Debt Rattle New Year’s Day 2019

 

Home Forums The Automatic Earth Forum Debt Rattle New Year’s Day 2019

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #44635

    Alfred Sisley Snow at Louveciennes 1878   • Looking Forward To Dow 11,000 (Bear’s Lair) • US Stocks Post Worst Year In A Decade, S&P Falls More T
    [See the full post at: Debt Rattle New Year’s Day 2019]

    #44636
    V. Arnold
    Participant

    Alfred Sisley Snow at Louveciennes 1878
    That’s quite a painting; wonderful snow scene.
    Much else to digest; that’s quite a post Ilargi; much content…

    #44637
    Dr. D
    Participant

    Dow 11,000 sounds about right. Much as I criticize the United States, it’s not like we don’t have an economy, still have massive manufacturing in high-value added goods like medical equipment, or aren’t amazing in R&D. We also still do a lot internally, although relative to the past it doesn’t look like it. It’s probably also a line you could see on the charts, which generally means something. Will we get there, though? Anyone’s guess. This system is converting, and they’re trying to convert it systematically, but history is not fond of such attempts. Also markets overshoot, which they call “animal spirits” but is really a logical response to debt conditions.

    It is never sensible to rebuy your stock with debt, only with profit. With debt you are trading a security that’s flexible – floating new stock when you can – for a debt that’s entirely inflexible, and is almost the only means to be bankrupted. Now you MUST make X profit per month, whereas in a debt-free stock system, you only have the overhead of your capital stock. But we all know why this is done: to give 6-figure payouts to corporate stock options and raid/gut the company at the stockholder’s expense, the Mitt Romney bankruptcy plan that took Toys-R-Us, and featured in epic movie “Wall Street”. That’s why buying your own stock to pay your own stock options is fraud and was illegal until like 1989 – really you’re just embezzling the company assets in a more creative way.

    And 20%? Gosh these people are henny-pennies. The Dow rose from 16,000 to 22,000 since 2016. That’s stellar – what do they want? No retracements ever? Of course, because they care about HFT and market rigging if it drops 100 points, but not if it rises 6,000. If they hadn’t levered their leverage, they wouldn’t be in the jam. Too bad. Reminds me of Coolidge in 1921, who said of Wall Street, ‘They got themselves into this, they can get themselves out.” In 9 months, and no pig-trough to suck on, they cleared it out and moved on. Hoover/FDR put out the feed and 9 years later were worse than ever. They had to nuke a country to end it. Nice.

    “Not much of the FTSE losses can be Brexit-related, it’s very much in line with everyone else.”

    That is actually extremely interesting. Does that mean the market doesn’t believe it? That Europe is worse, or the same?

    “Some investors are deeply concerned that the US economy could be slowing, even as the country’s central bank raises interest rates”

    I don’t understand this quote. They make it sound like ‘since raising interest rates is always great for the economy, why are investors so concerned?’ when everything in history says the opposite. Raising rates (under the modern debt system) almost always crashes it. Is this a way to say The Donald is misguided in criticizing the Fed? A strange way to go about the whole question/implication/slander, but these are strange days. Words have meanings. Their only job on earth is using them. Please at least try to use them accurately.

    The construction of the accounting Euro is identical to the proposed SDR, and no doubt will work equally well – killing everyone. Nevertheless, when that’s the whole point, they will try it. Also, oddly, the Euro is relatively stable, gyrating around 1.0 so what’s the problem? P.S. is Greek unemployment dropping because they died in cold apartments, or because all the viable young workers emigrated? Such is Junker’s “prosperity” and wild success. …If they’re trying to get thrown out of office via the nearest window they’re doing a good job of it.

    Macron certainly inspired national cohesion: everybody against Macron. He’s the only guy who could get communists and fascists to stop fighting each other because they hate him more.

    “ Russia’s $75 Trillion In Resources Is Why Sanctions Are Impossible (RT) “

    But somehow sanctions (low currency) brought down the Soviet Union in 1989? It’s not the resources, it’s the ability and the will, and they do have it, mostly.

