consumers, it's run by producers. Producers can survive hardships, consumers are obliterated by hardships and replaced by a new wave of consumers within a few years

[Anonymous No.49529340]

>>49529280
Lol Again. The global manufacturing base is atrophying from them and they can't raise capital because no one is buying Chinese commercial paper loans anymore. And the real consequences of defaults haven't even started yet for them..

[Anonymous No.49529343]

>>49529269
will explain in short detail, give me a couple of minutes

[Anonymous No.49529398]

>>49529280

You're correct about productive capability being the base of resiliency. What you are missing is how the communist model of economic direction is destroying such ability from the inside out, directing creative capability towards extravagant goals (One Belt,) while crippling the local accountability and capability of people's relatively mundane everyday needs.

[Anonymous No.49529426]

>>49529280
>I don't know why Americans believe the world world to be a US colony
Everyone wants to be a us colony. They can just compare the quality of life of nato countries and non nato ones. Even with the globalhomo it's still far preferable for them to whats happening in sri lanka. The US and it's allies are the safest and most prosperous nations and everyone wants that. The alternative is sti lanka which took shark loans from China.

[Anonymous No.49529441]

>>49529343
No stress my friend take your time

[Anonymous No.49529533]

>>49529269
The FED guranteed them all free money for almost 2 years. So for 2 years it was free flowing. The issue is the FED has put a hard stop to that and might go from pumping the brakes to slamming the brakes. Now the issue is zombie companies. Someone more knowledgeable about this situation cam explain but essentially there are a shit ton of companies that have only survived up until now due to excessive lending. Taking out loans to pay employees and in a stunning act of brilliance paying off their previous loans.

[Anonymous No.49529736]

>>49529269
> So how did the lockdowns or whatever temporarily solve the liquidity crisis? Excuse for massive money printing which has caused this inflation?

The lockdowns had 2 very favourable effects:

1. Excuse for money printing. The narrative was “we need to save small businesses from corona losses and going bust”

Coming back to my earlier point of banks getting into a liquidity crisis because of debtors defaulting. The defaults that cause the asset/liability balance to take a hit and the bank to not be able to pay you back are not defaults of some random boomer not being able to pay his mortgage. Those are most likely defaults of companies. If the debtor companies take a hit and default, the bank gets in trouble and can’t pay you back, getting you in trouble.

The FED started buying company Bonds in 2019 (which is securitised debt) with printed money, instead of only buying US-Bonds. No idea if you are familiar with bond markets, but buy pressure increases the price of the bond (obviously), which in turn makes the interest rate on the debt securitised by the bond go down. That reduces the debt burden on the company, making it easier for them to refrain from defaulting. On top of that, the company can issue new bonds to cover existing debts at a lower interest rate, knowing that the fed will buy them with printed money and not care about the risk assessment anyways. That basically flushes failing companies with cash, indirectly propping up banks too - because they don’t get into trouble if their debtors don’t default. The banks also got printed money, through the same bond-buying mechanism. On top of that, the banks already had a ton of US-Bonds as assets like described earlier, which increase in price when the fed props the prices up.

Since the printed money is used to pay back the creditors instantly or over time, it ends up in the hands of everyday people over time. This leads to point 2 of the lockdown:

[Anonymous No.49529748]

>>49528186
They'll raise taxes. Hopefully corporate taxes and the economy can afford it because corporate tax rates are at multidecade lows

>>49528501
Generally yes. But actually the bond market is in charge and you have to come up with all sorts of innovative measures to try to tame it. And sometimes the bond market tells Fed to go fuck itself and there is very little Fed can do about it.

[Anonymous No.49529766]

>>49529736
>>49529269
2. Reducing the velocity of money

Velocity is basically how often one dollar bill (or digital dollar) changes hands in a certain timeframe. Inflation does not happen if money is not spent (does not change hands). If people just keep the money in the bank, it never shows up on the demand/supply equation. Inflation happens by money printing because your economy produces the same amount of goods and a now larger amount of dollars is competing for that same amount of goods. Inflation does not happen if the rate of printing is lower than the rate of production growth. When you lock down the economy, you don’t have to rely on people just saving their money, they simply CANNOT spend it, keeping it out of circulation and inflation under the hood. Since the lockdown keeps many companies from generating revenue at all though, you need to prop up those companies even more, using printed money aswell, leading us back to paint 1. This is the reason the FED suddenly started corporate bonds. That is simply because the optics of “saving companies” are way better than the optics of “we print billions into the hands to cover the defaults they face and effectively bail them out like in 2008, but with WAY larger sums.

Now that the lockdowns are over, velocity is (only slightly) up again, and we already see massive inflation.

