Comments by "" (@jmitterii2) on "PensionCraft"
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I keep warning people when I hear them say just dollar cost average into the stocks, it'll come back at some point always does.
I show them Japan's NIKKE.
Oh, that can't happen here.
Over the last decade I show them the CAC and FTSE and some other exchanges.
Oh, that can't happen here.
I explain Japan is a decade and a half ahead of us in all aspects of what we've already done:
1) Deregulation of banking sector (removal of Glass Steagal, allowing easy company stock buy backs).
2) Retail trading frenzy 1.0 in the 90's and 2.0 now, etc.
3) Near 0% to 0% interest rates.
4) Borrowing frenzy fueling asset prices covering up lousy real wage increases if any even in nominal terms.
Japan.
They're the looking class into our immediate future. Particularly what it looks like in stocks and real-estate.
Yet we have hardly the social safety net that Japan has:
1) we lack universal healthcare
2) we lack labor rules that ensure solidarity in employment wages and benefits.
3) We lack a housing authority and planning system that hasn't even coped with the last real-estate bubble in prices resulting in even more shortages of housing and even higher housing prices that were already un-affordable then and even more so now, and this time rents are well beyond affordable; many retirees and working people living in tents and RVs already; this only gets worse.
4) political instability fueled by political propaganda derision cultivating a lunatic fringe that has adopted beliefs that are completely factually wrong have become mainstream accepted as if fact.
Essentially, you have potential for worse than a lost generation.
You have collapsed super power similar to the scale of USSR, Russia in specific, even similar to dissolution of Yugoslavia.
Either economic collapse or complete governmental collapses neither is good for us Americans.
We're very much fucked in the pants unless we adapt some social policies, regulate the financial system, prop up our labor and industries, and hold to account would be robber barons trying to pull a fast one... the feigning argument that we can't regulate because the rich will always find a way out of such regulation is bogus... so we capitulate and aqueous? Do we do this for people who murder, rape, steal, endanger, kidnap, etc.?
Anyway we have some serious inflection points, our nation either changes to address them, or it looks bleak for us all.
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Yeah, the positioning needs to be worked on.
A) they need to admit they went a bit over board (necessary perhaps due to the pandemic, a world wide emergency) on debt binge go burr.
B) What did this cause: massive inflation as well as massive speculative bubbles that were already a decade old thing from 2008 with QE even in the EU and and UK holding rates low for a very long time prior to the pandemic something they need to admit was a double mistake but many of these people in charge; applauded this reinflation of the assets that were already well beyond affordability and pumped up via leverage.
C) How do we fix this? We must raise the rates of borrowing, that is how money is added to supply. As well as discontinue the QE nonsense that pushes assets above affordability so that bankers can lend out without as much risk to themselves to anyone with a pulse or a "use case" < I'm looking at crypto and the bozo the clown cherry on top NFT's. Not that either aren't bozo the clowns, both are speculative idiocies with no underlying value other than the greater moron thing.
D) This should correct for affordability in all things including housing prices, rents, goods, and services.
E) This often does cause unemployment to elevate.
F) Only thing to mitigate the harmful effects of E, is to have your legislature local and national propose supply "of last resort" or rather extended resort to keep developers building homes... the supply of housing in many places never kept pace with the population thus demand despite the levered balloon bubble of everything speculative idiocy... in fact it could have kept supply lower as it catered not to affordable homes and apartments, but put lots of levered newly created money into more expensive luxury homes and apartments.... not the supply we need. As well as cheapen the few builders attempting to cater to the fewer and fewer people able to or willing to buy the then "affordable" non-luxury homes. So remaining middle/lower class housing developers just pooped out turds... and small quantities at that since fewer middle and lower classes could afford the rents or mortgages or homes outright.
Housing in most cases has always required a central planning element to ensure healthy affordable and liveable conditions and the supply of them were met, or rather slightly exceeds demand. You want always more quantity supplied than quantity demanded for various reasons; population is not shrinking for one, the other is that older units are always being demolished or in need of rebuild; like a car that gets depreciates over time from use, so do buildings.
So look to your governance. Markets are only as good as what the people of the nation desire to have. Look to places like Vienna Austria. And many other places with very good yet also very affordable and even abundant housing. Look at different time periods when this occurred.
Or wallow in this bankster gangster economy as that shit of a Chief Economist shat out of his poor excuse of a mouth; more of an anus hole really.
But that's the big problem we do have. These oligarchs have become brazen. Contempt for the worker, contempt for the vast majority of the population. The top 10% and rather the top 1% live in different realities than our own. They're far disconnected from what is real. Similar to nobility of not that long ago along with royalty and other oligarchs that continued to exist in many places around the world that eventually can no longer functionally do anything for the country to prosper as a whole, rather they seek to parasite off what is dwindling. And announce that as prosperity.
