/biz/ - Business & Finance

[Anonymous No.856534]

So according to /pol/ it's happening again.
http://www.telegraph.co.uk/finance/11805523/Doomsday-clock-for-global-market-crash-strikes-one-minute-to-midnight-as-central-banks-lose-control.html
What's /biz/'s take on it?
Pic unrelated.

[Anonymous No.856535]

>>856534

>/pol/
>knowing anything about the market

wtf

[Anonymous No.856541]

>>856535
They don't but it seemed interesting enough to warrant asking competent people.

[Anonymous No.856597]

>>856541
>/biz/
>competent

lol

[Anonymous No.856600]

serious question why not just liquidate all positions for a month? worried about tax implications I guess? Otherwise ??

[Anonymous No.856648]

Its the usual dead wrong doom and gloom crap. Writing about it gets you clicks and it sounds exciting to people that are clueless.

[Anonymous No.857443]

>>856541
so you asked /biz/? 90% of this board are either community college econ students who think they have the world figured out, or spillovers from /g/ who think the economy revolves exclusively around computer hardware.

[Anonymous No.857447]

>>856535
>not knowing /biz/ is a spinoff board created by /pol/

[Anonymous No.857449]

>>857443
What if I am both.

[Anonymous No.857450]

Misleading article title. The ACTUAL scientific doomsday clock is only updated once a year, I believe

http://thebulletin.org/timeline

[Anonymous No.857456]

>>856534

Federal reserve never stopped the QE program. We're still running at the same deficit as when the program was working. Market has made no gains since the media said it was ending. Now global economy is cooling and the fed is stuck with ZIRP and has nothing left to give to bolster the economy. If you haven't seen coming, you're fucking blind. Last resort is negative interest rates, which would sent the market in tailspin or start printing a shit ton of money ... which would bring on a devastating amount of inflation. How would we deal with the inflation? ... first by the govt lying about it, and then when the entire middle class is in poverty, the Fed will have to raise rates as last resort. And then what? Rates on everything do up like they did in the late 70's/early 80's ... how do we afford the interest on our national debt? Say goodbye to your house value. We're fucking rekt. It's just a matter of time until we hit the wall.

[Anonymous No.857469]

>>856534

Pic related

[Anonymous No.857470]

[Anonymous No.857471]

[Anonymous No.857474]

[Anonymous No.858395]

>>856534
i like /pol/, something's always HAPPENING!!

we'll see by nov.

[Anonymous No.858479]

>>857447
>not knowing /biz/ wanted to escape the shithole that is /pol/

/pol/ has firmly moved from Milton Friedman to George Lincoln Rockwell anyone worth listening to on that board has long since left.

[Anonymous No.858725]

>>857456
This sounds plausible.

[Anonymous No.858732]

If the economy tanks, then that means I'm able to buy in a downmarket. A down market is an investor friend.

[Anonymous No.859323]

>>856534
Buy 1oz gold.

Stfu, you are covered. Stop trying to predict the future.

Buy more than is reasonable for your portfolio and you can an hero all your gains.

>b.. but it's doomsday anon!

Look, if the world is really going to WWIII, you are fucked.

If you believe this then escape to the wilderness or someshit. If you aren't willing to do this, stop bitching like my 15 year old cousin and balance your portfolio in a way which comforts you when you go to sleep.

Stop being a faggit.

[Anonymous No.859364]

>>858479
B-but GLR was right, just like our great leader Hitler, you race mixing lover.

https://www.youtube.com/watch?v=FaCHBmGWcBc

[Anonymous No.859618]

>>857456
Should I move to Germany or some Scandinavian country to avoid this? I'm American btw.

[Anonymous No.859623]

>>857469
This!

[Anonymous No.859639]

In September, when the Fed raises interest rates, they will not only rise... but they’ll rise much faster than anyone expects.

Government bond yields will rise too, including the 10-year note. Most people don’t realize this, but the 10-year note has a major influence on the U.S. economy...

