2019: The Year the Market Broke and the Fed Rescued the Everything Bubble

Discussion in 'Economics' started by The Humble Bunch, Jan 12, 2020.

  1. Look, I know, I know. Before you guys bash me out in the comments below, hear me out. Now we all know about the Helicopter money the Printing press keeps giving out, but it is getting more evident as each day passes by, as the markets press higher and higher, as the auto industry get's weaker and weaker and as out debt grows forevermore. I mean, Americans are now paying off debt with debt! (Which btw sound completely benign!). This isn't some prediction about a correction, but sort of an axiomatic event that may occur in the future. Now, let's begin. It’s 2020. Do the fundamentals even matter anymore? Will the mathematically impossible to pay back debt ever be an issue? Can the can really be kicked down the road forever? Or have we reached a permanently high plateau? These are questions for CNBC and and the growing number of gurus to answer. In the meantime, we can look at what happened in 2019 to make it the most ridiculous year in financial market history. 2020 is a very important year. Not only because it is the beginning of the decade, but because it is election year. Funds are now restricting withdrawls, and setting up Provisional gates. Just my thoughts.
  2. Real Money

    Real Money

    ECB, BOE, BOJ, Fed, RBA, and BOC printing money and fixing FX rates. The debts were never meant to be paid.

    Basically, this is a banking cartel with government mandate to grow their respective economies. You can't fight this group. Elevated rates (on sovereign debt) are completely alien to the leading economies now.

    This is the Great Moderation 2.0 and inflation will just be downplayed/denied/under reported.

    Extend and pretend!

    If your country doesn't have a multi trillion dollar (and liquid!) gov debt market then you are up the creek in this scenario. No GDP for you!

    Developing economies have to devalue their domestic currencies to stay competitive vis a vis export market. They need FDI.

    Competitive devaluation.

    This is the argument for crypto AFAIK. The fiat that the weak countries are printing is garbage.

    The dollar is king.
    damon_achey likes this.
  3. dozu888


    Stop thinking and start buying! Qqq to 500 and aapl 1000

    So sweet if you listen to my calls. Wake up every morning with $$$$$ already in the account.

    if you still have doubts let me know. I want you to get rich. It’s great.
  4. Imagine if you felt you were better than the rest of us and wanted to rule us completely but you couldn't really be explicit about it. What kind of system would you create? Would it be a system where your wealth = someone else's debt? What happens if you are the first source of debt in the system? Who do you own?

    That's all this is. All you can do is ride it until they pull the rug because too many of the serfs have caught on. When they do, look out.
    The Humble Bunch likes this.
  5. gaussian


    Typically I trade futures but I keep an eye on my watchlists for undervalued companies I will typically purchase 1 year LEAPS on for some extra profit/gambling fun.

    Now prepare for a small incoherent rant...

    For the last 2-3 years I have had nothing but trouble finding value. I do think, at this time, fundamental analysis is dead. For at least the last 6 months the only undervalued companies with decent financials have been O&G and biotech and, unsurprisingly, I've not been doing great recently (though I finished the year up 14% on my LEAPS).

    Everything is deeply overvalued. Valuations practically made up and analysts control everything.

    The problem with fundamental analysis now both in the market and the economy is the numbers are made up. The fed is printing money and by virtue of being the world's single point of economic failure has no concern for the butterfly effect we are staring at. The market must rise at all costs.

    This is going to create (in my eyes) a few very real problems:
    1. Average people are going to be priced out of the market via their retirements.
    2. The final bit of boomers are retiring. If the fed spends more helicopter money propping the market up during the draws on retirements and pensions future generations are going to have a hard time realizing value. Cynically, this is a great way to create an entire generation of people with ball and chain tied to their legs. How can you retire in this environment?
    People are chasing the green not realizing it's ok for a market to sink a little bit. In fact, it's good! I guess this just goes to show why you should never trust an economist...
    Here4money and nooby_mcnoob like this.
  6. %%
    HUH?? Stop thinKING?? NOT sure WHY a buy= mean$ stop thinKING?? LOL;maybe you mean dont oVer think it LOL-LOL ??Like they say in Chicago ''the smarter you are the LONGer it takes.'':D:D:D:D,, :cool::cool::cool::cool::cool::cool::cool::caution::caution:
    dozu888 likes this.
  7. Magic


    Imo vague confusion / concern or theories about how the government is controlling us don't add PnL dollars to the bottom line. We haven't seen anything extremely crazy yet to warrant concern. Rolling 20y market returns are pretty average. Debt to GDP isn't out of control. Things could get a lot weirder before the trend changes. I recall reading the forward yield on the indicies got under the short rate in the tech bubble? We aren't anywhere near that yet.

    Diversification is the best remedy for this brand of uncertainty. Certain asset classes can definitely plateau for a while and get squeezed in the short term but if you maintain exposure to a variety of markets and don't over-leverage; 90% chance you'll be fine over a 1-2 decade time horizon and longer.
    zdave83 likes this.
  8. dozu888


    been saying many times - 'value investing' in the traditional sense is long dead!

    it's all about grabbing market share - bid data big cloud... the tech giants are going to be the entire economy.

    the market been telling you this for a long time!
    murray t turtle likes this.
  9. zdave83


    Generational economic warfare
    Socioeconomic class warfare
    Government mind control of the population
    Orwellian mass enslavement of the working class

    Not sure about all that. I do know that anyone who exercised reasonable financial self-discipline, and plowed money into the markets over the past 10 years, has done really well for themselves. Especially Millennials. What I would have given to have had my savings/401K/IRA's grow like that early in life ! I'm thankful my kids had that opportunity.
    murray t turtle likes this.
  10. Hell this is the best thread I read in a while.
    I feel like you all, that we are in the midst of a market meltup. It will correct in the pre and election phase and Iran and China will be a sword of Damucles above all but compared to Brexit fear plus China fear 2018 its all sunshine.
    #10     Jan 13, 2020
    Overnight and murray t turtle like this.