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Yeah, this entire run up was large institutions rebuying after taking a 30 day wash trade sell in December... buying back in January.
This persistent buying pressure was an obvious trade long as these funds required by their prospectus to get back into the funds they're supposed to be in, so many call options along with traders both retail and larger retail and hedge funds front ran buying; causing lots of buying, retail now buying lots of options forced market makers to start covering portions of their call writes, causing gamma squeezes of market makers to cover their mostly naked call writes; gamma squeeze.
Problem becomes nobody really is exercising these options typically. And market makers finally buy too many stocks; and if the call option frenzy buying ends and/or stock buying pressure ends (market makers no longer have to freak out and buy more stocks to cover naked call writes) becomes an unwinding of all that "delta" hedge of market makers, and just normal sell off longs taking profits, hedge funds taking profits, stop losses or trailing stops longs getting triggered, suddenly those same options market makers have to dump their now massive holdings of stock, especially as prices fall, regardless of call options volume.
And you get a big dump after the gamma squeeze.
Same can happen in the reverse, when lots of selling happens including short selling and lots of put options are purchased, same market makers require to raise cash so they are capable of buying the underlying stock if those puts they wrote get into the money... so they dump stock holdings they have to raise cash as their puts they sold get into the money.
And down we go.
Either gamma or reverse gamma squeezes typically last only a week or two... sometimes a month. Unless it's a crazy meme stock that continues to have lots of stampedes by both margin and regular traders or the new retail traders that keep buying several shares a day with some delusion of "getting them shorts to squeeze" really they're contributing to short burst gamma squeezes.
Anyway, these things happen with a big strong run up. Then they dump just as quick if not faster.
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@prateeksharma1703 We saw 40 years of easing of interest rates across the world. Leveraged money is how money supply in the current global banking system works... and when it does dump... it'll be like Japan 1989.... just for the entire world. All nations are now indebted into a debt trap...
Money supply was growing parabolic, it will suffer a decline parabolic the same as money supply in a debt base monetary system decreases by: fewer lending and/borrowing, paying back borrowed loans, or the big one defaults. In a debt trap economic structure the default rates become a shock to the system and the entire financial domino of Peter to pay Paul ends the music.
There are few nations left that aren't saddled by the debt trap. Turkey, now China are among the last.
Brazil and Argentina, most European nations, US and Canada and even Australia already in that boat.
There are few nations remaining as borrowers of last resort... all that can be done is to encourage lending, but borrowers may not show up to the table; and at some point, you can't encourage lenders to lend either. No matter how much "QE" you're doing. And that becomes a problem as inflation will eventually happen as you're just at that point transitioning from a debt base monetary system to just a money printer go burr economy and that ends abruptly too with worthless currency... a stagflation effect.
Essentially, the last 40 years was similar game played after WWII and after WWI, and something that happened all through the 1800's, have the century of the 1800's in the US was in a recession, great depression, long depression, or panic. And we had private fake money scams or wild cat banking... similar to the goof ball crypto nonsense. This time it's mired int a massive fraud concerning so called stable coins.
Euphoria gone insane.
Each and every time this ended in civil war, war, riots and rebellion, a complete break down in society, rises of dictators and other gangsters and crazies.
They did a great job, they being the plutocrats that repealed various banking rules like Glass Steagall Act, in recreating in short order the next robber baron phase... that always ends in misery for many. Rules finally come back on line. This time... we ought learn from this stupidity. Aristocracy cannot be trusted... an aristocracy is pathetic, mostly parasitical. A new system more democratic in enterprise not just in government should commence, or in 100 years we'll be facing the same untenable nonsense. Businesses should become more co-op like in nature whereby all parties workers and customers have a say as to all aspects to the operation of the business.
Just as most governments became better providing democracy to self rule, the same is said to that of individual enterprises.
You would not see many of the parasitical self destructive behaviors we observe time and time again with autocratic dictatorship enterprises where very few make out like bandits at the exploitation of the customers and workers.
1) Stock buy backs that add no value to anybody but provide a short term sugar rush in prices so that executives can cash out their stock options or bonus stocks while bankrupting the enterprise won't happen.
2) Sending production overseas to skirt environmental laws and seeking tyrannized essentially slave/serf labor won't happen.
3) Additionally, those enterprises remaining domestically won't attempt to save a few pennies via unnecessary polluting their own area.
4) The compensation won't just flow to a few at the top, rather a better mechanism that would allow technological advances in productivity gains would go largely to the workers first and foremost.