When it goes up, all sorts of other rates and loans go up too.

I’m talking about consumer loans, mortgages, corporate bonds, credit card rates, airplane leases, boat loans, car loans, truck loans... you name it. They’ll all rise when the 10-year rises.

Rising rates means lower bond prices. So, if you’re locked into a bond, you’ll see its value plummet.

Bond funds will get hit even harder. Any and all investments that are sensitive to interest rates, including many stocks, will get crushed as well.

This crisis will strike in 3 waves...

[Anonymous No.859642]

The most leveraged, riskiest stuff will get crushed first. I’m talking about things like mortgage REITs, mortgage backed ETFs, and junk bonds.

They’re riskier, so they have higher yields. But they’ll also be the hardest hit when rates start rising.

In fact, for reasons I’ll explain shortly, this process has already begun.

[Anonymous No.859644]

Many of these investments have no maturity dates... so when interest rates spike, there’s no way to get your money back. No company will redeem them. Your money will be trapped.

As these riskier, more interest-rate sensitive investments begin crashing... a holding pattern will develop. People will begin wondering if this is just a downturn, or if it’ll get worse.

But then the second wave will hit... and they’ll know the answer.

[Anonymous No.859648]

The second wave will begin as “Income Extermination” wipes out the front lines and starts hitting some of the more quality stuff.

I’m talking about MLPs, investment grade corporate bonds, municipal bonds, and over 80 utility stocks.

You may be wondering: If these are “higher quality” income investments, then why will they get hit?

Because they use debt to finance themselves. And they’re interest rate-sensitive.

Consider the municipal bond market. Or “muni’s,” as most folks call them.

If you don’t own any of these bonds outright, your mutual fund or 401(k) probably has exposure.

For decades, many smart investors have been investing their safe money in muni’s.

But when “Income Extermination” hits, these bonds will get crushed.

Allan Sloan, a senior editor at Fortune has called muni’s a “train wreck waiting to happen.”

I believe we’re already seeing signs of it. The yield on muni’s—which is typically 25% lower than other bonds—is now higher in many cases than corporate bonds.

"The fact that tax-free is higher than taxable... is absurd and signifies an inefficient market," said David Kotok, chairman and chief investment officer of Cumberland Advisors.

But muni’s are just one small part of what Income Extermination will affect...

[Anonymous No.859650]

>>856534

God, that thing's maw is terrifying.

[Anonymous No.859651]

The third and final phase will begin infecting the U.S. housing market... as new borrowers get frozen out... and folks looking to sell their homes will be stuck.

Long-term government bonds—the income sanctuary of last resort—will get hammered too.

But wait... why should you care if interest rates go up? Doesn’t that mean you’ll get better rates on your bonds?

That’s not the case. As interest rates continue to climb, bonds of all types will continue to see their value plunge.

Why?

Let’s say you buy a $100 bond that pays you 4%. If interest rates rise, and there are new $100 bonds now paying 6%, who in their right mind would want to buy your older bond that yields less?

Nobody would. So the price drops...

Then, if rates climb to six-and-a-half, no one would want the bond paying 6%—so the price of that 6% bond will drop as well.

Do you see how this works?

It’s a dangerous cycle.

[Anonymous No.859654]

In 1998, Long Term Capital—a high profile hedge fund—lost billions overnight.

The Federal Reserve was anxious about the banking system falling apart...

So they intervened.

The New York branch organized a bailout with some of the biggest banks on Wall Street.

And the Fed’s central bank lowered interest rates. They wanted to encourage frightened investors to borrow money at low rates.

In 3 months, interest rates dropped .75%.

While the banking system stabilized... something else happened too. You see, any time the Fed tinkers with the financial system, there are side effects.

By pumping money into the system, the Fed helped to create one of the biggest bubbles in the history of finance.

At the time, the “dot-com” sector had already been heating up. If left alone, it probably would have fizzled out in the fall of ‘98...

But because the Federal Reserve injected “easy money” into the system... they created a massive bubble.

