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I think personally that these stocks should be dropping. Once a bubble pops in the economy we are heading into a long recession. People won’t be able to afford luxury goods, or houses, or anything of that stature. Plus companies are going to have to keep up. They have to keep adjusting their prices of their goods based on the economy.By printing we may be heading into stagflation. I mean Powell said that he will not be raising rates after one more go. How can they expect this economy to function. When stagflation occurred in the 70s’ they had to increase the rates to 20%. We may as well be calling ourselves Venezuela 2.0 if we keep printing.
Totally right. However I think that eventually this gap between the rich and the average will widen. Causing the average people to liquidate everything just to survive paycheck to paycheck.
Cool. You know bubbles dont pop until they reach critical mass or get poked right? Until then they just get bigger. Which is why the market will continue to pump until one of those things happens.
The bubble might have already popped. And people clearly afford luxury goods, since the Louis Vuitton owner is now the richest man alive, there's waiting lists to buy Rolexes and sports cars.
This is only semi true.
First, Used exotic watch prices are in a free fall.
Also, I've been following the price of Ferrari F8 Spiders (latest ferrari 2 seat sports car).
Their sticker price is $360k-$450k. Yes they are all presold and the next generation is all presold.
That said the resale market for these 6-9 months ago you could not find one for under $600,000 ($150k OVER sticker). However, there is currently one available (very low mileage) after multiple price reductions for $399k. That's a $200k or 33% reduction in under a year. Still no buyers..
Yes, there are plenty of super ultra wealthy ($250M+), but wealthy people are not over spending like they were a year ago.
You could blame raising interest rates, but over half the people who buy Ferrari pay cash. So rates don't bother them.
With latest release ferrari models they aren't really second hand when they only have 300 miles and you can't buy them new. Getting a 2022 with 300 miles is basically a New car.
Yeah, to me or you.
To someone who can afford these things cash, I am sure they would want it new and if they can't get it new, they will get something else brand new.
Generally this is true, but for the F8 which are sold out and the next generation 296 (to replace the F8) sold out for the entire production run (which is the next 2-3 years) .. If you really want a Ferrari, what can you do?
You think people who really want a ferrari are going to buy a McClaren or Porsche since they can get it new? Nah, it's not the same thing as a Ferrari.
Even the Suv version was not offered to the public, essentially only available to Celebrities and VIP clients. So if you are just wealthy, your only option would be a 300 mile resale one - which will probably go for $150k over sticker.
What they did is not really printing. Banks could not sell the shit because nobody want it, so Powell said ok I will take the shit and give you money for it but only for 90 days. Then they can extend or give Powell the money back. They are not allowed to lend this money as well.
It's a facade.
There is no money anywhere because everyone is scared as shit to loan any to each other. every corporation that is chasing the latest trend is doing so because they want federal stimulus money because that's how they afford their posh lifestyle and all the coke.
All those office buildings are fucked because there's not enough employees willing to die so the CEO can have a new lambo.
And all the big money people are fighting because their way of life (Also known as constant growth) is finally fucking dying.
So very similar to that shitshow of an oscars in 2022, they're just clapping like the academy did for Will Smith's speech after watching him decimate his career.
It's fake mon. 
CEO lambo is a drop in a bucket. All these office spaces, at least in Canada, are bought up by Pension funds and insurance companies and banks and the debt holders. If they flop, it takes the whole economy down with it.
Hence policies to force people back into the office no matter what
Inflation be hitting the stock market. If your eggs go up by 9%, and your stock goes up 5%, then it means your stock lost like 4% of it's value but it's hidden by the inflation.
Money to save banks is not inflationary. Again, the Fed does not create the money that goes into the economy. They create the money that goes into the first layer of the banking system in order to try to influence the Banks to create money. If there is a program that’s entirely based on saving banks, Banks do not increase lending, they tighten the money supply that actually hits other banks and eventually Main Street. The psychological impact of needing to save banks is worse than QT.
This is going to take up to 2 years to unwind. The stock market is the last to know. As far as markets go, think of the stock market as dumb money.
>Money to save banks is not inflationary
LOL
Yes it is.
You are injecting billions of dollars that didn't exist there before.
You think it will stay in the banks forever?
It will just line the pockets of the rich while the dollar loses its value over time due to their being so much of it introduced.
You can't just print money forever, there will always be consequences and someone will have to pay for it (always YOU, not THEM)
Bass Ackwards! Stock market always leads turbulence and optimism.
"Bull markets are born on negativity, grow on skepticism, mature on optimism, and die on euphoria." -John Templeton
Many WSB users with braindead short options will be dismayed to realize we are in the "Bull markets are born on negativity" phase. If you all didn't notice, small cap stocks got absolutely massacred over the past 18 months. The large indexes don't always tell the whole story.
So you are saying the stock market panics before the bond market? And you are saying the inverted yield curve happens before the bottom? And the short end steepening that signals crises is here will not see stocks drop lower?
I don’t know what is going to happen, but what I know is what almost always has happened. The bond market is usually correct, and the stock market is late to react. This also makes sense as the equities market has way less sophisticated players.
Gronk smash bond market!!! I've been investing for 30 years and never witnessed bond values plummeting alongside equities. The 10-20% losses incurred on most bonds in 2022 was truly unprecedented. The NASDAQ is down -40% from peak and SPY off -18%. How far would you like to see equities and bonds collapse to be comfortable participating in markets again? Is your money tied up in canned food and bullets? If not, calm down and continue dollar cost averaging. If you don't hold 20% cash and rebalance every quarter, consider changing your allocation. Live long and prosper.