5) You would actually have better quality and efficiencies develop with better incentive workers as they are now co-owners of the operation and can make critical decisions with better understanding of how the operations works and what changes are necessary to provide better quality, efficiency, and quantities produced as apposed to the current few who are usually disconnected from reality of the world, and worse, by the operation of the detailed operations itself. Not to mention many of the higher ups in most businesses today are products of aristocracy who are to be blunt in their own world of make believe, often foolish ineffectual in all they do if they do anything at all... and when they do, do something, they generally do what's good for number one at the expense for everyone else... many times over though they don't even make competent decisions that would be good for number one, themselves, either of the long term. Similar disconnected stupidity that arose from the inbred nobility of old in feudal and mercantile areas of Asia and Europe of old.
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Means don't buy the top. Or you'll be upside down. Rally is just another bear market rally that will dip again... either making higher lows, or equal lows, or even another leg down lower lows. Basically, if you're dollar cost averaging into the market on a weekly or daily or monthly basis... right now is probably a bad time to buy anything. You'll be fomoing in at the top. Like a moron.
Allow the market to show us more. And dip. Even if this is a start of something better... it's bad risk to reward... this likely bear market rally or just rally was just mostly up and away. It should digest and pull back either way.
And conditions don't intigate this is any rally to buy. But to sell what you did buy on the dip perhaps... at least don't buy more now.
This rally was a combination of shorts covering, as well as new shorts having bad opening locations having to cover in a panic; which is always a transitory as those buyers leave quickly and are done buying.
But also reallocation from all the tax harvest sell offs of the losers from 2022 thru December... was a dip largely in December as lots of big funds and smaller holders sold losers to lock in losses for tax write off purposes.
That leaves lots of cash to go back into the market into January. Lots of it apparently went right back in to shite... that it had oozed out of originally.
While meme stocks still have some memeing they too forced some shorts to cover... lots of meme stocks are literally penny stocks now... so shorts really have no business remaining short on those names; and many of them in the pennies have bounces into the single digit dollars... as retail and some contarion large funds came knocking... more short covering than in 2021. So there's why the vomit stocks, or stocks worse than shite... like the meme stocks started to meme up again.
The other garbage stocks, just large funds going back into riskier junk as per their prospectus after tax loss harvesting; wash trading requires to sell the underlying similar thing and not touch it buy/short sell again the same for at least 30 days in order to claim the loss on deductions for taxes.
Lots buying back in all at once, short covering more than in 2021, will produce a rally of sorts. And that's what January was all about to present.
Likely just a bear market rally that will go back down... probably faster than it went up.
Banks are puckering. Fed Reserve no longer buying their loans the banks issued, so banks have to sit on whatever loans they made and hope the borrower repays. Defaults are fairly low still, but ticking up, and so are delinquencies. And lots of individuals and other companies have variable rate loans. So as interest rates go up, the ability for these folks to repay become more difficult.
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At this point its cheaper to build a house as lumber and other prices of fixtures have come way down.
While existing homes are still pretending commodities of lumber haven't cratered.
The dirt on real-estate in many areas have also dropped... undeveloped lots and other land without any structures, particularly no utility hook ups, which generally so long as a street that runs near with utilities isn't that expensive to hook up. Water about $3K, sewer about $3K, power $1K. If it's down another road these costs can vary. And if no sewer available, septic system for about $5K to $10K. These lots are fairly affordable, not cheap as they "should" be in some areas, but some come with sweetners if utilities are nearby they'll throw that in to the sale to either discount the ask or even install before the sell.
Land prices are still higher than usual.
But land prices are coming down as developers have cut back, getting backlogged on the housing they've started and haven't started quite yet.
Developers have been very cautious in buying up undeveloped land for the last decade being burnt buying land at a premium leading up to 2008 crash.
And seeing land prices spike again around 2015 to 2019 then the blow off pandemic top starting 2020 to 2021.
What I've noticed when it's cheaper to build a new house from scratch, typically marks a period that leads into a general housing slump in prices; and the only big crash we saw in 2008 in housing. As supply is typically expanded as existing homes start to fall to equilibrium with the cheapness of new home building.
I also suspect many who bozo the clowned into borrowing to the extreme during 2020 to 2021, heavily upside down, and paying, despite possibly locking in historic interest rates, still have huge payments they're unlikely able to continue. Even without a major job loss. Add any major job loss, or required to relocate, a common thing in the US; might see short sells, walk aways with bankruptcies.
Here in the Boise area some weird stuff as usual concerning real-estate, people mortgage into a home, but leave only a week later. For sale sign back up. It would be odd that financing fell through because the steps are very painful with closing and everything else. But some new laws exist that allow the purchaser a time to reflect and escape a badly chosen mortgage; similar to automobile purchase, a buyers remorse law that allows a person to return the vehicle for a full refund. It's to protect borrowers from being pushed into getting a raw deal and something they really couldn't afford.
