Anyone think Trump is going to keep pumping the market?
- Thread starter RGLD
- Start date
It's not interest rates that worries me. It's more of the sudden switch. He was aggressive on rising rates last year even when the market was going to hell. Suddenly he wants to do a 180 added with a QE4 after Trump threatened to fire him (he can't). During the time of 3 months they've probably had a few meetings and somebody got turned into the other's b***h. And it ain't Trump.
%% Sounds about right; even though if you put a white paper next to tax hiker-Biden's skin NOT so white, right?? Pre-election years tend to be super strong. But with SPY,QQQ under 50 dma; may have to wait til 4th quarter to see some superstrong uptrend NOT a prediction..............................
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I'd hate to see the alternative to him. He's not great but if you listen to the way the democrats are talking, he's the only guy i'd want to be in there.
That ship sailed decades ago. It's been at least 30 years since Fed made meaningful efforts to put the brakes on a boom... as opposed to slashing rates instantly at the first sign of weakness and grasping any excuse to keep them lower for longer.
That said, at least CPI inflation is low, asset prices have levelled out, and there isn't an obvious threat to financial stability. Most you can say is that some VCs and retail investor bagholders are going to get vaporized when the unicorns crash to earth.
Does this include shadow banking? I don't even know how big the US shadow is. I just know China is in the trillions. VC's lending money for ventures, is this a part of shadow banking? Anyone know?
Some unicorns have issued bonds, but I haven't seen anything to suggest that VC investments involve significant leverage, much less hidden leverage. Rich people and institutions put cash in VC funds, the cash goes to companies in exchange for equity, the companies spend it on IT services, salaries, office rents, and implicit subsidies to build market share (think Uber/Lyft $5 coupons).
To the extent that many unicorns are structurally unprofitable, a cycle turn means a run-of-the-mill recession with rising office vacancy, rising unemployment, and temporary gluts in e.g. the data-center and cloud services markets - along with losses to the VC and IPO investors. But none of that is the end of the world.
Pension Funds will get a serious hit... Silicon Valley, where Pension Funds go to die! VC/PE mostly financed by dumb money, which is Pensions... To there defence, rates being so low, they can't hold IG anymore they need 7 % a year, they chase High Yields and Unicorns... US Shale will obliterate Pensions when Credit crisis starts, they will never repay debt, best case 70-80 Barrel is break even, 250 Billion + of debt, forgettttt about it!
Shadow Banking crisis will stem from degenerate lending in Junk, Housing subprime ( smaller scale this time tho ), and deep subprime commercial real estate... Amount of low grade corporate debt is insane, a lot of hits will be taken, not just in US, but worldwide in this one. Central Bankers won't blame themselves of course for ZIRP, they will blame " reckless lending ". Ponzi scheme will go on, this time Central Banks will directly buy Government debt, at a faster pace... ECB already owns 40-45 % of European debt, they will be at 60 % in no time, no bids at those rates so they are stuck with it in Japan/Europe. Fiat money is a comedy now, trillions are created instantly, yet a lot of poverty ?
The matrix starts when Central Banks cancel government debt, in theory it works, but in practice it's such a mockery of the Fiat system, what happens then ? We are 5-10 years away from Japan/Europe Central Bank cancelling government debt, interesting to see what happens then
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NOT to worry , badest of the US bunch, state of ILL; is borrowing/bonds 200 million or billion, cant remember which LOL. Putting that in pension plan; they cant run a pension plan budget so borrow more. LOL
, You speak the junk Corporate bond market is overblown, Is there a report that shows this?
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