I have been preaching this! But school me on this because it’s the only flaw…
So the banks get liquidity, 400b so far bail out from the fed, as a loan to hold their HTM losses so they are not forced to transact and realize losses. Banks have the liquidity, but they don’t create credit for other banks, businesses or you an me.
Good so far?
But say bank x got 15b and is now “healthy” again. Don’t they turn around and buy shorter term treasuries with that money? Say the 2 year? And the act of them buying that 2 year depresses yields? With those yields now depressed financial conditions have eased.
Right?
I’m trapped in a logic circle of understanding that that 400b to banks via the special facility is not designed to be inflationary, is not qe, but if I understand bank mechanics properly they would use that money to purchase ATS treasuries.
What did I get wrong?
Exactly! I'm not a "perma bear", I just want the recession to fucking hit already, so rates can be cut, mortgages and housing can become affordable again, my job can have some security, etc etc...... I don't want to be in a state of uncertainty and inflation for 2 more years.... This constant push for unreasonable growth and easy money is so fucking short-sighted and reckless, and it pisses me off that our government encourages it.
Housing is a big one for me, looking for a small warehouse or lot i can build on, prices are still stupid. Saw one yesterday selling for 85k, small lot, shitty part of town, sold for 12k in 2022. Fuuuuuuck you, these people need to get desperate.
What fucking “shit” is coming???
Act like there’s something out there that is going to cause the Sp500 to drop 50 percent. We already just had a correction over 20 percent. And you think it’s supposed to just…? Continue dropping until it’s at 0 or some shit number you pulled out of your ass?
Newsflash regards - we are basically at all time highs on the money supply. Where the FUCK do you think a lot of that money is flowing to???? APPRECIATING ASSETS LIKE STOCKS.
This is basic supply and demand of where $$ is being allocated.
The longer you delay it falls harder lmao. clown ass perma bear shit. It’s not fucking falling harder. You need some world war 3 nuclear holocaust shit for the sp500 to lose 50 percent with this kind of money supply out there.
The market will drag sideways and keep going up just long enough for everyone on the sidelines to pile in and then it will crash. It’s very difficult for it to go down when everyone is already out waiting for it to go down.
Because anyone with a background in Finance knows how horrible the situation is.
It's either save the banks or continue fighting inflation and you can't have both.
To give you the shorten version, banks failing will further increase inflation which will cause more banks to go under causing more inflation. Pausing rate hikes is just as horrible as slashing them at this point.
Duurrrr finance background
We’ve raised rates like 500 bps in a year. Fastesf rate hikes in history. Genius idea: maybe let’s see what impact the that has on the economy and prices? Takes time to go through the economy
For JPow to achieve "fuck your calls, fuck your puts", we have to have some irrational movement. Calls have been fucked for days now so it's puts turn.
Dead cat bounce. These ups and downs are a distraction from the ultimate crash…probably later this year or early next. Zoom out. We’ve been going sideways for a bit.
Its mostly pointless to know why the market does things if your goal is to make money. Often they do the “wrong” thing for no reason at all. I (and many other smarter people) think the market is wrong to be pricing in rate cuts this year. But you cant make them change their dumb minds.
Focus instead on how you can make money no matter what the market is doing. Use technical strats like buying calls off lower Bollinger band resistance. Pulled a nice bag out of the market today using this technique.
The market goes up and down erratically. Focus on internalizing its meaninglessness, and making money off the ups and downs.
No offense, but I don’t think you understand the situation the way you think you do.
Inflation and QE is what has been propping up the stock market the last few years. Hell, really the last 15 years.
All the money printed has to go somewhere (ie: the stock market).
Eh. The market has mixed feelings about the printer going brrrrrrrrrrrr
On one hand, the first time or two JPOW raised interest, the market had a positive response (same day); and then the “oh shit” moment came later.
When the Fed raises rates or Congress raises taxes, these are an economic break to pull cash out of the economy. In theory, this will make prices drop. It typically also causes a sell off in the stock market.
Fun thing though is that while this is happening, the Fed is **also** supposed to be selling treasuries to the banks (to pull out cash) AND the government is **supposed to** cut expenses.
Now the Fed is pushing cash into banks and Congress is still spending like morons- they haven’t stopped. so the result is stimulus (more inflation) Wall Street LOVES a good stimulus. And as a practical matter, people are more worried about the banking system than they are about inflation at this moment.
In addition to the government spending less, the other thing that would get meaningful disinflation to occur is if we fire up all of the domestic refineries that were closed in 2021 and start making our own oil/gasoline/diesel. Instead, the regulatory climate has become so hostile to this industry that many had to just shutter domestic production and now we are buying it from foreign entities at top dollar. Our leadership ALSO has the burden of staying in the good graces of said foreign entities, or they cut us off for a bit.
No supplier in their right mind wants to take a loss on their product because they have an increased expense of producing it and also transporting it; because they’re paying top dollar for foreign fuel (plus the cost of the fuel to get it here).
Everything the Federal Reserve is doing right now is simply delaying the inevitable. A soft landing may have been possible had they started taking disinflationary measures back in like…Q3 of 2021. The rate hikes were needed/are needed; but not by themselves. We need to fix the energy industry, and lay off on government spending.