Either way, it's odd that people would move in, introduce themselves, and before the end of the week, they're already moved out. And not just happening once, but already 3 times in my local area.
Couple things I suspect is happening is that the ability of work at home is being dropped by most employers, and those who persiste are just being let go. But could be, they realize their books don't balance. And it's impossible to refinance in the future while being so far in the red on equity to all the mortgages taken.
Over 70% were mortgaged financed, despite many cash buyers during 2020 to 2021.
That over 70% financing often came with bad financing, banks realizing the bubble ask prices, limiting the home price loan 80% requiring yet again the same bad practice of people taking out an ARM (and this time multiple ARM) loans representing a downpayment. Good luck for these individuals with the expectation to refinance, as they're already upside down in most areas around the country, particularly the most pandemic blow off top regions.
The irony is the bond market is trading like we're about to have a recession that dwarfs the 1929 great depression.
Yet as Ramin shows, at least in Canada, bullish sentiment on a chart.
Very contradictory stuff going on here in all markets... equities while breadth is very bad, the over all indices are up... albeit due to 3 to 4 stocks being elevated: AAPL, MSFT, GOOGL, META, and NVDA.
Personal opinion, we're looking at another 2008 catastrophe in the making.
This time, we can't allow QE to "rescue" us, as it has proven ineffective. And only causing inflation. Screwing everyone.
We'll need to just nationalize the failed banks, and mark to market all loans to allow price resetting from this hyper inflated asset bubble triggered by the banks bad leveraging to the tits on everything monetizing their bad debts debacle.
And prohibiting and such CDO markets from existing withing deposit banking ever again. Deposit bank writes a loan, it's theirs until it is repaid. They'll be less flippend on approving and appraising higher valuations of homes or cars or other collateral loans they grant.
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I'm starting to think that average 4% to 6% interest rates mean is a decent healthy rate to lend at. Too far below causes massive inflation and/or speculative bubbles. That then requires that 4-6% mean to be elevated to suck up all that extra money in the system that causes inflation to go away. That then causes a oscillation that then tricks the fools to "stimulate" the economy to lower rates below that mean. Only to cause inflation and speculative stupidity to come back causing yet another bubble and another requirement to jump rates above the mean.
I think a steady 4% to 6% rates is the best rate for smooth and healthy lending.
If you want to stimulate the economy, that should come from legislation democratically elected on what is valued: we value health therefore that produces healthy people able to stay productive, great you get the envy of the world, and benefits that us Americans can't even believe exists, the NHS. Or you value oligarchs pretending their scams are real, and they'll trickle all over everyone one else, not with urine, but money like some pinata, you get our sorry excuse for a eugenics program for elderly care with no rooms available for elderly care, regional hospitals going bust both private and the very few state or county hospitals closing up, and prices that are as ridiculous as a meme stock or the tulip mania of crypto going to the moon, and medical insurance that's not really even insurance in any international standard terms; rather insurance that's not really insurance, but some phony scammy pretend discount buy in program with the hustle, you pay huge amount to buy into the program, but the discount doesn't even come close to ever repaying that buy in premium... medical insurance deductibles... even Germans say WTF on that scam.
But back to stimulating the economy. If you want to stimulate the economy, you put the house priority and values in order. Value health of the mass of people to be productive... you put money into things like hospitals, clinics, elderly care facilities, and medical R&D like UK, Germany, France, Japan, Australia, and even Canada is doing.
You value oligarchs and despite labor and want labor to be cheap to stimulate the economy on the backs of labor as we do in many other countries including the USA... you make it hard for self employment by ensuring the low income self employed person's risk is higher cost burden, provide a scam aka so called medical insurance, and hope that the Catholic church and other non profit organizations keep building money losing hospitals and clinics so we have some facilities available for the mass of people, and encourage people to take lower wage jobs just to have the false assurance of the scam of employer medical insurance, even though most medical bankruptcies in the USA are people who have employer sponsored insurance or medicare/medicaid or both. At least we have medicaid and medicare I suppose. Even they're for severely handicapped and/or terminally ill, or elderly; and is insufficient.
Other priorities can be to grow infrastructure like power grids, power plants hydro thermal or other power station types, rail, roads, and sea/air ports. etc.
Provide sale subsidies for units sold or cost produced for certain goods that have precarious foreign sourcing.... the chips deal was just done in the USA not because there was a long term shortage of semi conductors, but because much of the semi conductor supply comes from Taiwan, and the concern has been China invasion of Taiwan. And the rich can't be burdened by a chip shortage should that happen; they need their luxury tech palaces to be full operational. And of course this would put a burden on all types of manufacturing as everything uses some sort of semi conductor from the lowly resisters and capacitors to smally integrated chips and CPU's.
