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Mr_clueless
Posts: 27
Incept: 2009-06-04

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For the record, I have been out of stocks since early 2008. (And I feel like a fool for it because I wanted to get back in when the S&P500 was at around 1000, but I didn't because of all the negativity in various blogs I was reading.)

However, of the many blogs that I follow (including this one), while they provide useful insight and news, only one has been accurate with its predictions both on the way down and on the way up--Calculated Risk. That blog says no risk of recession this year. It's a boring blog in terms of posts and forecasts because there is nothing sensational; he keeps saying the same over and over. Back in 2010 when people were calling for another recession/crash, he just kept saying "no recession". Right now, he still says no recession. He doesn't predict what is going to happen with stocks in the short term.

But all this talk of the end of bull market for bonds seems to say the economy will suffer. I don't think so. It would be great if it did given my current investments, but I just don't see that happening.

While corporations may be borrowing money, the good ones also have record amounts of cash. They have enough cash to get them through a cycle of interest rates going up, sending the over-leveraged businesses over the edge, and then recovering again.

Here are some posts worth reading.
http://www.calculatedriskblog.com/2017/1....
http://www.calculatedriskblog.com/2017/1....
Tickerguy
Posts: 151193
Incept: 2007-06-26
A True American Patriot!
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Quote:
But all this talk of the end of bull market for bonds seems to say the economy will suffer. I don't think so. It would be great if it did given my current investments, but I just don't see that happening.

No it doesn't.

It says the failure to additionally lever positions means valuation will inevitably contract. It says exactly ZERO about underlying economic activity.

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Winding it down.
Click
Posts: 76
Incept: 2017-06-26

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"So what happens to "valuations" across the board?"

It's called, "The Minsky Moment"... That's what happens. And it's a wonder that it didn't already happen during Obama's last term in office.

But there is still time for the average citizen to prepare for the **** storm ahead. Right now, what's going on is we have the modern-day equivalent of the Dutch Tulip Mania playing out in Bitcoin. We have The One And Only, Donald Trump, boosting confidence like Hoover did in 29'. We also have The One and Only reforming the Amerikan Empire something like Diocletian reformed The Roman Empire, so as to save it from total collapse. And we have a little more time before the bond bubble pops, so now is a good time to make ready for what Karl is warning about.

Nobody knows precisely when the moment of truth arrives and the sink deeply into the Swamp, but it's coming. I hope the bubble lasts as long as possible, because an execrable economy during a post-bubble collapse is a nightmare nobody should want. And the One and Only won't be able to stop it. In fact, he probably gets the blame and gets replaced by some Marxist Oprah.
Mrkarol
Posts: 25
Incept: 2015-12-15

Chicago
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Just my 2 cents...
1. If banks get screwed by significant inability to refinance, TPTB will paper over the losses. We've already seen that play out a few times.

2. A meaningful exodus out of the bond market (which would cause yields to rise), will create some losses, but not total losses. That cash will need to go elsewhere. Given that the the majority of fund managers (and certainly individuals) are underinvested in equities, I would expect that money to go into the equity market. Non-the-less, individuals don't matter. It's the large institutional funds that move the needle.

3. There have been periods of rising yield and rising stock prices (the 1980s).

I absolutely agree with your comments on leverage because they are mathematically correct. I also agree that with rising yields, stock buybacks will slow. However, there are other factors at play here that may be offsetting. I firmly believe that we were in a massive fear cycle since 2008/9. People have not been excited about equities in years. What happens when that trend reverses?

Franco
Posts: 61
Incept: 2009-10-06

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So does Mr Bill Gross have an explanation for calling the end of the bond bull market?
Tsherry
Posts: 1013
Incept: 2008-12-09

Spokane WA
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As someone who might be called a prepper, I'm at a loss as to how to prepare any more than I have, mostly because the systemic implosion will cascade into every aspect of life.

The only common outcome the I can crystal ball is global war.

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Omne mendacium est.
Clay3482
Posts: 450
Incept: 2008-11-13

Alaska
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Karl, let me ask a question, what about China and why would they be doing this? Talking about the news headline from Drudge saying they may stop buying Treasuries.

Is it not known that China has a huge bubble in property, metals, ghost cities etc.

If they stop buying, would we not slap tarrifs over night which would cripple their economy. Add in the fact that the 3 gorges dam flooding their most fertile farming land that they have to import food.