The market realized the Fed wasn’t going to let Long Term Capital or any other financial groups fail, so the dot-com party raged on. Plus, because the Fed lowered interest rates, tech companies could borrow even more money cheaply.

It was like pouring gasoline on a speculative fire.

But by 2000, the dotcom bubble was deflating at full speed...

Millions of investors were getting crushed.

And the Fed began tinkering once again...

[Anonymous No.859655]

>>859651
Fucking doom porn ... I love it. Dow is getting crushed and so is oil. I can't wait for the bottom to buy up everything on the cheap.

[Anonymous No.859656]

As the Internet bubble was popping, the Fed cut rates on twelve separate occasions—a total of 4.25% in a single year.

This fueled an even bigger bubble... in an even bigger market.

Of course, I’m talking about housing. The real estate market in America is $27.18 trillion—even bigger than the stock market!

The Fed made the cost of money so cheap, that everyone started buying homes.And of course, the bubble popped in 2007.

But Wall Street was mixed up in the mess, so the stock market and banking system suffered too. It was the worst crisis since the Depression... and we have the Federal Reserve to thank for it.

Even worse is how they dealt with it.

Their actions have no precedent.

They interfered in a brand new way. And by doing so, they’ve created one of the biggest bubbles to date—in America’s biggest market...

This brings us back to today... and the market reckoning heading our way...

[Anonymous No.859657]

The Fed’s meddling has finally reached a breaking point...

After the events of 2008—in an effort to “control” the global economy—they pressed one too many levers.

First, they took interest rates to ZERO. That’s even lower than the previous two bubbles I described. In fact, that’s never happened before in American history.

Then, they changed bank collateral rules. Simply put, the Fed really lowered its standards on which banks it would lend money too. Even banks with junk on the books qualified for loans.

To make matters worse... after maxing out those two options, they began affecting long-term interest rates by buying US Treasuries on the open market. This is a tool the Fed has never used in any serious way.

In short, the Fed has been buying up trillions of dollars’ worth of 10- and 30-year U.S. bonds. It’s what they call “Quantitative Easing.”

By doing so, they’ve been pumping money into the government’s coffers... and lowering long-term interest rates in the process.

Which brings us back to today...

This “zero-interest-rate policy” (Z.I.R.P.) has essentially screwed millions of Americans. In the short term, you get nothing in your checking account. And in the long run, you can’t find safe yields that outpace inflation.

And it’s created the biggest bubble in American history...

When the Fed raises rates, that’s all it will take to quickly pop and deflate this massive income bubble.

[Anonymous No.859662]

>>859655
He's going to end this with the destruction of the US dollar so there won't be anything to buy it with. This is just a re-hash of Jim Rickards' lunatic CIA analysis he's hawking as a book. Why are the worst prophets of doom always ultra-conservative Catholics?

[Anonymous No.859668]

>>859655
Anon me too. I've saved so much money for this. I'm 26 and have 50k at my disposal saved. When this whole thing happens. I hope to start from scratch and build a nice investment on this downturn.

[Anonymous No.859673]

>>859668
>>859655
I'm at the point of investing €30k, is it really a bad time?

[Anonymous No.859676]

>>859673
Really bad time. Maybe start slow with gold and do homework on some index funds.

[Anonymous No.859678]

>>859673
Nevermind I don't know why I said gold. I hate good but it's always good to leverage so it's up to you on that.

[Anonymous No.859681]

>>859676
Yeah but when will it hit rock bottom? 1 year? 2 years? From the research I've done you shouldn't time the market and simply keep buying.

[Anonymous No.859687]

>>859639
>>859642
>>859644
>>859648
>>859651
>>859654
>>859656
>>859657
>>859668
>>859676
>>859678
>knows everything about the economy/markets
>26 years old and only has 50k cash

[Anonymous No.859688]

Is it possible the Fed won't raise interest rates next month?