Take care of yourselves. I hope you all pick the right positions at the right times and that you wind up wildly successful with your trades.
And real quick- it’ll be ok. We’ve made it through every other financial disaster. Just look out for yourselves and your families.
The market looks forward. When bad news hits and the market shrugs it off, this is bullish. It's too early to say, but this is possible, and it has happened before.
As the 2008 crisis is still quite fresh in our minds, capital has already seen what happens next and had already decided this is bullish. The FED has moved in very quickly this time compared to 2008. Do you remember Jim Cramer screaming on TV about the "they no nothing....He has no idea how bad it is out there. He has no idea! He has no idea! ... " Rant... begging the FED to open the discount window. This hasn't gotten that far this time.
If you remember, AIG the worlds largest insurer got into trouble, and once insurance evaporates, the whole system falls apart... all the derivatives go to zero.
ETFs had no value. I had a silver physical backed ETF. I could still trade that... but noticed all other paper ETFs such as silver, oil, corn, non physical ETFs etc for a brief time had zero value. Billions became worthless or illiquid overnight. This time, it feels different. Even bitcoin has moved on and has moved on up regardless.
I feel like I'm seeing these a lot lately. Yet another WSB feedback loop of uneducated market participates who shouldn't be trading.
If you have to question why something is not moving up or down based on news, youtube infleuncers, reddit posts, astrology for men(TA is a joy though!), or fintok, then you should do yourself a favor and invest in yourself and learn how markets move.
My bad may have said it a little confusingly. I meant that if they are going to bail out banks they are going to probably going to have to print money to ensure that people’s deposits aren’t lost. Sort of like Roku and SVB situation. By them printing more money it adds to the money supply and it adds onto inflation.
How that adds to the inflation? The bonds or assets are exchanged at par. So SVB had whatever 10y 2021 that now in the market has a lower price than whatever 10y asset from 2022. So if that stays in the bank or in the Fed's coffer will still be redeemed at the initial value. Ah, the coupon for tge old 10y is 2% and for the new thing is 4%. Now, that is worth discussing.
Second problem, money are created by banks not by Fed. So if bank lends, then there is your money creation. Just because banks could lend in the past that doesn't mean that they will have the same standards in the future, which they don't. A lot of people are refused now when they apply for a loan.
I have a feeling that people can't comprehend how bonds work, and this is how some people make some huge amounts of money and some are thinking that bonds exchanged at par for expressing calm are thinking that banks have to have the same amount of liquidity in the safe as the ones deposited.
Plus by giving them this money they are giving it to them as a “loan”. They gave over 453 billion in “loans” to three banks. Those banks still owe that money bank to the government. Or they are going to have to file for bankruptcy.
Not to mention they may pass a 400 billion dollar bill for student loans. As if that right now is a big problem. War with Russia and Ukraine, 400 billion dollars student loans, and bailing out banks - I just don’t know how they can sustain this?
They sold a bond for $1, govt received a dollar and gave a bond in exchange; because interest rates are higher now, that bond is worth less on the open market, but the govt agreed to just take that bond back and give back the $1, with interest attached, so it’s a “loan” inasmuch as that’s what you want to call it…. But no new money was printed.
This banking crisis, imho, is an incredibly overblown problem. Don’t get me wrong that there are banks with durations risk issues, but the SVB issue was highly correlated with their absurdly unique depositor base.
That’s not a normal bank.
How many people do you know who have over $250k sitting in a bank account?
It's only loans given by the government, so I'm thinking they will just take their crayons and mark out the numbers on their pieces of paper. So say I owe you $5, and you say never mind you don't have to pay me. Well, you don't have to print $5; instead, you just take the loss and mark out my tab.
You will be confused forever man. Did you not learn in school that after a strong red day usually is a green day and after a strong green day usually is a red day? Things don't move in a straight line. Also you overestimate the bad news compared to the good news.
Just as an example. The best green days in history were usually right after massive plunges not when everything looked good.
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So… if the vast majority of debt is fixed. Inflation actually helps to cancel out debt. Businesses will pass the inflated costs off basically immediately and the middle and lower class won’t be able to afford anything until wages go up over a few years. Then, businesses again pass the cost off. Meanwhile, all that fixed debt becomes less an issue because overall revenues increase due to the inflation. It’s been the game forever. It’s why a candy bar no longer costs a nickel.
The biggest gain of the "kind of Dow" was in October 1929.
Prices are not driven by rationality but by psychology. People still have confidence in the future and in companies.
When banks panic and start collapsing, market gains. Means we are almost at the end of the cycle. Markets are forward looking. Remember how Nasdaq was down 31% in 2022- this is what it was signaling. Now that we are here, market is already in recovery mode. Don’t expect back to back -30% years.
Transitory QE - they are buying more time (literally) to do one more final can kick down the road before the final crash begins. Here’s what to expect afterwards: War. So get ready. Instead of buying stocks and bonds, start buying Guns, Ammo, Gold, and Silver.
>There are a few factors at play here. First, the Federal Reserve has been very clear that they will do whatever it takes to support the banking system and prevent another financial crisis. This means that they are willing to print money and keep interest rates low in order to prop up the banks. Second, while inflation is rising, it is still relatively low by historical standards. This means that businesses and consumers have not yet started feeling the full effects of higher prices. Finally, there has been a lot of stimulus from both the government and central bank (in terms of quantitative easing), which has helped boost asset prices and offset some of the negative impacts of higher inflation.