And there is always good or bad ways to stimulate the economy.
But doing it via monetary policy, the past several hundred years, we can observe, it doesn't work. It just causes boom bust cycles, and the vast majority of people aren't better off.
When programs like compulsory education, universal healthcare, land grants, homestead acts, farm/food subsidies, great transportation and utility construction from water works including water distribution and provisions and sewage, etc. and R&D on various engineering projects and concepts... we get big technological advances that DO increase prosperity across all spectra of society.
Monetary jiggering... should be relegated to keeping both deflation and inflation flat. Keeping prices as stable as possible. Nothing more.
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I thought he was making a huge mistake buying those ADR's (not really stocks) from China.
Very dumb. But even someone like him can make bad bets. It's knowing when to take a stop loss and get the heck out of dodge when your bet turns sour. Otherwise you hold massive bags... and you might learn from ding bats trading fake money for real money aka the crypto scam... those folks lucked out completely as they were caught up in a scam pump and dump and were holding early... unfortunately it trained them to be morons and many did not sell for real money and never locked in those profits as crypto falls apart...
Taking a stop loss ensures your bet doesn't turn into eventuality of forced selling (I need the money because I have huge bills and/or I lost my job and have no other income... or even worse... the value of the holding is literally untrade-able... it's bust chapter 7 liquidation goodbye... it's worthless).
And so many not understanding swing or day trading... the only reason a few actually do okay or even make money on it routinely is due to lots of study of charts... and risk management.... $2 dollars in wins for every $1 in losses.
10 trades... such ratio of 50% wins to 50% losses on those trades... you get get 5 wins for $2 each or $10 bucks... and the other 5 trades losing only $1 is $5 bucks lost... net gain of $5 profit.
And that's with a 50/50 win loss ratio. You're still making a profit.
BUT that means you take your lumps immediately limiting your loss to only $1 for potential gain of $2... AND it also means you have to know a trade potential that will provide a $2 gain for every $1 you're risking. Some take the losses, but haven't studied enough to know the target profit area to ensure they get $2 gain for every potential $1 loss. As soon as it's green... $1 up for their $1 risk... they cash out immediately. Or the really risky moron who goes past the $2 gain... and allow it to run to $3 or $5... hodling... never cashing out... and it suddenly reverses quickly to a loss or only less than the $2 gain they should have locked in.
Basically, trading takes time... it's a job. Lots of research and understanding how to read fundamentals of the underlying, market internals, macro economics, micro economics, and technical indications.
China in particularly has some bad things happening... they have the mother of all debt trap... essentially all their developers are bankrupt. China, Brazil, and Turkey were loading up on the debt binge while all other nations' had their debt problems in 2008. Now it's them and the rest of the world that never really got out of the debt trap.
There is no other nation to take that slack of being borrower of last resort like China, Turkey, and Brazil did.
It's sort of a game over period on that front.
More over, the idiocy of the world's monetary system, the US Fed Reserve, as unleashed so much debt lending to actually cause stagflation, that is inflation despite the prospects of recession/depression of lowering demand... that the only thing known to end such inflation is to raise interest rates and end easy debt binge policies to stop demand from going out of wack... so that supply can catch up to demand and grow higher than demand to cool rate of prices or even reduce the rate of prices ie. end inflation.
So China would be like investing in Brazil in 2015... very dumb. Or investing in Turkey just recently last few years... and be a massive bag holder of probably mostly worthless stuff in the long run... and nearly worthless stuff already.
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All those bonds you spoke about sound confusing as all get out.
USA the Inflation Series Savings bonds is easy.... you buy them directly from the US Treasury website. Lock up is 1 year, after which you can redeem them. They're not trade-able.
Accrue interest every quarter and compound interest semi-annually.
If you redeem before 5 years of purchase calendar, you give up the last 3 months of interest accrued as a penalty.
After 5 years, you get full interest, no give up of last 3 months of interest accrued.
And they quit paying out after 30 years.
Also they're state income tax exempt. Only taxable Federal income tax. Which is nice for me, as my state Idaho has a little over 6.3% income tax.
And you can redeem them piecemeal.
You can buy an actual printed savings bonds, but the calendar year limit becomes much lower. I think printed savings bonds becomes $5K instead of $10K for electronic purchased.
And it's sort of pointless to have the paper printed I-Series Bond because they're not transferable. You can sell them. They're attached to the original buyer of the bond, and redeemed upon demand (after a year lock up from purchase date) for principle and interest owed... minus the last quarter interest if redeemed before 5 years of purchase date.
And you can buy thru the year toward the $10K limit... so whatever amount $25 increments or higher every week, month, or random purchases until calendar year reach of $10K.