[Anonymous No.859689]

>>859687
Lol your comment is funny. I have a forex account that is 1:300 leveraged. I will probably leverage with stocks as well.

[Anonymous No.859691]

>>859688
Idk it can go either way. Inflation isn't at the level to raise interest rates and unemployment claims went up today so idk. Tough call

[Anonymous No.859693]

>>859688
when will they announce it?

[Anonymous No.859695]

>>859693
September 16th I think.

[Anonymous No.859698]

>>859689
What do you trade on your forex account and what do you think of EUR/USD?

>>859691
What's the probability of negative interest rates in the near future?

>>859695
What's your source?

[Anonymous No.859707]

>>859698
Why would the Fed raise rates, if it means bad things will happen?

Well, because they’ve placed themselves in a very bad position:

If they continue pumping money into the system, they risk price inflation.
So there’s really one choice here: They have to raise rates.

The Fed even told Goldman Sachs and J.P. Morgan recently that they need “better capital levels before the end of the year.” In other words, they’re tipping the banks off to what’s about to happen. They’re telling them to batten down the hatches.

But here’s the thing...

Today, interest rates are already beginning to rise on their own, too.

Within the past 6 months:

Rates on the 30-year bond have risen by 11%.
Rates on the 10-year have climbed even higher—as much as 30%.

[Anonymous No.859710]

>>859698
I mainly trade oil gold EUR/usd gbp/usd right now idk about EUR I want to see where it starts to make a trend then do a technical analysis.

[Anonymous No.859711]

I've been waiting for a serious thread about this. Is there really a chance that we could be heading into another recession?

[Anonymous No.859721]

>>859711
There is a chance.

[Anonymous No.859725]

>>859721
I mean realistically. Everyone said they saw the 2008 recession coming, but is that just hindsight or are we getting the signs again?

[Anonymous No.859727]

>>859710

Yes. Global demand is slowing. We haven't even been able to raise Fed rates since the last recession ... and the govt is just printing money to no end. 18.35 trillion in debt. Obama started with about 9.5 and bush started with about 5.5 trillion. We're essentially doubling our debt less than every 10 years. This is where our increase is GDP comes from ... it's all smoke and mirrors.

[Anonymous No.859834]

>>859711
I'll tell you a summary of everything I've heard in finance/econ news:
US is doing okay, but things aren't "better" as people keep saying. Things aren't on a decline, but not on the rise either.
Rising interests rates would have a negligible effect on markets and stability. Long term stability is shaky, but better than most of the world right now.

The Chinese economy is on a relative free-fall. Too much exporting, too much fast expansion, not as much returns as expected.
Plus, their stock market is more artificial than the US's, and people are catching on and getting scared.

You know Greece shit the bed if you have eyes or ears, and that it sent shockwaves through the EU. Its not dealt with yet, and might not be for a long time, so that adds MORE instability to and already unstable EU.
While the US recovered relatively well, the EU has not, and has begun to really feel the effects of this slowed recovery and risks more than the US of dipping back into serious recession.

Russia has been fucked by HARD international sanctions for its fuckery in the Ukraine, and experts speculate it only getting worse.

All of this instability of major economies says recession is almost inevitable in such a globally connected economy.
In order of damage, it would probably look like this USA>PRC>EU>>>RU

That's my two cents, and its taking word from experts (take that term as you will) speculating on national and international economics.

[Anonymous No.859983]

>>859618
Should I I herd Germany is getting out of debt along with most Scandinavian countrys.

[Anonymous No.860393]

That's it huh. Thread dead. I'll just drink my beer.

[Anonymous No.861371]

>>857469
>>857471
This is the stupidest thing I've ever read

>>858732
This

>>859323
This too.


Basically we're heading for another GFC. Use the low prices for everything to invest, especially in the renewable sector if you're playing the long-game. Otherwise, stock up on tinned food.

[Anonymous No.861402]

>>860393
Are you long on gold? Do you see gold and the Dow jones being = in price ever again? I think it has happened 2 times in the last 100 years or something.