    There are always outliers, but it’s hard to imagine trouble when federal employees are making 3x the rest of us, maybe 4-5x with benefits. What were you doing with our money? We’re living in cars, why not you too? And that is common in the U.S., even the “wealthy” (c. $100,000/yr) being more in debt than income, and having outsized expenses that are unnecessary. For why? Because cash pays negative inflation-adjusted, which is clearly why no one has money in the bank. If it made 8%, the money would be there, and you’d have “$400” for emergencies, plus interest. Thank the Bernank. It’s exactly what he said his plan was: financial repression over time, to soak the people to recapitalize the banks, and it’s worked, mostly: they’re rich, and two generations of Americans are poor, and dying by the 200,000’s. #Winning!

    #44638

    Dr. D,

    “Not much of the FTSE losses can be Brexit-related, it’s very much in line with everyone else.”

    That is actually extremely interesting. Does that mean the market doesn’t believe it? That Europe is worse, or the same?

    It is certainly interesting, Brexit doesn’t appear to be a factor at all. Or if it is, Britain’s economy would be the big shining king of the global hill without it. Doesn’t sound 100% right, does it?

    Some data from the articles: Dow, S&P down about 5-6% for the year, when in 2008 they lost 30-40%. Perspective. The FTSE 100 tumbled by 12.5% during 2018, The pan-European Stoxx 600 ended the year down 13%; The DAX down more than 18%. The Shanghai composite 24.6% lower; Shenzhen composite plummeting about 33.25%. Again, perspective.

    The UK numbers surprised me a bit, I must say. How much will the FTSE drop as March 29 draws closer, and/or the whole process fall apart? Keep a close watch (on this heart of mine).

    P.S. is Greek unemployment dropping because they died in cold apartments?

    Greek jobless numbers tumble for one reason only, same as it ever was, everywhere (US): a job is still counted as a job even if it pays a third of what it did before, or has a third of the hours, and none of the benefits. Any talk of recovery of the Greek economy violates basic mathematics. The only ‘positive’ thing is they sell everything not bolted down to the Chinese and Germans. It borders on sacrilege and insults our intelligence.

    “ Russia’s $75 Trillion In Resources Is Why Sanctions Are Impossible (RT) “

    But somehow sanctions (low currency) brought down the Soviet Union in 1989? It’s not the resources, it’s the ability and the will, and they do have it, mostly.

    Russia is 1000 times better organized today than it was 30 years go. That’s why sanctions hardly work. That’s why there’s Russiagate in the west, and the Skripals. But the west missed its opportunity with Yeltsin, and it ain’t coming back anytime soon. Great history question: why did Yeltsin appoint Putin as sort of his goodbye gift, after selling out the country to oligarchs and Americans?

    #44639
    Doc Robinson
    Participant

    “Some data from the articles: Dow, S&P down about 5-6% for the year, when in 2008 they lost 30-40%. Perspective. The FTSE 100 tumbled by 12.5% during 2018, The pan-European Stoxx 600 ended the year down 13%..”

    Looking at the Q4 drops shows a somewhat different picture, with the American stock markets (S&P500, Nasdaq) falling more than the European (FTSE, STOXX).

    “US Stocks Post Worst Year In A Decade, S&P Falls More Than 6% In 2018 (CNBC)”

    Of course the sidebar for that CNBC article shows a trending article titled,
    “Why 2019 could be very good for stocks, after the worst year in a decade”
    with this quote from an equities strategist at a big bank:
    “Based on fundamentals, I don’t think the pullback we had in this market was ever justified. Markets will do what they’ll do. I think you have significant upside here. Therefore, we would think that the bottom has been put in this market.”

    #44640
    Doc Robinson
    Participant

    Another perspective…

    The US stock markets (S&P 500, Nasdaq) fell further this past quarter than the FTSE 100 or the pan-European Stoxx 600 fell during the entire past year (or any year this past decade)..

Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.

Sorry, the comment form is closed at this time.