Redeeming comes from the website as if you're logging on to any broker website, in this case treasury direct website... and select the bonds you bought and how much of it you'd like to redeem. Redemptions can be piecemeal too... only need to pull out $500 or $2K or whatever... then that's okay. Even if you bought in different times and allotments. Interest will calculate based on first in first out basis.
And it's similar in that you don't know what rate you'll get every May and November as it's based on CPI data.
The fixed portion pays the going interest rate at the time, and stays fixed for the life of the bond 30 years. Fixed portion never changes... so some lucky folks who bought some of these things and held them back in 1990's or early 2000's had a big combined rate... about 1% to 2% fixed and when it was 9.68% inflation rate portion were making 10% to 11% returns for 6 months.
The ones I bought in 2022 fixed rate was 0%. So they suck for long term holdings if and when inflation goes down.
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@thejoshman3843 No he hasn't. At least not yet... tariffs put in place by Trump have remained even now of the is commenty 7/31/22.
What you're seeing is companies that had a mad rush to highs in fomo stupidity and leverage cheap as O2 go to the moon, those exposed to more international revenue sources get hammered. Those selling to domestic markets don't. And to be frank, all markets other than the US have a worse domestic market picture;:
China: insolvent developers and debt burden and loss of individual/family savings/investment.
Japan: Malaise persisting.
S Korea: Massive debt trap by both companies and individuals.
EU zone nations: malaise in an energy shortage and monetary policy inflationary stupidity with their own debt problems more located in their businesses than among individuals in most of the EU nations.
UK: drab miserable island that has prior to the Brexit stuff, sold of much of its industrial capacity. Instead shifting to financial sector... selling hopes and farts in a jar and any other silly hustle that might float the boat, until it doesn't.
BRICs nations as a whole have long since had a diminishing economy where long term low interest rates stimulus failed completely and only caused a debt collapse.
Australia: Heavily dependent on China for vast majority of its exports of commodities... so if China doesn't stimulate or can't or even becomes insolvent over time on foreign reserves (which could be the case) or in their desperate gasp to maintain some sort of self imagined dominance, China invades Taiwan.... We lost the borrower of last resort that the world had in 2008... and Australia would suffer the greatest.
Globalization, colonialism, imperialism etc. nothing new. Really, it's the same stupidity over and over since recorded history, one very ancient period was the late bronze age collapse... trade becomes twisted into a pretzel all on the crux of exploiting various regions labor ( outright slave labor in this period of time and many other periods of time)... it's held together with debasement of money and acid of resentment of the vast majority of people (or in this case human chattel) in our case sweat shop workers... you get a complete resentment of the system. One by one, the most vulnerable nations start to go on war campaigns to distract or acquire more resources in hopes of propping up their own regimes popularity or at least diminish the resentment from mass of people.
But you just end up showing the vulnerability of supply chains that get stretched beyond authentic comparative advantage, and are only there due to inauthentic comparative advantage (forced labor, national subsidies to the moon, exploited labor yet cannot actual provide the goods at any reasonable quality level, etc.).
War and civil war busts the entire thing up into one big collapse.
This cycle repeats so often throughout recorded history, it's amazing humans are that insane to keep repeating it over and over and over again.
1929 was the last time similar stupidity had its complete shit the fan moment.
The irony the buzz your nether region word used to describe the "this time is different" idiocy, is the same buzz your nether region word globalization... word firstly introduced in 1870's, but used all thru the 1920's.
This time we didn't even get a new fancy word to con us into insanity of repeating the same thing over and over and over and over again.
We got a hand me down word.
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No. Because the oligarchs no the peasantry are shit out of "disposable" income, that in fact they're addicts on debt just to get basics, screw ability to save. Worse in the US, but UK and Europe not far behind. Korea already insane on this camp. And Japan... well they've given up long ago. China... they lose it in lots of swindle stupidity: their equity bubble 2015 and now the ghost city real-estate decades long insolvency mess.
So the only way to for the oligarch to syphon all incomes from the peasantry that have a smaller and smaller pot to piss in, is to monetize bad debt from banks, pump the chicken on all assets, particularly inelastic basic need things like housing and utilities with frills catering to a few morons who think they're rich, but really are playing debt bing them selves to keep up with the oligarchs they think they've become... so things like TSLA or AAPL over priced junk and to the point of pure unadulterated con... vapor ware.
So make home prices high along with rents and that preserves a cash flow from the peasantry to thine pockets.
Easy to do when you've bought all media outlets and have propounded various idiot notions that favor you and completely screw the peasantry... similar to the churches of old did. A con that has tested challenges of time.
This way, with both hands the peasantry give up their citizenship of being the government and hand it squarely over to you and your few plutocrats.