Are they stopping buying because they can't? Is China fixing to blow?

I know that interest rates here will blow us up, but we are the hooker with crabs, and everyone else is a hooker with Aids, Goneheria, Sifilus etc.

I am just trying to figure it out.
Analog
Posts: 1508
Incept: 2010-12-29

arkansas ozarks
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Mr Clueless wrote:
Quote:
For the record, I have been out of stocks since early 2008. (And I feel like a fool for it because I wanted to get back in when the S&P500 was at around 1000, but I didn't because of all the negativity in various blogs I was reading.)


I'm in the exact same boat. Been scared for years now to get back in at record high.. Hindsight is 20/20, eh ?

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Never trust a computer with anything important.
Mangymutt
Posts: 483
Incept: 2015-05-03

Vancouver WA
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Tsherry - I am in the same boat as you and many others here. I have pulled back a lot on my commerce, am fortunate enuff not to owe any debt (Outside monthly bills) and stocked up on certain supplies.

I am hoping that when things get to the point the unraveling is noticeable, it will begin slow enuff that we will be able to ascertain what direction each of us should go in, given our own situation.

You are in some good farming land, far from any big city. Yes Spokane is very large for that area, but it is nothing compared to Seattle or Portland. So it would make sense that shovels, plows and a still and a good pair of work boots would be beneficial over there. In Portland or Seattle, getting the hell out would be number one, but if that is not possible a full tank of gas a bag full of food and running shoes would make sense.

I hope your crystal ball is busted, because global war will potentially leave just about everyone in a worse situation than an all out economic collapse. There again in your area, you have more spaces to go to than those in bigger cities and can provide a service like farming, where as city folks will have little space to hide and little serves/skills to trade.

I do not have a crystal ball, but my tea leaves are not much help either.
Mangymutt
Posts: 483
Incept: 2015-05-03

Vancouver WA
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Analog "I'm in the exact same boat"

Dude - Being wrong is MY BOAT!!!! You are not allowed on my boat :)

I wish my crytal ball or tea leaves would have told me what QE really was as I would have never believed these lies could have gone on as long as they have.

And if you insist on staying in my boat, you need to start painting the deck Mattie
Little_eddie
Posts: 1105
Incept: 2009-04-30

Delaware
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I've been out of the market also since 2009,

It's been great! I sleep great each night and we changed our life around. We now have zero debt and our living expenses (home, insurance, cars & food etc) are about 40% of our income.

Life is good at 61, retired & enjoying my hobbies.

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Think of how stupid the average person is, and realize half of them are stupider than that. - George Carlin

Tsherry
Posts: 1013
Incept: 2008-12-09

Spokane WA
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Just to clarify my point, we have collapse, and then we have war. I don't see a one or the other condition, it's both. Some ****head will decide that they need to rebuild their national patriotic spirit, and it'll be game on. The not so hidden agenda will be to to continue to fund the .gov. and the banks.

It doesn't matter who starts it, we're screwed either way.

Near Spokane is one of the world's largest USAF bases for refueling tankers--Fairchild handles a vast amount of territory. Previously, we were a SAC base. We've been First Strike since the phrase was invented.

I really need to get to work on finding a Site B.


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Omne mendacium est.
Tickerguy
Posts: 151193
Incept: 2007-06-26
A True American Patriot!
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I'm about 5 miles from Eglin as the crow flies.

If the nukes fly I get incinerated in the first 20 minutes.

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Winding it down.
Themortgagedude
Posts: 10480
Incept: 2007-12-17

saint louis
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I'm not worried about death. The whole process of dying on the other hand scares me. First Strike doesn't worry me. It's been a good ride.

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I think its time we ask ourselves if we still know the freedoms that our founding fathers intended for us. Ronald Reagan 1964
Dennisglover
Posts: 954
Incept: 2012-12-05

Huntsville, AL
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And, by the way, if the crow can fly straight, I'm about 15 miles from Redstone Arsenal and Marshall Space Flight Center. Not too many substantial hills to the West, but some fairly good ones in the other directions. But, then, there are no substantial targets in any direction for 75-80 miles. Then, there's the "overlap range", too--Chattanooga, Nashville, Gadsden, the Tri-(Quad-)Cities aren't far out of that radius. (Well, there are Athens and Decatur, which are all too near the I-65, Mobile to Detroit corridor...)