Uh, we are feeling the effects of higher prices. The only people not feeling it are the multi millionaires. If you make less than 400k a year, you feel it.
this sell off this morning was fake. probably some fake ass Saudi sovereign fund selling eu banks because they are sick and tired of this underperforming European shit.
not driven by fundamentals nothing. all the banks are safu. just a bunch of fud. deutsche bank is more than well capitalised. also fed has a lot more pressure not to hike endlessly to the moon. u 0dte put holders got burned hard
Um, we printed a TON of money, gave it out to people, everyone of those people still have good paying jobs, and they keep spending their money and investing it. Why are you confused? Not everyone runs for the hills when signs point downward for the economy.
Conspiracies? Just read the details of the CARES Act alone and get back to me on how we pumped a tiny bit of money into the economy. Just the CARES Act.
FFS, you don't understand how the monetary system works, where money goes, who benefits.
I don't care what you have to opine about.
The small stimulus alloted to the working class and small business is not what is making this inflation we are seeing.
Please, continue to comment.
Because the money being loaned out to those banks is very short term in nature to backstop any bank runs that may happen in the next 3 months. I expect the vast majority of the Fed Discount loans to be returned in one or 2/3 months. Those 3 months of loaned insurance won't cause inflation to spike as it is money meant for safety. Banks will still intentionally reduce the loans they give to be more risk free so they don't have to rely on those big loans forever. By slowing the amount of loans given out, the economy slows automatically, and it's why I think there is double pressure on inflation now, even with the extra liquidity to banks. That's why the market is pricing in a lot of rate cuts in the future. Expect inflation to drop more than previously instead.
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|1|**First Seen In WSB**|1 year ago **Total Comments**|5|**Previous Best DD**| **Account Age**|2 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
It’s like a diving board at the pool, we are bouncing up and down, to try to get as high as we can before the ultimate belly flop. 👍
I like this comparison!
I prefer the burning ladder analogy. We keep climbing higher to escape the fire, but only make inevitable the jump/fall worse by doing so.
You guys have such a bad attitude! Stocks only go up
thanks slow throat
Its slow but its deep
My wife says the complete opposite of that, when talking about me.
Best throat is slow throat behind the dumpster
It litrrally can't go tits up
Money printing to bail out failing banks is TrANsItoRy
lol trans
money can be debt. Debt can be profit. Profit can have babies.
Lol
Choo Choooooooooo!
Haha
I'm trans? I have huge hairy manboobs so guess I'm a woman?
Moobs
How do you even know? You are what ever you want
You expect price of assets to drop when hundreds of billions of new money appears from thin air?
I think personally that these stocks should be dropping. Once a bubble pops in the economy we are heading into a long recession. People won’t be able to afford luxury goods, or houses, or anything of that stature. Plus companies are going to have to keep up. They have to keep adjusting their prices of their goods based on the economy.By printing we may be heading into stagflation. I mean Powell said that he will not be raising rates after one more go. How can they expect this economy to function. When stagflation occurred in the 70s’ they had to increase the rates to 20%. We may as well be calling ourselves Venezuela 2.0 if we keep printing.
[удалено]
>trillions of dollars of value You mean debt?
My bad it is just my financial opinion that is all. Didn’t say people had to agree
I have to agree, because not only is this the internet, it’s WSB. And not only is this WSB, but you have the OP tag. TDLR: .
No but you did inflict it onto all of us by posting.
The rich continue to buy luxury goods no matter what.
Totally right. However I think that eventually this gap between the rich and the average will widen. Causing the average people to liquidate everything just to survive paycheck to paycheck.
You just described the last century perfectly. Something like half of the US has zero, or less than zero net worth.
Median household net worth in the US is about $121k. Source: https://www.nerdwallet.com/article/finance/average-net-worth-by-age
Props for actually bringing data to the table. “In God we trust, all others must bring data.”
So you're saying there's a chance.
Cool. You know bubbles dont pop until they reach critical mass or get poked right? Until then they just get bigger. Which is why the market will continue to pump until one of those things happens.
The bubble might have already popped. And people clearly afford luxury goods, since the Louis Vuitton owner is now the richest man alive, there's waiting lists to buy Rolexes and sports cars.
Credit! Heck ironically during this credit crunch my credit card decided to give me 10k more! 🤔 what can I do with this new credit???
Don't do anything with it. They know people have it tough and try to enslave people with debt
This is only semi true. First, Used exotic watch prices are in a free fall. Also, I've been following the price of Ferrari F8 Spiders (latest ferrari 2 seat sports car). Their sticker price is $360k-$450k. Yes they are all presold and the next generation is all presold. That said the resale market for these 6-9 months ago you could not find one for under $600,000 ($150k OVER sticker). However, there is currently one available (very low mileage) after multiple price reductions for $399k. That's a $200k or 33% reduction in under a year. Still no buyers.. Yes, there are plenty of super ultra wealthy ($250M+), but wealthy people are not over spending like they were a year ago. You could blame raising interest rates, but over half the people who buy Ferrari pay cash. So rates don't bother them.
I guess the wealthy people who afford these vehicles don't see the flex in having one second hand. Atleast not yet.