USA it's fantastic. WE don't have a central bank, rather a private banking cartel that has anointments of the government via some Congressional: "Oh you private cartel can F us and F us hard... so long it's (us) is the peasantry, and we're getting a little in our pockets while the rabbits are doing their thing."
It's stupid on stupid to the perspective to us peasantry. To the oligarchy it's brilliant with one potential draw back... and that's the race to Sri Lanka. But that's where embracing one of their less hated demagogue that pretends to favor the needs of the masses yet with the BS BDSM methods that F the masses hard while ensuring a steady if not huge income stream into the fews' pockets.
Now, this could lead to complete collapse or some really bad gangster insanity where oligarchs literally start eating each other... and I'm not the civil way via making investment bets against one another or talking crap about one another... but literally hiring countries and private militaries and thugs to.... make each other go away.
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I think you missed the point of these same day expiration options with market makers.
At first it causes that gamma squeeze; the problem has become that these market makers are required (or the go bust) to hedge. They do now with aids of computers; as delta goes up on the number of call options bought, they have to buy more stock, and as the price actually gets close to being at the strike or into the strike price of that option; they have to buy even more shares for the potential of being assigned.
Here's where this gets to become an unstable phenomena... as gamma squeezes to the upside happen, market makers are buying lots of stock causing stock prices to go up in the short term; the holders of these options contracts vast majority are not exercising them, therefore market makers are stuck with the shares they bought thinking they would need them with all the now in the money call options they wrote, they'll have to sell those shares to the option holders who would be exercising their call options.
BUT that's the problem. These options buyers are flipping them, with no intention of exercising these options... many retail traders don't even have the funds even in margin accounts to exercise their 100 contracts on say AAPL or some other stock... since they all get sold off, and whoever ends up with the bag can't exercise most if any; the market makers who bought driving the stock price up at some point no longer need those shares to hedge.
Since these gamma squeezes have been going on all since January and into Feb; lots of these options market makers kept their shares anyway; making the spikes up not as violent; lesser dramatic gamma squeezes... this in turn causes a depressed purchasing in call options... buyers of these options are deciding, okay gains are not as good or not even good.
Suddenly normal price action returns, and the stock prices start dipping. Market makers are holding lots of stock now, need to dump all their holdings realizing the parties over, and down we go big time.
And this can be triggered by many market makers unsure what their hedged positions really consist of.. they're not really sure who is really going to be exercising and therefore dumping their stocks... market makers really don't want to not be assigned; the entire goal of their model is to sell premium and if they need; have the stock purchased at least below the strike price and if they have to deliver the shares, that's great, they sold made some money on that end, and primarily made money on the premium for selling the call option. But if they're stuck holding bags of stocks that are rapidly now decreasing at cost they bought them... that's bad news. Market makers don't want to be holding the bag. That's their job to make others hold the bag. LOL!
Anyway this can cause a stampede if the stock naturally falls, or if market makers just can't make money because they're writes aren't being assigned (option buyers aren't actually exercising).
So you get two scenarios:
1) Natural pricing action not lead by market makers covering (gamma squeezes); prices fall forcing market makers to dump their shares.
2) As potent; market makers not making profits in this environment deciding to delta down, stop writing options and just dumping their shares to halt their operations so they can discern a better strategy that ensures profitable market making. So they dump all their shares that were hedging the call writes, and not selling anymore.
Both scenarios can lead to one another. And both make a down turn in the markets bigger.
And with all the gamma squeezes lately, market makers are sitting on huge piles of stocks. So a sell of with them would in turn become a big dump.
This could get more extreme if option buyers start purchasing puts. Causing a reverse gamma squeezes on the way down, so those few option market makers still trying to market make; still writing options start selling puts and need to cover their puts with cash, they too have to sell.
So this makes markets not stable at all. It becomes big rip up followed by big rip downs. And just small pressure one way or the other can trigger these drastic moves up or down.
I think the Volmageddon is that these market makers eventually give up, not able to cope with proper hedging and are losing money. So they just delta down, dump all holdings don't offer any options at all to reset their strategy. This would mean lots of dumping of stock. And that's what the one article that came out described might happen; market makers are sitting on huge piles of stocks right now; therefore at this time the risk is to the downside. Would be opposite if we were having reverse gamma squeezes due to this options activity with too many puts being purchased over and over and stock prices were spiking lower and lower over the past few months.
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Well, globalism, colonialism, mercantilism/feudalism, imperialism whatever you want to call it was never a good thing in history and always ends in civil war, war, and just pure misery for most.
And even the oligarchs who parasitical feast on the flesh of this exploitation setup eventually start eating themselves.
I mean this is just a faction of oligarchs warring with another faction now in Russian and Ukraine. The pressure on labor to be exploited more and more means aggregate demand declines... hence the 40 year lowering of interest rates to get the borrowing stupidity on full tilt to flood the system with artificial demand... because the intrinsic demand from workers producing was gone along ago and continues to decline in a race to the bottom for labor.
