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How This Ends

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351–360 of 698 posts

Re: How This Ends

#351

Post by polynomial »

fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

> Bonds will be wrecked, stocks will be wrecked, cash is wrecked, even gold

I'm sorry to be that person, but what sort of effect if any might that have on crypto markets?

Re: How This Ends

#352

Post by mrits »

danhak wrote: post #347
jimmaswell wrote: post #228

Earlier quoted context omitted.

Same as always, keep investing in a well-diversified spread. The stock market as a whole will always bounce back. That or society collapses and your numbers in a computer are worthless anyway. This is the first big downturn I've been prepared to invest in, so personally I'm going to buy more than usual. I see it as stocks being on sale.

> The stock market as a whole will always bounce back Japan is the common counterexample. It is entirely possible the stock market will stagnate in the future as the era of American economic hegemony comes to an end.

There are more signs that the American economic power is just really ramping up.

Re: How This Ends

#353

Post by danhak »

mrits wrote: post #352
danhak wrote: post #347

Earlier quoted context omitted.

> The stock market as a whole will always bounce back Japan is the common counterexample. It is entirely possible the stock market will stagnate in the future as the era of American economic hegemony comes to an end.

There are more signs that the American economic power is just really ramping up.

Like what for example?

Re: How This Ends

#354

Post by onlyrealcuzzo »

lamontcg wrote: post #334
fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

This has all happened before. In 1998 Greenspan cut rates due to the Asian financial crisis and worries over Y2K which blew up the dot com bubble. Then they slashed rates down to nearly ZIRP and held them low which blew up the housing and finance bubbles that deflated in 2008. None of this started in 2008. What is different this time is the wage inflation and the unionization drives that we're seeing. The Fed is like…

> I would be worried that this downturn looks more like a depression than a recession.

Why? There's an easy way out of depressions / recessions.

NIRP and QE Infinity part III.

Re: How This Ends

#355

Post by SantalBlush »

tenpies wrote: post #214
chmod600 wrote: post #126

Earlier quoted context omitted.

I motice that you left out real estate from your analysis. RE is interesting because it's both an asset as well as something you can use. So if there's general inflation, it's got both upward pressure (because it's an alternative to rent from a consumer standpoint) and downward pressure (because bonds are an alternative to RE from an investment standpoint).

Aside from the leverage issues other point out in RE, you have to consider the political risk. How safe do you feel that a piece of paper saying that plot of land is yours will hold up when there's a raging mob threatening politicians to do something about homelessness/housing prices/AirBnB/Asset managers holding all the properties? The political risk in the West is at Emerging Markets levels. We've seen G7 nations d…

>there's a raging mob threatening politicians to do something about homelessness/housing prices/AirBnB/Asset managers holding all the properties

It's not just a mob, it's a raging mob.

Re: How This Ends

#356

Post by rsanek »

natly wrote: post #71

Getting really annoying to have to keep track of macro events affecting my life year after year instead of just being able to live a normal peaceful life.

How in particular are you affected? You should be able to ignore this if you live within your means and invest passively with a long-term horizon.

Re: How This Ends

#357

Post by shrimpx »

staticman2 wrote: post #61
freediver wrote: post #31

Earlier quoted context omitted.

> that bond yields would never normalize. Now that they have, there is a risk free alternative to stocks. Treasury bond yields are 3%, inflation is 8.5%, so in real terms you are guaranteed to lose 5.5% annually if you hold bonds. Or basically instead of risk-free gain you are holding gain-free risk.

You are comparing treasury rates a bond will pay out over the next 10 years with inflation over the last year. This is apples and oranges.

There isn’t any scenario right now that makes it attractive to lock your money for 10+ years into 3% yields.

Re: How This Ends

#358

Post by golergka »

thawaya3113 wrote: post #319
cjbgkagh wrote: post #259

Earlier quoted context omitted.

I wonder how many profit making companies are only making profits due to lost making customers. Things could spiral out of hand.

Nearly all of Alphabet and Meta’s profits are not from customers paying them to use their product, but advertisers who are trying to convince FB/GOOG customers to use their products. If those companies start disappearing, or cutting back on ad budgets, FB/GOOG don’t have a business model anymore.

Most of these advertisers are not VC-backed unprofitable companies who are selling dollars for 99 cents, but the boring, ordinary companies who manufacture stuff, ship it from China and make boring, ordinary profit margins. They are not going to be hit harder than the rest of the economy; probably, less.

Re: How This Ends

#359

Post by FollowingTheDao »

PaulDavisThe1st wrote: post #344
FollowingTheDao wrote: post #103

Earlier quoted context omitted.

"The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." Like another comment said, recessions hit the ordinary folks last. But their stress is already evident. Employment numbers can turn on a dime. as can retail sales. But real perso…

RPI is down because of inflation though, not because of a decline in GDP, increase in unemployment etc. So yes, uncharted territory but not necessarily on the recession continent.

RPI is adjusted for inflation, no?

Re: How This Ends

#360

Post by eruleman »

nostrademons wrote: post #338
politician wrote: post #311

Earlier quoted context omitted.

Defense economics will prevent this transition to city-states from happening.

I would've agreed with you until about 5 years ago. The reason I disagree with you now is because technology and methods of war-fighting have changed. Emerging defense technologies like drones, lasers, robots, micro-scale manufacturing, and self-driving vehicles - along with the latest generation of existing weaponry like MANPADS and anti-tank missiles - all preference the defender. They allow a group of relatively u…

Great synopsis of the trends in military technology. Very much in line with The Sovereign Individual, which states that the logic of violence determines the structure of society.
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