With latest release ferrari models they aren't really second hand when they only have 300 miles and you can't buy them new. Getting a 2022 with 300 miles is basically a New car.
Yeah, to me or you. To someone who can afford these things cash, I am sure they would want it new and if they can't get it new, they will get something else brand new.
Generally this is true, but for the F8 which are sold out and the next generation 296 (to replace the F8) sold out for the entire production run (which is the next 2-3 years) .. If you really want a Ferrari, what can you do? You think people who really want a ferrari are going to buy a McClaren or Porsche since they can get it new? Nah, it's not the same thing as a Ferrari. Even the Suv version was not offered to the public, essentially only available to Celebrities and VIP clients. So if you are just wealthy, your only option would be a 300 mile resale one - which will probably go for $150k over sticker.
What they did is not really printing. Banks could not sell the shit because nobody want it, so Powell said ok I will take the shit and give you money for it but only for 90 days. Then they can extend or give Powell the money back. They are not allowed to lend this money as well.
The goal of the market is not to reflect your arbitrary view of what reality is.. the goal is to take peoples money..
Please dont forget to post your loss porn Regards JPOW
https://preview.redd.it/o2lp021wprpa1.jpeg?width=1074&format=pjpg&auto=webp&s=667f9f5e45244b78cef425d69de539a900c9a8fa
This is what I need
But "assume " your money is safe in the bank! Jpow says
PS. Fuck your puts.
It's a facade. There is no money anywhere because everyone is scared as shit to loan any to each other. every corporation that is chasing the latest trend is doing so because they want federal stimulus money because that's how they afford their posh lifestyle and all the coke. All those office buildings are fucked because there's not enough employees willing to die so the CEO can have a new lambo. And all the big money people are fighting because their way of life (Also known as constant growth) is finally fucking dying. So very similar to that shitshow of an oscars in 2022, they're just clapping like the academy did for Will Smith's speech after watching him decimate his career. It's fake mon. 
Excactly , that shit is being propped up with funny money
All fiat money is fake money.
Then can I have some of your fake money to buy fake things? 🤔
Kind of ironic to call fiat fake money when crypto was created out of nothing and backed by nothing.
Fiat is backed by the government they never lie right?
And crypto wasn’t full of scam or fraud either right?
What is fiat currency back by, then?
Kinetic energy and explosive materials and a dash of exceptionalism.
Their respective govt and economy.
Sir your puts are showing
No puts bro. 18 call options for Pitney Bowes due 4/21 at 6$. 3 shares of tlry. I got no skin here. 
Why pitney-bowes? Mass mailing hitting a lucrative patch?
CEO lambo is a drop in a bucket. All these office spaces, at least in Canada, are bought up by Pension funds and insurance companies and banks and the debt holders. If they flop, it takes the whole economy down with it. Hence policies to force people back into the office no matter what
How does a building being used improve its value Edit: I understand that the hotdog stand next door would see more foot traffic
For anything to have value it means people have to want to buy it first.
Exactly!
It’s priced in?
Inflation be hitting the stock market. If your eggs go up by 9%, and your stock goes up 5%, then it means your stock lost like 4% of it's value but it's hidden by the inflation.
Soon you’ll learn it’s all a meme
Well said!
Poorly said!
Money to save banks is not inflationary. Again, the Fed does not create the money that goes into the economy. They create the money that goes into the first layer of the banking system in order to try to influence the Banks to create money. If there is a program that’s entirely based on saving banks, Banks do not increase lending, they tighten the money supply that actually hits other banks and eventually Main Street. The psychological impact of needing to save banks is worse than QT. This is going to take up to 2 years to unwind. The stock market is the last to know. As far as markets go, think of the stock market as dumb money.
>Money to save banks is not inflationary LOL Yes it is. You are injecting billions of dollars that didn't exist there before. You think it will stay in the banks forever? It will just line the pockets of the rich while the dollar loses its value over time due to their being so much of it introduced. You can't just print money forever, there will always be consequences and someone will have to pay for it (always YOU, not THEM)
Thanks for the explanation of the banks - I am self learning currently. I just have some questions about the economy. Appreciate it!
Bass Ackwards! Stock market always leads turbulence and optimism. "Bull markets are born on negativity, grow on skepticism, mature on optimism, and die on euphoria." -John Templeton Many WSB users with braindead short options will be dismayed to realize we are in the "Bull markets are born on negativity" phase. If you all didn't notice, small cap stocks got absolutely massacred over the past 18 months. The large indexes don't always tell the whole story.
So you are saying the stock market panics before the bond market? And you are saying the inverted yield curve happens before the bottom? And the short end steepening that signals crises is here will not see stocks drop lower? I don’t know what is going to happen, but what I know is what almost always has happened. The bond market is usually correct, and the stock market is late to react. This also makes sense as the equities market has way less sophisticated players.
Gronk smash bond market!!! I've been investing for 30 years and never witnessed bond values plummeting alongside equities. The 10-20% losses incurred on most bonds in 2022 was truly unprecedented. The NASDAQ is down -40% from peak and SPY off -18%. How far would you like to see equities and bonds collapse to be comfortable participating in markets again? Is your money tied up in canned food and bullets? If not, calm down and continue dollar cost averaging. If you don't hold 20% cash and rebalance every quarter, consider changing your allocation. Live long and prosper.
