Global Debt Time Bomb explodes soon

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Re: Global Debt Time Bomb explodes soon

Post by RoneKiln » Fri Jan 29, 2021 8:06 pm

Some of my clients in California shut down this year as well. They just couldn't compete with refineries outside the state anymore. The covid lockdowns were the tipping point.
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Re: Global Debt Time Bomb explodes soon

Post by CrossCut » Sun Jan 31, 2021 7:11 am

raptor2 wrote:
Thu Jan 28, 2021 12:37 pm
williaty wrote:
Wed Jan 27, 2021 6:12 pm
One of the guys who saw the over-shorted positions on GME early is up $22.8M USD with some of that pulled out as actual profits already. The thread discussing this today was at one point 48 minutes old with over 20,000 posts to it. Reddit's engineering team actually asked the mods if they could take it down a notch because it was crippling Reddit's back end. By mid-day, it started being more obvious that while their real push is to push the short squeeze on GME as high as possible, they're making similar, though smaller, pushes with AMC, BBBY, and EXPR just to tie up more hedge fund money. WSB is only having limited success with BBBY, but they drove AMC and EXPR up >200% in the last two days. Reading people's posts about it, this has become way more about hurting the hedge funds than these guys actually making a profit, though I'm sure at some point that'll start to get thought about again.
Full disclosure:
I bought GME on Tuesday PM; UVXY, AMC, BB & BBBY on Tuesday PM and sold all positions Wednesday before noon. So... :D ...Thank you Redditors.

That said this has been a very interesting ride that is going to have a lot of repercussions for a wide variety of people. Contrary to popular belief no hedge funds went bankrupt but at least one had to get a bailout by selling equity to cover the margin calls. It was billed as a "being able to stick it to the man class struggle". In reality it is a another example of tulip mania. Several of the on line retail brokers has stopped allowing users to buy GME , only sell it. That said if the retail brokers do not allow purchases. The market for the sales does not exist because the people doing this are not using the wholesale brokers.

The result is this AM all of the above are cratering leaving anyone who purchased yesterday out of the money. The price of all are likely to continue to decline.

In fact in the process of "sticking it to the man" these same people set a perfect mix for a long term short position and in fact the short sellers were already buying into 2022 positions. Think about what is the likely hood that 2022 that price of GME is going to be above the current price.
boskone wrote:
Wed Jan 27, 2021 6:26 pm
I mean, how dumb do you have to not have a stop-loss set? And apparently some of them doubled down on their shorts. :roll:


Typically these funds are set up to do only one thing. Short a group of stocks. They raise enough capital through P.P.M.s and such to cover likely capital calls for market gyrations and thus plan on staying the course regardless. They are not using M.O.M. but rather O.P.M. to fund this. They get a cut of the gain and do not suffer from the loss (except in reputation).

It is exceptional for them to close out a position and in this case several simply took the loss and shifted to 2022 positions. These are not retail customers and stop loss positions are not the norm.
Congrats raptor! You've got more cajones than me, with my luck I'd be the one left holding the bag trying to trade/play that game.

Silver might be their next target, https://markets.businessinsider.com/new ... 1030017108
I have a small stake in physical silver (Eagles and some junk) so I'll be watching this closely starting when the market opens tonight, although I doubt I'd sell unless the price truly went parabolic. I did check that my APMEX login still works though, just in case. :) Hope they do gold next (pretty please redditors!), silver spiking would be a tidy profit - but if gold got the same % gain as GME recently did it'd be early retirement for me.

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Re: Global Debt Time Bomb explodes soon

Post by boskone » Sun Jan 31, 2021 8:21 pm

CrossCut wrote:
Sun Jan 31, 2021 7:11 am
Silver might be their next target, https://markets.businessinsider.com/new ... 1030017108
I have a small stake in physical silver (Eagles and some junk) so I'll be watching this closely starting when the market opens tonight, although I doubt I'd sell unless the price truly went parabolic. I did check that my APMEX login still works though, just in case. :) Hope they do gold next (pretty please redditors!), silver spiking would be a tidy profit - but if gold got the same % gain as GME recently did it'd be early retirement for me.
What amuses me is that apparently people on WSB are saying that it's astroturfing by hedge funds to cover their shorts: drive up silver, sell, cover shorts.

The real question is whether those claims are true, or the "silver opponents" are deep in GME who need it to hold long enough to be dumped.

If I were going to do the stock thing, I'd've probably bought some GOOG or AAPL earlier today. Both are down, supposedly/apparently hedges selling to cover shorts. Regardless, I don't think either will stay down all that long; if nothing else, they'll peak again next time there's a product release.