The trade trade itself is at that crux of inauthentic comparative advantage... they can force labor or pressure labor to work for next to nothing. Cheap labor.
Additionally, many nations will subsidize the raw material costs of inputs. Cheap labor and cheap inputs.
Additionally, many nations will forgo normalized social expenses such as pollution controls, infrastructure expenses, etc.
Cheap labor, subsidies taxes, subsidized inputs... you can then make a spaghetti of cost ineffective, and thermodynamic expensive trade networks that make utter nonsense, costing a fortune... only because of the temporary misery factors of the desperate and oppressed labor, the always crumbling infrastructure or lack thereof, and the credit/debt hole of subsidized taxes and adding insult to injury the subsidy of input purchases. A supply chain that is actually insanely expensive.
The cost of diminishing authentic demand in aggregate demand slump mixed with the increased cost of the trade as described has to be paid back.
There is no free lunch.
As always, this structure of economics eventually collapses.
This type of setup whatever buzz word you want to call it is self refuting and defeating, generally ends catastrophically.
First use was the late bronze age collapse. Very sudden (however doesn't need to be a sudden calamity, it can linger in a state of malaise) and apparently catastrophic.
It's always ends catastrophically... about 80% it's sudden and history shows 20% it can linger on for a century or four.
But we saw this with Classical Greece collapse, and the Roman Empire collapse... smaller regional examples goes to the Assyrian collapse.
And we can go through all through the AD/CE periods and see the same thing. Over and over and over again.
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First person to really hear from the financial sector screaming deregulation is a risk... here in the USA it's always the other way around... deregulate! LOL! Let markets go completely bat nuts crazy for short term bonus money and other quick profits, who cares that the LLC or publically traded company is limping into insolvency and bankruptcy... so long as we got in, did our little pump and dumped it all over the tax payers heads.
And that is exactly what happens with deregulation. One notable was the Financial Modernization Act of 1998... essentially repealing Glass-Steagall Act that kept deposit banking separate from investment banking firewall... and a decade later we got 2008, a super levered real-estate stupidity; pumping the price of dirt via leveraging and idiot CDO market; so banks didn't care about the quality of the loans, and loved that assets were going up largely due to other banks doing the same pumping those prices up; a way to lend even more out to sell to the CDO market... until that became illiquid nobody wanted to buy them as they were toxic resulting in the Fed's QE debasing currency and reinflating the same assets this time adding car loans into the equation; many new car loans are over $1K a month. And that's spooky even at $600 a month for a car payment here in the states. And now also rents and home payments are $1,200 to $1,600 while even nominal wages/salaries haven't really done anything... and again people taking out adjustable rate mortgages and arms to boot.
Big quagmire in the banking sector. Particularly with the Fed not being the primary collateralized Debt Obligation buyer; removing that from the banks' balance sheets so they can dump those loans for money and some of the interest for profits, to turn out more loans. Now they're stuck holding the bags. And hoping other banks are interested in buying their CDO's because the biggest and often only buyer, the Fed, isn't buying; there was a reason Powell decided instead of selling those CDO's on the Fed's balance sheet into the CDO market, they instead opted to just let them "mature" get repaid, and thus fall off the Fed balance sheet; not add more selling of CDO's that already were happening. Many with the same problem with treasuries... mortgages and auto loans at original principle amount well beyond what is likely to be the case thus underwater collateral, at very low rates... while new loans are now 6% or higher... so nobody will want the old stuff at low yields... while both being equally vulnerable to having negative collateral in the bubble origination amounts of car prices and home prices.
All we need to do is keep doing the same thing, and we'll all be insane. As per the definition of insanity... keep doing the same thing over and over and expecting different results... but the mantra in the states continues to be... deregulate, "get rid of red tape". Just means... screw tax payers, investors, depositors, and buyers of these assets like cars or homes, pump those prices get them upside down, and worse lend to those at highest risk of default doesn't matter... so long as we make that loan and dump it on the CDO market... we'll make money right away... and leave the bank and everyone else on the verge of insolvency. And more and more people unable to let alone buy a house, unable to afford rent, living in their car or RV at some camp ground that's filled to the brim already not taking reservations. And developers scarred from 2008, reluctant to buy the over priced land, and build units without a buyer that's attached right away... thus slow to build new housing units. Which over the past 2 years now.... sort of went out the window; a new multidweling housing boom has developed; much needed housing capacity. But all of it at inflated prices due to risky levered lending... that is unlikely to be sustainable by those footing the bill, the mortgage holder and renter; as again, wages have really gone nowhere while this inflationary bubble was pushed up via yet again a stampede of borrowing speculation.
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