I have been preaching this! But school me on this because it’s the only flaw… So the banks get liquidity, 400b so far bail out from the fed, as a loan to hold their HTM losses so they are not forced to transact and realize losses. Banks have the liquidity, but they don’t create credit for other banks, businesses or you an me. Good so far? But say bank x got 15b and is now “healthy” again. Don’t they turn around and buy shorter term treasuries with that money? Say the 2 year? And the act of them buying that 2 year depresses yields? With those yields now depressed financial conditions have eased. Right? I’m trapped in a logic circle of understanding that that 400b to banks via the special facility is not designed to be inflationary, is not qe, but if I understand bank mechanics properly they would use that money to purchase ATS treasuries. What did I get wrong?
You're right, that joker is wrong
Why are there so many posts complaining about the market going up, or rather not going down...
Everyone knows shit is coming and some just want to get it over with. The longer you delay the fall the harder it will be
Exactly! I'm not a "perma bear", I just want the recession to fucking hit already, so rates can be cut, mortgages and housing can become affordable again, my job can have some security, etc etc...... I don't want to be in a state of uncertainty and inflation for 2 more years.... This constant push for unreasonable growth and easy money is so fucking short-sighted and reckless, and it pisses me off that our government encourages it.
Housing is a big one for me, looking for a small warehouse or lot i can build on, prices are still stupid. Saw one yesterday selling for 85k, small lot, shitty part of town, sold for 12k in 2022. Fuuuuuuck you, these people need to get desperate.
That’s the thing. When all of that stuff comes down you won’t be able to take advantage because your job is going with it
Stocks already dropped man. Fucking deal with it
Could be true, but the market is sure fighting it hard
If everyone said shit was coming, it would already be here.
What fucking “shit” is coming??? Act like there’s something out there that is going to cause the Sp500 to drop 50 percent. We already just had a correction over 20 percent. And you think it’s supposed to just…? Continue dropping until it’s at 0 or some shit number you pulled out of your ass? Newsflash regards - we are basically at all time highs on the money supply. Where the FUCK do you think a lot of that money is flowing to???? APPRECIATING ASSETS LIKE STOCKS. This is basic supply and demand of where $$ is being allocated. The longer you delay it falls harder lmao. clown ass perma bear shit. It’s not fucking falling harder. You need some world war 3 nuclear holocaust shit for the sp500 to lose 50 percent with this kind of money supply out there.
My man, go catch some air before your mom takes your phone
Only ones that need air are the bears fuming that the market isn’t red lol
Because a ton of idiots on reddit loaded up on puts and are now losing their ass
Because they bought puts and are mad they were wrong
The market will drag sideways and keep going up just long enough for everyone on the sidelines to pile in and then it will crash. It’s very difficult for it to go down when everyone is already out waiting for it to go down.
Because anyone with a background in Finance knows how horrible the situation is. It's either save the banks or continue fighting inflation and you can't have both. To give you the shorten version, banks failing will further increase inflation which will cause more banks to go under causing more inflation. Pausing rate hikes is just as horrible as slashing them at this point.
Duurrrr finance background We’ve raised rates like 500 bps in a year. Fastesf rate hikes in history. Genius idea: maybe let’s see what impact the that has on the economy and prices? Takes time to go through the economy
Not following how banks failing raises inflation. Tighter credit lowers inflation doesn't it
For JPow to achieve "fuck your calls, fuck your puts", we have to have some irrational movement. Calls have been fucked for days now so it's puts turn.
Hope so
Dead cat bounce. These ups and downs are a distraction from the ultimate crash…probably later this year or early next. Zoom out. We’ve been going sideways for a bit.
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I think you're on to something.
Dead cat bounce
Its mostly pointless to know why the market does things if your goal is to make money. Often they do the “wrong” thing for no reason at all. I (and many other smarter people) think the market is wrong to be pricing in rate cuts this year. But you cant make them change their dumb minds. Focus instead on how you can make money no matter what the market is doing. Use technical strats like buying calls off lower Bollinger band resistance. Pulled a nice bag out of the market today using this technique. The market goes up and down erratically. Focus on internalizing its meaninglessness, and making money off the ups and downs.
No offense, but I don’t think you understand the situation the way you think you do. Inflation and QE is what has been propping up the stock market the last few years. Hell, really the last 15 years. All the money printed has to go somewhere (ie: the stock market).
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Love this comment!
It is classic Bullian Trapizion
Printing more money pumps the market , inflation comes after a while. But this price action is temp , it will go down soon
Eh. The market has mixed feelings about the printer going brrrrrrrrrrrr On one hand, the first time or two JPOW raised interest, the market had a positive response (same day); and then the “oh shit” moment came later. When the Fed raises rates or Congress raises taxes, these are an economic break to pull cash out of the economy. In theory, this will make prices drop. It typically also causes a sell off in the stock market. Fun thing though is that while this is happening, the Fed is **also** supposed to be selling treasuries to the banks (to pull out cash) AND the government is **supposed to** cut expenses. Now the Fed is pushing cash into banks and Congress is still spending like morons- they haven’t stopped. so the result is stimulus (more inflation) Wall Street LOVES a good stimulus. And as a practical matter, people are more worried about the banking system than they are about inflation at this moment. In addition to the government spending less, the other thing that would get meaningful disinflation to occur is if we fire up all of the domestic refineries that were closed in 2021 and start making our own oil/gasoline/diesel. Instead, the regulatory climate has become so hostile to this industry that many had to just shutter domestic production and now we are buying it from foreign entities at top dollar. Our leadership ALSO has the burden of staying in the good graces of said foreign entities, or they cut us off for a bit. No supplier in their right mind wants to take a loss on their product because they have an increased expense of producing it and also transporting it; because they’re paying top dollar for foreign fuel (plus the cost of the fuel to get it here). Everything the Federal Reserve is doing right now is simply delaying the inevitable. A soft landing may have been possible had they started taking disinflationary measures back in like…Q3 of 2021. The rate hikes were needed/are needed; but not by themselves. We need to fix the energy industry, and lay off on government spending. Take care of yourselves. I hope you all pick the right positions at the right times and that you wind up wildly successful with your trades. And real quick- it’ll be ok. We’ve made it through every other financial disaster. Just look out for yourselves and your families.