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Re: Global Debt Time Bomb explodes soon

Post by CrossCut » Mon Feb 01, 2021 7:30 am

boskone wrote:
Sun Jan 31, 2021 8:21 pm
CrossCut wrote:
Sun Jan 31, 2021 7:11 am
Silver might be their next target, https://markets.businessinsider.com/new ... 1030017108
I have a small stake in physical silver (Eagles and some junk) so I'll be watching this closely starting when the market opens tonight, although I doubt I'd sell unless the price truly went parabolic. I did check that my APMEX login still works though, just in case. :) Hope they do gold next (pretty please redditors!), silver spiking would be a tidy profit - but if gold got the same % gain as GME recently did it'd be early retirement for me.
What amuses me is that apparently people on WSB are saying that it's astroturfing by hedge funds to cover their shorts: drive up silver, sell, cover shorts.

The real question is whether those claims are true, or the "silver opponents" are deep in GME who need it to hold long enough to be dumped.

If I were going to do the stock thing, I'd've probably bought some GOOG or AAPL earlier today. Both are down, supposedly/apparently hedges selling to cover shorts. Regardless, I don't think either will stay down all that long; if nothing else, they'll peak again next time there's a product release.
Could be, the hedge funds setting up a bull trap. Article this morning on why driving SLV higher alone won't work, it'd require driving up physical silver too.

https://www.fool.com/investing/2021/02/ ... ed-to-fail

This is basically what GATA has been suggesting for decades with gold, buy physical and stand for delivery on futures contracts. Lots of big players in gold though besides just hedge funds, might be trying to fight the bullion banks, central banks, and world governments (e.g. Treasury's Exchange Stabilization Fund) too as it affects currency exchange rates and confidence in fiat. If the action in silver spills over into the gold market I'd imagine both to get squashed pretty quickly.

It will be interesting to see what happens in spot silver when the NY market opens and over the next few weeks, but hard to see the 'little guys' winning too many of these battles going forward. Looking at the ten year silver chart and it's fall from $50, it reminds me of golds fall from $800 back to $250 over about the same number of years. Maybe silver will enter a multi-decade price rise like gold did.

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Re: Global Debt Time Bomb explodes soon

Post by raptor2 » Mon Feb 01, 2021 11:12 am

CrossCut wrote:
Sun Jan 31, 2021 7:11 am


Congrats raptor! You've got more cajones than me, with my luck I'd be the one left holding the bag trying to trade/play that game.
I did not bet the car much less the farm on the trade but it was a nice quick 2x return. Part of being lucky is to be willing to play; that... and when you do play remember to be the pig...not the hog. Pigs get fat; hogs go to slaughter.
CrossCut wrote:
Mon Feb 01, 2021 7:30 am

Could be, the hedge funds setting up a bull trap. Article this morning on why driving SLV higher alone won't work, it'd require driving up physical silver too.

https://www.fool.com/investing/2021/02/ ... ed-to-fail


The Silver trust (SLV) has enough flaws inherent in its operations that I doubt it would impact the physical silver market if started going crazy. It's mechanism is set up to follow the price of silver and is not likely to impact the physical silver market. Kinda like pumping GBTC; that trust will not affect the price of BTC.

My $.02 anyway...who knows?... not me ... I would have laughed if 2 weeks ago you told me that GME would top $300.


BTW these are real winners in the Game Stop trade.
https://finance.yahoo.com/m/65802ac4-1d ... -make.html
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Re: Global Debt Time Bomb explodes soon

Post by raptor2 » Tue Feb 02, 2021 12:51 pm

...and GME, AMC, BBBY and BB shares prices are in a free fall.

https://finance.yahoo.com/video/stocks- ... 18324.html
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Re: Global Debt Time Bomb explodes soon

Post by SCBrian » Tue Feb 02, 2021 4:07 pm

raptor2 wrote:
Tue Feb 02, 2021 12:51 pm
...and GME, AMC, BBBY and BB shares prices are in a free fall.

https://finance.yahoo.com/video/stocks- ... 18324.html
Couldnt be because no one can buy them?? :crazy:

There is going to be some major fall out over the actions of a few last week. Watching the lawsuits line up...
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Re: Global Debt Time Bomb explodes soon

Post by raptor2 » Tue Feb 02, 2021 4:16 pm

SCBrian wrote:
Tue Feb 02, 2021 4:07 pm
raptor2 wrote:
Tue Feb 02, 2021 12:51 pm
...and GME, AMC, BBBY and BB shares prices are in a free fall.

https://finance.yahoo.com/video/stocks- ... 18324.html
Couldnt be because no one can buy them?? :crazy:

There is going to be some major fall out over the actions of a few last week. Watching the lawsuits line up...
I do not think they froze sales again...not sure ...but yes Robinhood is going to need the $3 billion it just raised to pay off lawyers and lawsuits.
https://www.ft.com/content/790324e0-852 ... 430e1be034
Somebody even wrote an app to join the class action lawsuit
https://www.cnbc.com/2021/01/29/app-rob ... wsuit.html


I am getting out the popcorn popper to watch the action. :clownshoes:
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Re: Global Debt Time Bomb explodes soon

Post by MPMalloy » Tue Feb 02, 2021 4:35 pm

Jeff Bezos (Jeffrey Preston Bezos, né Jorgensen) is to step down as Amazon CEO in the 3Q of 2021.

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Re: Global Debt Time Bomb explodes soon

Post by MPMalloy » Tue Feb 02, 2021 4:37 pm

raptor2 wrote:
Tue Feb 02, 2021 4:16 pm
Somebody even wrote an app to join the class action lawsuit
:lol:

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Re: Global Debt Time Bomb explodes soon

Post by raptor2 » Tue Feb 02, 2021 6:55 pm

Hmmm apparently there are restrictions:
When trading platforms like Robinhood Markets fully open back to buyers “we will see what WSB is really made of. That is when you get to make it all work,” Cuban said during an “Ask Me Anything” Q&A session on the Reddit forum.

“If you can afford to hold the stock, you hold. I don’t own it, but that’s what I would do,” Cuban wrote. The billionaire investor added that he has no doubt there are funds and big players who have shorted GameStop again, thinking they are smarter than everyone on WallStreetBets.

Robinhood users are currently only allowed to purchase limited amounts of shares in certain securities. For example, users can only purchase 100 shares of GameStop Corp. and 1,250 shares of AMC Entertainment Holdings Inc. Only five securities currently have restrictions.[/quote]

I was not aware of that and in fact that would be reason for the stock price to crash.
https://finance.yahoo.com/news/mark-cub ... 47985.html
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Re: Global Debt Time Bomb explodes soon

Post by SCBrian » Wed Feb 03, 2021 3:11 pm

raptor2 wrote:
Tue Feb 02, 2021 6:55 pm
Hmmm apparently there are restrictions:
When trading platforms like Robinhood Markets fully open back to buyers “we will see what WSB is really made of. That is when you get to make it all work,” Cuban said during an “Ask Me Anything” Q&A session on the Reddit forum.

“If you can afford to hold the stock, you hold. I don’t own it, but that’s what I would do,” Cuban wrote. The billionaire investor added that he has no doubt there are funds and big players who have shorted GameStop again, thinking they are smarter than everyone on WallStreetBets.

Robinhood users are currently only allowed to purchase limited amounts of shares in certain securities. For example, users can only purchase 100 shares of GameStop Corp. and 1,250 shares of AMC Entertainment Holdings Inc. Only five securities currently have restrictions.[/quote]

I was not aware of that and in fact that would be reason for the stock price to crash.
https://finance.yahoo.com/news/mark-cub ... 47985.html
I'm sure it's just a coincidence and wouldn't have possibly been ordered by a phone call from a certain person who owns interest in both Robinhood and The fund that bailed out Melvin capital. :roll: .
*kinda Politics warning*
I'm just saying when AOC, DTrumJr , and Ted Cruz are all in agreement, there might be something there... :rofl:
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Re: Global Debt Time Bomb explodes soon

Post by dohnuts » Thu Mar 04, 2021 1:36 am

Overnight repo market trading below fail rate. Fed has to step in with something big, and some were expecting Operation Twist 3 even before this overnight development.

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Re: Global Debt Time Bomb explodes soon

Post by williaty » Thu Mar 04, 2021 9:33 am

dohnuts wrote:
Thu Mar 04, 2021 1:36 am
Overnight repo market trading below fail rate. Fed has to step in with something big, and some were expecting Operation Twist 3 even before this overnight development.
Can you translate that to normal people English?