Time to hire the backhoe driver? Population density is pretty low here, as compared to other places, but goods delivery is also important, not to mention mobility. Dang, I wish I'd started noticing this stuff 40 years ago. Or 50.

Peace.

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TANSTAAFL
Themortgagedude
Posts: 10480
Incept: 2007-12-17

saint louis
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From ZH tonite

https://www.zerohedge.com/news/2018-01-1....

Kind of supports our thoughts here.

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I think its time we ask ourselves if we still know the freedoms that our founding fathers intended for us. Ronald Reagan 1964
Croumeli
Posts: 3
Incept: 2011-10-18

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I love the ticker! Thanks for so much of your insight Karl.

Tepper and Gross are short treasuries and believe the bull market is over. However, Mish thinks the recovery is already long in the tooth but any significant downturn in stocks is likely to result in bond yields crashing. He probably thinks this because as investors flee stocks, they will settle into the safety of treasuries. Why is there upward pressure on bond yields aside from the Fed trying to unwind its massive balance sheet, especially since the US is running massive trade deficits and China who is in a massive surplus has no choice but to buy US debt?
Inline
Eleua
Posts: 15183
Incept: 2007-07-05
A True American Patriot!
N 47.72/ W 122.55
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I agree with TMD that the Elite need a fall guy for the bubble. It's been blowing and it can't go on forever. The math doesn't work.

The Uniparty (it took me 25 years to finally believe in it) hates Trump. The Dem side of the Elite have an absolutely impossible Senate map to defend this year, and the only chance they have is to cause disgust and panic. They know, they absolutely know beyond a shadow of a doubt, that if the equity markets are stacking on 20-30% per year, there is not a chance in the world that people jump ship. I also believe that the heavy hitters in finance are largely Dem and their world-view is at odds with the MAGA concept. Their world-view is Third Worldesque - an elite control most, and everyone else joins identity politics to get what is left.

Bonds must sell off, just because of math. Deflation gets ignited and the money supply shrinks, taking down all asset classes. However, debt remains until defaulted, which just tightens the cycle.

My thesis is that a panic hits in time for the Dem incumbents to campaign on it for 2018, and then the deflationary cycle sets in to save them for 2020. Trump is the perfect fall guy, since his ego has him crowing about how he owns the stock market gains (and because all the Elites hate him).

Proverbs 16:18



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http://clearcutbainbridge.blogspot.com/?....
"My object in life is to dethrone God and destroy capitalism." - Karl Marx
"Destroy the family, you destroy the country." - Lenin
"Education is a weapon whose effects depend on who holds it in his hands and at whom it is aimed." - Stalin
Killben
Posts: 281
Incept: 2009-12-07

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@Mr_clueless,

"For the record, I have been out of stocks since early 2008. (And I feel like a fool for it because I wanted to get back in when the S&P500 was at around 1000, but I didn't because of all the negativity in various blogs I was reading.)"

A fellow fool here...

But think of the occasions when you were going to be proved right from 2009 to 2012. Constant intervention and bailouts were the order of the day. If the market sneezed the central banksters had a cold. Draghi's all it takes and The Fed's QE3 (that time it was going to be forever) in 2012 has changed the show for the last 5 years. Who could have said that Trump was going to be great for the stock market in 2017.

I would say the foolishness was more on the side of underestimating what the central banksters would do to keep the system afloat. But then I underestimated the courage to act that 'housing price never falls' Bernanke had. I was more like the fool thinking how could one do this and get away with it, is it not better to take the bitter pill instead of probably worse consequences later etc. i.e basically thinking of consequences and what could happen in future. I lacked the courage to act first and make others repent later.

But then being still the fool, I am still not sure how all the central banksters are going to raise rates and do QT at the same time (and NOT BLOW UP the whole thing). I would really like to see if ECB can succeed in this.

If they succeed, I have to accept that the central banksters are real magicians! Did you ever imagine that you can conjure growth just by tweaking rates and printing money. I still can't!
Click
Posts: 76
Incept: 2017-06-26

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"If the nukes fly I get incinerated in the first 20 minutes."

Perhaps.

But what if you have some warning and see what's coming? Say, for example, for what ever reason, Trump announces a strike on North Korea and China ends up launching? We might all get to watch it play out over a period of hours or days. The One and Only might even Tweet about it. Certainly, back in 63', my family saw how we were on the brink of a nuclear exchange with the USSR, so they made final preparations. Thank God it didn't happen. But it nearly did.