[Anonymous No.861409]

OK is this going to be a 2008 one or will we all be living in tent city's like the 1929 one?

[Anonymous No.861443]

>>861409
2008.

I doubt there will ever be another 1929 again. A dynamic global economy was only taking its first steps then, and it tripped.

[Anonymous No.861455]

>>861371
>This is the stupidest thing I've ever read

>"Maybe if I say this the goyims won't suspect us."

[Anonymous No.861470]

>>856534

Market down? Time to buy!

[Anonymous No.861512]

>>856534
were due for a correction since most of the rally was QE money finding somewhere to nest but even with the shit in greece / china and europe I'm not seeing a catastrophic failure (yet)

China IMO is definitely a timebomb but I think bears underestimate just how long they can keep the house of cards up

[Anonymous No.861513]

>>856600
loss of gains, same reason you dont pick individual stocks, you cant time the market

[Anonymous No.861516]

>>857469
except if you actually start taking dates and deducting 7 you almost immediately start seeing errors, like what happend in 94? 87? 80? maybe 73 fits in but then we deduct again and voila, another non market crash year

[Anonymous No.861517]

>>861513
And yet if I had liquidated then I would have timed the market pretty well.... a 7% loss is nothing to sneeze at.

[Anonymous No.861518]

>>859707
>If they continue pumping money into the system, they risk price inflation.

This would only happen if the money ever actually saw the light of day, which it isn't, its (as you pointed out) tied up in bonbds for 10-30 years and being loaned to already billionaires who are using it to pump the stock market (and not panic selling because they just need to beat the inflation that the fed themselves make)

[Anonymous No.861520]

>>861517
Yeh but if you're strategy is "opanic when others are panicking and be greedy when others are greedy" then long term you'll have ass backwards gains

What I dont get about this board is everyone obsession with the s&p and forex, you guys know their are more hands on ways to invest? different vehicles for your money? you could invest locally in a new business, buy some homes and pay someone to manage them etc

Thats the shit /biz/ lacks (although we do have some gem threads) , everyone circle jerks over getting rich buying and selling through a computer, go visit your local chamber of commerce and see whats ticking locally

[Anonymous No.861526]

>>861520
well that isn't my strat but if you wanna make assumptions that is cool.

And I would say the reason why going to your chamber of commerce is a bad idea is 1) a large investment of time for no real guarentee of return and 2) the fact you know more of what you are getting due to ability of research.

analogy: before the internet, I used to buy graphics cards at Frys. After the internet put every spec I ever wanted on the product page and the box didn't have all the specs I wanted... well I would buy online even if it was the same price - why? I have all the information I wanted - it was a guarentee so to say of what I was getting

[Anonymous No.861528]

>Media hypes up a market doomsday over some convenient scapegoat
>Markets death spirals due to mass hysteria
>Media declares it over
>Markets stabilize
>Repeat every ~5 years

Am I the only one that sees this? Very few market swings seem happen out of nowhere without the prelude of media instigating it onwards.

[Anonymous No.861542]

>>857456
Or we cut the monetary bullshit an switch to Keynesianism

[Anonymous No.861545]

>>859639
You're a retard, not only will they not raise rates but you're saying the most basic things about the bond market and acting like you're handing down some top secret knowledge

[Anonymous No.862663]

>>858479

Cuckchan /pol/ is drivel.

(√64)chan /pol/ has actual content.

[Anonymous No.862665]

>>856534

Guys. All thats happened is a loss of 2015 gains , we're still at a record high for both the s&p and dow

[Anonymous No.862669]

>>861513
>can't time the market
>implying world events have no impact on share price
>implying humans are always rational

[Anonymous No.862671]

>>861520
Peer2peer lending is good. Lend to small UK/US businesses to help them to grow or invest in capital. I look for ones looking to make capital investments. Much safer IMO.

[Anonymous No.862700]

>>862669
You can time the market when you're expecting a major crash. PE Ratio bitch. Dow theory bitch. It's not that tough.