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Re: Global Debt Time Bomb explodes soon

Post by MacWa77ace » Thu Mar 04, 2021 10:02 am

williaty wrote:
Thu Mar 04, 2021 9:33 am
dohnuts wrote:
Thu Mar 04, 2021 1:36 am
Overnight repo market trading below fail rate. Fed has to step in with something big, and some were expecting Operation Twist 3 even before this overnight development.
Can you translate that to normal people English?
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Re: Global Debt Time Bomb explodes soon

Post by MPMalloy » Thu Mar 04, 2021 10:04 am

williaty wrote:
Thu Mar 04, 2021 9:33 am
dohnuts wrote:
Thu Mar 04, 2021 1:36 am
Overnight repo market trading below fail rate. Fed has to step in with something big, and some were expecting Operation Twist 3 even before this overnight development.
Can you translate that to normal people English?
raptor, would you weighin please? TIA :)

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Re: Global Debt Time Bomb explodes soon

Post by raptor2 » Thu Mar 04, 2021 11:52 am

An article on Twist 3 in zero hedge explains it nicely.

https://www.zerohedge.com/markets/will- ... 0-tomorrow

Basically the bond markets are reacting to the stimulus and re-opening of the economy caused by the government shut down of commerce. The 10 year T bill rate is up sharply in the last few weeks and the stock market reacted with some people selling off to invest in bond.
In a note published over the weekend, Cabana writes that the Fed should revive the Operation Twist - a simultaneous selling of front-end Treasuries and buying of longer-dated paper - to effectively address key issues dealing with market functioning. According to Cabana, a Twist 3.0 "kills three birds with one stone: It pulls up front end rates, it stabilizes back end rates, and it does so in a reserve neutral way that lessens bank SLR pressure to hold more capital."

There is another, more pressing reason to launch - or at least hint at launching - a new Operation Twist: "the Fed is simultaneously losing control of both the U.S. front end and back end rates curves for different reasons."

Indeed, as discussed previously, U.S. front-end rates are “dangerously close” to negative territory - and in fact overnight GC repo did dip into negative territory last week because there’s too much cash chasing too little collateral

At the same time, the back end has experienced “pronounced illiquidity/volatility” over recent sessions and risk weighing on economic and financial conditions. In fact, as we noted yesterday, liquidity in the Treasury complex has collapsed to banana republic levels (to quote Nanex)...
Article on negative repo rates and its recovery:
https://www.reuters.com/article/us-usa- ... SKBN2AQ2NR
If you bought a repo with negative interest rates you would get back less cash you invested.


BTW a repo is simply a bank or customer lending cash back to the Fed or bank overnight for a nominal interest amount.

Large commercial entities do not have money market accounts (normally) yet they may have a lot cash sitting the bank for a variety of reasons so they buy an overnight "repurchase agreement" a.k.a Repo.
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Re: Global Debt Time Bomb explodes soon

Post by raptor2 » Thu Mar 04, 2021 3:30 pm

BTW this is a symptom of the interest rate increase we are seeing.

https://finance.yahoo.com/news/stock-ma ... 56206.html

Stock market news live updates: S&P 500 and Nasdaq erase year-to-date gains as tech selloff persists
Emily McCormick
Emily McCormick·Reporter
Thu, March 4, 2021, 12:09 PM
Stocks slumped Thursday after another technology-led selloff on Wednesday.

The Nasdaq traded lower by more than 2%, after the tech-heavy index dropped 2.7% during the regular session on Wednesday. At session lows, both the Nasdaq and S&P 500 erased gains for the year-to-date. The Nasdaq was also on track to end Thursday in formal correction territory, dropping to close more than 10% from at recent record closing high.

The moves lower came even after a new report on weekly unemployment claims came in better than expected, pointing to improving employment trends after a disappointing print on private payroll growth came in just a day earlier. During a public appearance Thursday afternoon, Federal Reserve Chair Jerome Powell failed to affirm that the central bank would immediately work to stave off inflationary pressures.

The past several weeks have seen investors increasingly rotate away from the high-growth names that led the markets higher in 2020, given that a greater economic reopening appears imminent and apt to lift stocks badly beaten down last year. Technology stocks came under exceptional selling pressure as traders turned their focus to stocks poised to benefit more directly from an impending economic reopening.

At the same time, the recent, rapid rise in Treasury yields has also deterred investors from growth stocks, with interest rates closely tied to borrowing costs for companies and consumers. The 10-year Treasury yield climbed to around 1.55% on Thursday following Powell's appearance, with the move higher representing an increase of more than 50 basis points from levels just a month ago. Bank stocks have outperformed, and the S&P 500 financials sector has been among the top performers over the year-to-date, given that bank profits tend to benefit from higher-rate environments.

"I think we just have another example of the reality show for finance geeks, and that is ‘bonds behaving badly,’ Jason Ware, chief investment officer of Albion Financial Group, told Yahoo Finance. "And as rates rise, as yields rise, what we’re continuing to see is this push against owning growth companies and in particular big cap technology.
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Re: Global Debt Time Bomb explodes soon

Post by dohnuts » Thu Mar 04, 2021 11:51 pm

Well Raptor2 explained it, more or less. In some ways a breaking of the bond repo market in the opposite way it broke in September 2019 when the repo rate went far beyond the bound the other direction.

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