Financial markets

[Sharpe]

Cpi will be interesting next week!

[Tron]

[Tron]

[Tron]

Here is a summary of the rock and hard place in which the Federal Reserve currently finds itself.

 

US Tax revenue $4T

minus: Entitlements $2.8T

minus: Defense $0.8T

leaves: $0.4T

 

Annual interest expense is now approx $400B (at historic low coupons)

 

Interest coverage ratio is about 1X (a solid CCC credit rating ratio if the US were a corporation.)

 

The debt spiral accelerates as new debt is issued at HIGHER coupon.

 

For example-$30T in outstanding debt x 3.2% coupon is $1T in annual interest expense...(an increase of $600B/yr)

 

This is BEFORE any new deficits AND a reduction in revenues due to lower capital gains taxes collected. 

 

So the debt spiral grows organically even in the absence of new spending.

 

How does the US Treasury fund the debt spiral?

 

QE infinity.

 

 

Unless of course the Fed ultimately decides to follow the IMF financial repression model >>>>Yield Curve Control plus hot inflation to grow GDP faster than coupon grows. This also will result in: 

 

 

Either way…the average American gets fucked hard.

 

The United States (and the rest of the world for that matter) is being run by morons at all levels …….especially near the top.

[Tron]

[Tron]

For those keeping score at home, USD/JPY just hit a multi-decade high of 142.

Japan is the largest foreign holder of US treasuries in the world.

Weaker Yen means more incentive for Japan to dump US treasuries to defend the Yen.

All while the Fed is doing QT. Good luck bond holders.

 

 

[Tron]

There it is. Japanese 10 year yield back above .25% At .25% the BoJ is forced to buy bonds with freshly printed Yen….and the central bank already owns over 50% of all Japanese government bonds.

1. Print Yen to buy bonds and LNG supplies
2. People sell bonds to avoid being paid back in debased Yen
3. Yields go up as bonds sell off

Rinse and repeat.

[Tron]

If you believe the bear market is over, I have $170 trillion of unfunded liabilities to sell you.

[Tron]

Bonds are puking and the liquidity of the world's "deepest and most important debt market" (USTs) showing cracks…..now trading like a low liquidity shitcoin.

[Tron]

 

Edited September 13, 2022 by Tron

[Tron]

 

[Tron]

Yep
 

https://www.bloomberg.com/news/articles/2022-09-13/bofa-s-cabana-says-fed-likely-to-overdo-it-and-cause-a-recession?leadSource=uverify wall

 

 

Edited September 15, 2022 by Tron

[Sammy]

On 8/26/2022 at 5:20 PM, Tron said:

Ok I dont care what your political views are or how far off center. Thats funny. Especially since %92 gives it a thumbs up.

[Tron]

Expect big market moves today.

Global bonds selling off, US10Y on cusp of new highs.

FedEx -20% after hours yesterday, global shipping volumes falling hard.

JGB's still hitting the .25% YCC limit

China -New property data

Gold dumping

I have only covered about 20% of my short positions. 
 

 

 

The last time the 2yr was this high, national debt was about $8 trillion…..we now have $31 trillion. The Fed is playing with fire. When tax receipts begin to plummet, the debt death spiral I talked about when I first started writing these posts becomes a foregone conclusion. Tighten your chin straps.

 

 

Edited September 16, 2022 by Tron

[Tron]

https://www.zerohedge.com/markets/jay-powell-breathing-weapon-mass-destruction

[Sharpe]

[FunStick]

Alright, Looks like I better chime in a bit.  Some of you already know how I invest and what I have and also know im well off for the next 12 generations.  However, everything is risky.   All financial markets are controlled and manipulated by politicians.  this is common sense.  The markets are only fucked up because of very bad unbeneficial policies put in place by the current administration and by design to steal our wealth from us.  

Cryptos - Not all a scam if you invest in the right assets and if you don't understand crypto, then do NOT get into it and if you want to get into it, find someone who is in it and that you trust.  I helped a few on this thread and I been around for 14 years in XI.  I won't misguide you but everything is risky.  The best thing to do is 1. buy the proper assets (BTC, ETH, BNB, just to name a few and hold like your falling off a bridge.  2.  - Savings are in fact getting eaten up with artificial inflation which basically means the current admin did this on purpose and this is a result of bad policies for the common american, vs the wealthy.  We lose and they and they're friends get richer off the poor.  So my best advise is to park your cash into a CeFi that pays more than a bank (Coinbase, Gemini) these are the only fucking two that are good. I am not sure about FTX yet.  I still need to research more.  

Stock Markets -  a lot of you are forgetting that we in the US rule the world.  We provide money (our tax money) to other countries and they provide us with their goods and services.  This is why the world reserve currency is the US Dollar (Petro Dollar).   This fucker is getting stronger but it all artificial.  Precious Metals are booming and will go up even higher because the demand of them in electronics is going to sky rocket the value.  Stocks that pay Monthly to quarterly dividends is also a good option for income and then you use that income to park it to another interest bearing account (noted above in crypto section).  This is what I personally do as well as have a stash of gold and silver.  Watch the economy tank even more, and the markets crash harder than a fat kid falling down the staircase.  It's going to happen and then your parked cash can buy up low and HOLD forever.  You do not lose unless you sell.  

 

Real Estate -  We all know prices are sky fucking high.  They are coming down but buyers are weary because of the fed interest rate hike which I predict will go into 2023.  Houses will be lower during Jan- Apr value wise and there are good options out there but that interest rate is going to fuck you for a while.  Just find a property that you can buy and invest -  2nd home, rental incomes, etc.  

 

Remember it is all about strategies and how well you design the structures of your wealth.  It's bad policies that cause these conditions.  

 

Edited September 17, 2022 by FunStick

[Tron]

[Tron]

This 6 min video does a good job of explaining why the US Dollar is acting as a wrecking ball across the world, and is ultimately likely to lead to a sovereign debt crisis globally. 
 

 

[Tron]

The market is now pricing in 200 bps of rate increases between now and the end of the year. 

[Tron]

Live image of the US Treasury market today

 

 

Edited September 22, 2022 by Tron

[Tron]

Major dislocations in bond markets around the world. UK announced largest tax cut since 1972…results in bond market crash. Probability of a major equity market crash increasing by the minute. Good luck…winter is coming.

[Tron]

What falls faster, a pound of feathers or a pound of sterling?

[Tron]

DANGER WILL ROBINSON:

CTA flow balances are *enormously* skewed to the downside here. If we arrive at 3:30 with the S&P down 2-3%, the selling in the last 20mins is going to be very serious. And if that forces us down -4-5% on the day, we are going to CRASH on Monday.

[Tron]

This will not be “temporary”. Now we get to watch countries debase their currency to buy energy and government debt. Got bitcoin? 

 

Be careful trading stocks when major developed market bonds are trading like this. There is NOTHING more dangerous, than academics who have NEVER taken a professional risk, never actually sat in a risk-taking seat - but now sitting on trillions of pounds and dollars of risk.

 

Edited September 28, 2022 by Tron