[Anonymous No.49529786]

>>49529766
into the hands of banks*

[Anonymous No.49529816]

>>49527711
So but WHY does this nominally follow a recession? I know it has something to do with long term investments clearly but I don't understand why a greater yeild on short term is worse in conjunction with lower long term yields

[Anonymous No.49529848]

>>49529533
yes, that "i borrow more money to pay off my old loan" type of ponzi shit stopped working in September 2017 though, which caused the debtor defaults that i described in >>49529736 and >>49529105

The FED and banks knew from that point on that the entire house of cards was going to burn to the ground within a couple of months, which is why we got (((covid))) and the situation described in >>49529736 and >>49529766

[Anonymous No.49530042]

i write down all this shit and now the thread is dead, im mad

[Anonymous No.49530110]

>>49530042
Sorry bro I’m wageslaving atm
Ive saved all the text though so it wont go wasted

[Anonymous No.49530123]

>>49530042
your posts are very informative thanks

[Anonymous No.49530128]

>>49527933
old white men, their kikes you fucking faggot. you teach gender studies and nigger worship masquerading as economics tranny

[Anonymous No.49530140]

>>49529816
Normally you'd get more returns for lending money for a longer period of time. Think about how little sense it makes for short term yields to actually be higher. It indicates that people are worried and don't want to lend for long time because they see it as risky due to bad economic conditions or something.

[Anonymous No.49530156]

>>49527399
https://www.youtube.com/watch?v=YnMFQFDhy-4

[Anonymous No.49530163]

>>49528283
Paul Volker you brainlet, this is not Google

[Anonymous No.49530190]

>>49529766
why did they prop everything up instead of using the covid excuse to let everything crash because "we cant afford saving everyone" and let trump take the blame for it ?
was that even a possibility ?

[Anonymous No.49530214]

>>49527933
You're a useful idiot.

[Anonymous No.49530232]

>>49527991
> tether fud
sure i could see it happening. what stables do you hold? usdc?

[Anonymous No.49530243]

BUmp!

[Anonymous No.49530270]

>>49530042
I'm reading son, thanks for doing god's work. I never really understood money velocity or corporate bonds, so it's very interesting stuff.

Question, why don't smaller companies issue corporate bonds?

[Anonymous No.49530362]

>>49529848
September 2019

[Anonymous No.49530365]

>>49530042
Not dead anon. Just getting into this thread now. But I when that happens you put effort into a post and noone sees it.

[Anonymous No.49530391]

>>49530140
>It indicates that people are worried and don't want to lend for long time because they see it as risky due to bad economic conditions or something
Aren't short term yields up because people are selling short term bonds? Means they don't want bonds short term for whatever reason. It's most likely because they see rising interest rates short term over next 1-2 years so anything less than 10 years should sell off to get new ones. The longer dated bonds are probably fine as the fed will likely lower rates later sometime in a 30 year period.

[Anonymous No.49530634]

>>49527933
>>49527991
These two posts after eachother are a great a great example of what type of people go into teaching.

[Anonymous No.49530697]

>>49528017
A credit crunch will not solve energy price and the messed up supply chains. At most it can make people poor enough to give up on luxuries, while messing up supply chains even further. Start thinking of assset inflation and consumer inflation as two separate phenomena.

[Anonymous No.49530743]

>>49530190
well, when 80% of banks and companies collapse within the first weeks of covid or even before, its pretty obvious that that was not the virus' fault.

They kept the printing under the radar in 2019 (at least mainstream media did not report on it) and then used corona to keep going with it and have an excuse when and if the masses found out, which to this day pretty much never happened, We're going to conspiracy territory here, just to make clear, im more into the economic side of things.

Its blatantly obvious why covid was overblown that far by the way. Its a regular flu (which people call a conspiracy theory, but numbers - unlike people - dont lie)

[Anonymous No.49530880]

>>49529766
>Inflation does not happen if the rate of printing is lower than the rate of production growth.

CPI inflation is not going to happen as long as the printed money goes into assets rather than consumables, which has been the case basically since the 70s.

Asset inflation slowly erodes the pricing mechanism for productive assets, which leads to stuff like faltering infrastructure, as well as pic related

[Anonymous No.49530916]

>>49530880
Why are most econoniggers missing this dynamic?

[Anonymous No.49530922]

>>49527991
Do you keep notes?

[Anonymous No.49531141]

just tell me if crypto up or crypto down, retard, i don't care about your astrology

[Anonymous No.49531266]

>>49530880
>CPI inflation is not going to happen as long as the printed money goes into assets rather than consumables, which has been the case basically since the 70s.

that too, didnt want to make my post even longer so i left that out

[Anonymous No.49531296]

>>49530916
because they are indoctrinated by keynesianism.
Also i suspect they do know, but they cannot let the goyim know. Everybody on /biz/ called the high inflation we have now in the beginning of 2020, i dont believe no economist saw it coming.

[Anonymous No.49531329]

>>49528149
This, and I have to take care of my mommy's money cause banks even suck harder.

[Anonymous No.49531347]

>>49527991
>muh Celsius
who fucking cares

[Anonymous No.49532796]

The house always wins