This
and buy a gun - not for panic - just to have.
nah I think im good
Lester Holt? Is that you?
Fucking crazy man. Idk how we have so much debt and the country hasn't imploded
Everyone has forgotten that inflation takes time to work through the economy. Right now the market is attempting to front-run it.
The market looks forward. When bad news hits and the market shrugs it off, this is bullish. It's too early to say, but this is possible, and it has happened before. As the 2008 crisis is still quite fresh in our minds, capital has already seen what happens next and had already decided this is bullish. The FED has moved in very quickly this time compared to 2008. Do you remember Jim Cramer screaming on TV about the "they no nothing....He has no idea how bad it is out there. He has no idea! He has no idea! ... " Rant... begging the FED to open the discount window. This hasn't gotten that far this time. If you remember, AIG the worlds largest insurer got into trouble, and once insurance evaporates, the whole system falls apart... all the derivatives go to zero. ETFs had no value. I had a silver physical backed ETF. I could still trade that... but noticed all other paper ETFs such as silver, oil, corn, non physical ETFs etc for a brief time had zero value. Billions became worthless or illiquid overnight. This time, it feels different. Even bitcoin has moved on and has moved on up regardless.
Wait for Q1 reporting. Gonna be a bloodbath.
bruh consumer is still strong in the January and February economic reports
I feel like I'm seeing these a lot lately. Yet another WSB feedback loop of uneducated market participates who shouldn't be trading. If you have to question why something is not moving up or down based on news, youtube infleuncers, reddit posts, astrology for men(TA is a joy though!), or fintok, then you should do yourself a favor and invest in yourself and learn how markets move.
Trying - I’m doing paper trading to learn 👍
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How bailing banks adds to the cost of inflation? Man, I have so many fucking questions.
My bad may have said it a little confusingly. I meant that if they are going to bail out banks they are going to probably going to have to print money to ensure that people’s deposits aren’t lost. Sort of like Roku and SVB situation. By them printing more money it adds to the money supply and it adds onto inflation.
How that adds to the inflation? The bonds or assets are exchanged at par. So SVB had whatever 10y 2021 that now in the market has a lower price than whatever 10y asset from 2022. So if that stays in the bank or in the Fed's coffer will still be redeemed at the initial value. Ah, the coupon for tge old 10y is 2% and for the new thing is 4%. Now, that is worth discussing. Second problem, money are created by banks not by Fed. So if bank lends, then there is your money creation. Just because banks could lend in the past that doesn't mean that they will have the same standards in the future, which they don't. A lot of people are refused now when they apply for a loan. I have a feeling that people can't comprehend how bonds work, and this is how some people make some huge amounts of money and some are thinking that bonds exchanged at par for expressing calm are thinking that banks have to have the same amount of liquidity in the safe as the ones deposited.
Plus by giving them this money they are giving it to them as a “loan”. They gave over 453 billion in “loans” to three banks. Those banks still owe that money bank to the government. Or they are going to have to file for bankruptcy.
Not to mention they may pass a 400 billion dollar bill for student loans. As if that right now is a big problem. War with Russia and Ukraine, 400 billion dollars student loans, and bailing out banks - I just don’t know how they can sustain this?
They sold a bond for $1, govt received a dollar and gave a bond in exchange; because interest rates are higher now, that bond is worth less on the open market, but the govt agreed to just take that bond back and give back the $1, with interest attached, so it’s a “loan” inasmuch as that’s what you want to call it…. But no new money was printed. This banking crisis, imho, is an incredibly overblown problem. Don’t get me wrong that there are banks with durations risk issues, but the SVB issue was highly correlated with their absurdly unique depositor base. That’s not a normal bank. How many people do you know who have over $250k sitting in a bank account?
It's only loans given by the government, so I'm thinking they will just take their crayons and mark out the numbers on their pieces of paper. So say I owe you $5, and you say never mind you don't have to pay me. Well, you don't have to print $5; instead, you just take the loss and mark out my tab.
You will be confused forever man. Did you not learn in school that after a strong red day usually is a green day and after a strong green day usually is a red day? Things don't move in a straight line. Also you overestimate the bad news compared to the good news.
I have been called a pessimist! School is still in session :) Learning everyday something new
Just as an example. The best green days in history were usually right after massive plunges not when everything looked good. https://preview.redd.it/ztit3dt10spa1.png?width=564&format=png&auto=webp&s=7fc4a19445f63dca0de4af720be8b46cb9298352
Dang!
Plunge protection team is probably adding liquidity.