Only ten miles from ground zero might be enough distance to survive. It depends. At five miles, you're halfway there, already, and how long would it really take to get to a safer distance? --- even on foot? Twenty miles and the odds go way up even without meaningful cover. I could cover twenty miles by car with a ten minute warning.

I've had this discussion with some members of my family. The assumption is they won't survive. At least, that's what they like to think. But if they do in fact survive, totally unprepared, it could be an excruciatingly painful death. That's a fact.

The One and Only is not to shy to point out that he has a very big button, " and it works", and I happen to believe him. That should be warning enough for people to start making an action plan --- no matter where you live--- even on base.
Lemonaid
Posts: 10381
Incept: 2008-01-20

Metro Detroit
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China came out and said the taper is fake news.

I've been watching for the trendline breach. Looks like a stick save to stay under the trend line for now...

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"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." Ludwig von Mises
Tickerguy
Posts: 151193
Incept: 2007-06-26
A True American Patriot!
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Quote:
Only ten miles from ground zero might be enough distance to survive. It depends. At five miles, you're halfway there, already, and how long would it really take to get to a safer distance? --- even on foot? Twenty miles and the odds go way up even without meaningful cover. I could cover twenty miles by car with a ten minute warning.

I've had this discussion with some members of my family. The assumption is they won't survive. At least, that's what they like to think. But if they do in fact survive, totally unprepared, it could be an excruciatingly painful death. That's a fact.

Well now, that depends on HOW MANY land somewhat near you.

I'm pretty-well ****ed. Eglin is right here, and so is Hurlburt another 5 or so miles (Air Force Special Ops.) Then there's Tyndall on the other side about another 50-60 miles (primary flight training, among other things.) Go a bit further west and you've got Pensacola NAS (not exactly an inconsequential installation) and just north of me is Duke (which has even more fun stuff to blow up.)

My assumption is that in a "rogue" exchange nothing probably happens here. But in a true strategic exchange we eat at least three or four of them and you're almost-certainly going to be downwind of one or more. With a bit of warning I probably can survive the initial event, but whether I can get out of the range of lethal secondary effects before they get me is another matter entirely.

But yes, I have indeed thought some of this out and whether it's survivable here depends on many things. This much I do know -- I like my odds here better than I do in a big city.

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Winding it down.

Bluebird
Posts: 1805
Incept: 2008-05-02

SW Ohio
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So I live in Ohio very near Wright Patterson AFB and Springfield Air National Guard base. If things heat up, I'm toast. But in the meantime, the Air Force Museum is a treasure to see.
Eleua
Posts: 15183
Incept: 2007-07-05
A True American Patriot!
N 47.72/ W 122.55
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A large nuclear arsenal can differentiate between "primary" and other targets, since primary targets are strictly command-control and nuclear facilities (think offense). Others are secondary targets, since they don't hurt you first.

Deal with what will kill you first.

With a limited nuclear arsenal, like the NORKS, they are going to target population centers first, since that is what the biggest thumb in the eye happens to be. If KJU nuked Bangor Sub Base (Pac Fleet Ballistic missile sub base), they may kill a few thousand people, and cripple what subs are at the pier. THey don't stop a tremendous nuclear reprisal from the subs at sea, ICBMs in the Mountain-West, or our strategic bombers.

If they hit NYC, LA, or San Jose, they get a tremendous ROI on their investment, since they are pretty much fooked anyway.

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http://clearcutbainbridge.blogspot.com/?....
"My object in life is to dethrone God and destroy capitalism." - Karl Marx
"Destroy the family, you destroy the country." - Lenin
"Education is a weapon whose effects depend on who holds it in his hands and at whom it is aimed." - Stalin
Nevertoolate
Posts: 1451
Incept: 2007-08-26
A True American Patriot!
San Antonio de Bexar de runover with illegals, Texas
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Surprised the folks at Vegas are making book yet. Now if making book would influence KJU's decision, then anywhere in the bottom 2/3 rds of Kalifornia is a plus. I would evenly split my bet between San Francisco and LA.

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Democracy is a conversation between 2 wolves & a sheep discussing what's for dinner. A Constitutional Republic is found when the sheep pulls out a gun & makes clear that his 2nd Amendment Right will be exercised should the wolves attempt to hold such a "vote."-KD 9-29-15
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