The Investing Year Ahead

[jas007]

On 8/6/2024 at 8:12 AM, chiang mai said:

Commentators now saying that the markets melt down is merely a reaction to end of the large scale carry trade involving YEN and not much to do with the US economy at all. The Nikkei is up 13% this morning. That seems more plausible to me.

The markets are still wildly leveraged.  So that remains a problem. Let’s hope it remains just “problem.”  

[swissie]

Stocks are bouncing back nicely.  Not followed by "Industrial Metals". Suspicious. Given this, merely a "technical correction" taking place (according to the book).

On the other hand, if stocks should race quickly back to the recent highs, the headlines would read: "The most sinister market manipulation ever has taken place". Followed by a congressional investigation to find out who the "manipulators" were.

OR: If new lows should occur, the members of the FED will start shaking in their boots. = Lowering interest rates recklessly. Boy, we live in "interesting times". Don't we.

[Yellowtail]

On 8/3/2024 at 10:13 PM, swissie said:

How can you tell when the market has bottomed? Every financial institution is desperately looking for you.

 

Easy, that's where I always get out...

[Yellowtail]

On 8/3/2024 at 11:27 PM, jas007 said:

 So another few months until the election and then we’ll see.  I think there’s no way out of seeing more inflation, regardless of who wins the US election. Trump doesn’t seem interested in controlling government borrowing. Ditto for the Democrats.  

The issue is spending, not borrowing, and Trump might curb spending. 

 

Service on the debt now costs more that the defense budget. 

 

[swissie]

On 8/8/2024 at 2:50 AM, Yellowtail said:

Easy, that's where I always get out...

Love it! Your sense of humor is intact.

Next time around, when you are selling, would you tell me a couple of days ahead?

[swissie]

On 8/8/2024 at 2:53 AM, Yellowtail said:

The issue is spending, not borrowing, and Trump might curb spending. 

 

Service on the debt now costs more that the defense budget. 

 

Quote: "Service on the debt now costs more that the defense budget".

For heavens sake, don't spread it around just yet. It will be soon enough that by the election of 2028 this will be the main issue. 

[Thailand J]

Whatever the reason for the latest volatility, I hope it is over.

Volatility index VIX is now at 14.8.

My investments mostly are back to where there were, BRK B is the best performing, up 22% year to date.

[swissie]

On 8/7/2024 at 4:17 PM, swissie said:

Stocks are bouncing back nicely.  Not followed by "Industrial Metals". Suspicious. Given this, merely a "technical correction" taking place (according to the book).

On the other hand, if stocks should race quickly back to the recent highs, the headlines would read: "The most sinister market manipulation ever has taken place". Followed by a congressional investigation to find out who the "manipulators" were.

OR: If new lows should occur, the members of the FED will start shaking in their boots. = Lowering interest rates recklessly. Boy, we live in "interesting times". Don't we.

Above, I wondered what this "correction" caused. Now we know: The "carry trades" that have turned sour was the perpetraitor ! Margin calls, forced liquidations. Fine.

But: Having to sell your stocks to offset your losses in an other "playing field"? How much intertwined "leaverage" can the financial world stand?

 

I find, we are standing on "shaky ground". All of us, as we all are part of the "world economy". Depending on "free money" (low interest rates), to keep the financial "merry go round" turning.

 

[jas007]

On 8/19/2024 at 8:59 PM, swissie said:

Above, I wondered what this "correction" caused. Now we know: The "carry trades" that have turned sour was the perpetraitor ! Margin calls, forced liquidations. Fine.

But: Having to sell your stocks to offset your losses in an other "playing field"? How much intertwined "leaverage" can the financial world stand?

 

I find, we are standing on "shaky ground". All of us, as we all are part of the "world economy". Depending on "free money" (low interest rates), to keep the financial "merry go round" turning.

 

 I always knew there was a carry trade, but I never really realized the extent of it.  Decades of so-called “free money” for Wall Street.  Borrow Yen at zero percent and buy US Treasury bonds yielding substantially more than zero. And all the free money went to purchase US stocks. One bubble inflating another.  They say the unwinding is far from over.  Then again, it could all revert to business as usual to keep the party going.

[swissie]

On 8/23/2024 at 11:08 AM, jas007 said:

 I always knew there was a carry trade, but I never really realized the extent of it.  Decades of so-called “free money” for Wall Street.  Borrow Yen at zero percent and buy US Treasury bonds yielding substantially more than zero. And all the free money went to purchase US stocks. One bubble inflating another.  They say the unwinding is far from over.  Then again, it could all revert to business as usual to keep the party going.

The party will go on because the party MUST go on. Economic "recessions" are no more allowed. If necessary, the Central Banks will provide enough "liquidity" once more to prevent this from happening. "Soft landings" are todays gospel. "Recession" has become a dirty word.

I remember times when recessions were "allowed". Helping to "self clense" economies. The Central Banks only acting to "soften" downturns at best.

The world economy has turned into a drug addict. = free money/low interest rates. Like a heroin addict, higher doses are required to maintain a certain level of "happyness".

Both addictions have one thing in common: There will be no "happy ending".

 

[KhunHeineken]

Arms manufacturing companies, and their subsidiaries, would seem to be a safe haven over the next 12 months.