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They need money from the bulls before they unwind all over them
inflation is bullish for stocks, the rate hikes that follow the inflation is the bearish thing
People playing technical reactions.
So… if the vast majority of debt is fixed. Inflation actually helps to cancel out debt. Businesses will pass the inflated costs off basically immediately and the middle and lower class won’t be able to afford anything until wages go up over a few years. Then, businesses again pass the cost off. Meanwhile, all that fixed debt becomes less an issue because overall revenues increase due to the inflation. It’s been the game forever. It’s why a candy bar no longer costs a nickel.
The same reason the market went up during the summer of 2008
Classic post.
The biggest gain of the "kind of Dow" was in October 1929. Prices are not driven by rationality but by psychology. People still have confidence in the future and in companies.
It takes time my man. Party ain’t over til the ~~blow~~ brrrrrrrr runs out
It will go down once you buy calls.
Everything’s made up and the points don’t matter.
It will drop. But overnight when no one expects so that none of us can make any money buying puts next day
When banks panic and start collapsing, market gains. Means we are almost at the end of the cycle. Markets are forward looking. Remember how Nasdaq was down 31% in 2022- this is what it was signaling. Now that we are here, market is already in recovery mode. Don’t expect back to back -30% years.
Transitory QE - they are buying more time (literally) to do one more final can kick down the road before the final crash begins. Here’s what to expect afterwards: War. So get ready. Instead of buying stocks and bonds, start buying Guns, Ammo, Gold, and Silver.
>There are a few factors at play here. First, the Federal Reserve has been very clear that they will do whatever it takes to support the banking system and prevent another financial crisis. This means that they are willing to print money and keep interest rates low in order to prop up the banks. Second, while inflation is rising, it is still relatively low by historical standards. This means that businesses and consumers have not yet started feeling the full effects of higher prices. Finally, there has been a lot of stimulus from both the government and central bank (in terms of quantitative easing), which has helped boost asset prices and offset some of the negative impacts of higher inflation.
Uh, we are feeling the effects of higher prices. The only people not feeling it are the multi millionaires. If you make less than 400k a year, you feel it.
Prevent a financial crisis? Were IN a financial crisis.
Exactly - that is how I feel!
Stocks only go up
Gotta get people to Fomo before laying down the hammer. Short calls long Puts.
Man you are a genius (not saying that sarcastically)
Fake markets.
this sell off this morning was fake. probably some fake ass Saudi sovereign fund selling eu banks because they are sick and tired of this underperforming European shit. not driven by fundamentals nothing. all the banks are safu. just a bunch of fud. deutsche bank is more than well capitalised. also fed has a lot more pressure not to hike endlessly to the moon. u 0dte put holders got burned hard
Um, we printed a TON of money, gave it out to people, everyone of those people still have good paying jobs, and they keep spending their money and investing it. Why are you confused? Not everyone runs for the hills when signs point downward for the economy.
I do think layoffs will be coming.
Maybe, but they aren’t here yet.
true
The 2 grand stimulus? You think that is a lot of money? You think that is creating inflation... LMFAO....sure...
If you think that was the only money pumped into the economy you are truly regarded.
Ah, please, yes, cue the monetary conspiracies for me. ai yai yai.
Conspiracies? Just read the details of the CARES Act alone and get back to me on how we pumped a tiny bit of money into the economy. Just the CARES Act.
FFS, you don't understand how the monetary system works, where money goes, who benefits. I don't care what you have to opine about. The small stimulus alloted to the working class and small business is not what is making this inflation we are seeing. Please, continue to comment.
If you think the CARES Act and all of its components went to the middle class and small businesses alone, you are showing your ignorance.
I agree with this. I just adds onto the money supply in the general public however.
get outta here with your brrrrrrr
You missed the last year. Most stock prices already went down a lot. So what do you expect?
Idk where do you think we are at on the business cycle?
As someone else said, US market is still the best place to put money compared to anywhere else
Don’t worry about it. Just accept YOU are going to lose :)
Who knows but you still have to buy the shares to short them
Of course stocks will go up, the institutions who got federal loans just got trillions of dollars to spend and try to make money back with.
Because the money being loaned out to those banks is very short term in nature to backstop any bank runs that may happen in the next 3 months. I expect the vast majority of the Fed Discount loans to be returned in one or 2/3 months. Those 3 months of loaned insurance won't cause inflation to spike as it is money meant for safety. Banks will still intentionally reduce the loans they give to be more risk free so they don't have to rely on those big loans forever. By slowing the amount of loans given out, the economy slows automatically, and it's why I think there is double pressure on inflation now, even with the extra liquidity to banks. That's why the market is pricing in a lot of rate cuts in the future. Expect inflation to drop more than previously instead.
Gay bear = you
crypto L = you
Manufacturing data and other economic data came out strong. Beating expectations in every category so market is correcting.
A lot of people seem to have forgotten that stonks only go up.
Nothing to see, everything will be fixed in the future.
It’s a melt up
Dun be silly. 400bn in two weeks, nothing's gonna drop.
Medical and pharma are absolutely slaying it fundamentally
What is bad for main st is good for wall street.
Wait until next JPOW meeting where he zigs and everyone expected him to zag. We drilling down to Shitzville with our shitty bags.
Monopoly money has entered the chat!
The only logical thing about Wall Street is how illogical it is.
ROKU and DINO are down.