Tighten your belts people...

[DrunkenSailor]

I have been meaning to put this together for awhile now since i was called out in another thread

5 of the 9 trillion of the corporate bond market is a junk bond or one step above. On top of that you have the rating agencies scrambling to figure out if the investment grade products that they gave aaa, bbb, etc... ratings to are correct. they dont have a great track record at that. If the commercial bonds arent rated correctly which we all know they arent because the agencies and congress have admitted as much, that means that the money we all invested into with our mutual funds, pensions, 401ks etc... is a much riskier investment than was initially believed and is extremely sensitive to interest rate change. All of that is just skipping past the fact that the corporate debt market is over 9 trillion dollars....

Yes the stock market is doing great. Everything is fine lol. The only reason why the stock market broke every record is due to the fact that new funding was so easy to get. I thought eventually the market would correct itself but it hasnt. Instead it has continued on an unsustainable rocket ship rise with all of our money. Here is the s & p 500 historical data on an interactive chart.

https://www.macrotrends.net/2324/sp-500-historical-chart-data

Then there are debt levels in general.

I recommend everyone poke around this website for a bit but especially play with this chart.

https://www.sifma.org/resources/research/fixed-income-chart/

Sifma is the self proclaimed voice of the securities industry and their research division is top notch.

I used to think we wouldnt see another 2008 in our lifetime. It could never be that bad again. I am starting to think i was wrong. Last time was consumer debt. I worry about the impact when it is commercial.

The fed is terrified about raising rates as they should be but the market is out of control and without government intervention i think this crash could be worse than 2008. We may actually see a negative rate environment this next round as the savior last time was to lower the fed rate to zero. If the economy is so good as everyone claims why havent they raised rates back up to 7 or more?

They may simply print more money and bonds but if you looked at the sifma chart i posted above the treasury bond market is over saturated due to all the bad debt the government bought last time. If the us bonds are down graded things would get real interesting real fast.

Inflation has gotten the best of us and things are gonna get dicey. I am for the first time in a long time genuinely concerned. This was all kinda academic and fun before. Now with the s&p crossing 3000 the dow at 27k the cliff is getting scary high.

Keep this one little tidbit in mind... Storing money under the mattress in a negative rate environment will actually cost you money.

We should repeal graham leach bliley. I think that little experiment has proven to be a bad idea.

 

[DrunkenSailor]

Thenscariest part is the socialist voice is beong heard and voted into office. If we have another serious market crash the world as we know it could change in a fundemental way.

The more i read (from industry people not talking heads on tv), the more charts i look at, the trends are pretty clear. Winter is coming lol...

 

[HotRod82]

Great post thx! I've long said this country is going bankrupt and most people look at me like I'm speaking Chinese. The last time we moved, several years ago, I found a paperback amortization table in the back of a closet and the LOWEST table was 7% ! the highest was 18%. My wife was floored when she saw it, the book was from the late 80's. Funny how no one remembers the days when a savings account actually paid real interest. There is no way that chart you posted above would look like it does if rates were anywhere near what they used to be....scary stuff.

 

[just_floatin]

I met with my CPA and investment company this week to review my options while the market is hot. I am seriously considering moving some money into a self directed IRA and purchase more rentals. I rather rely on cash flow when I retire versus relying on Wall Street.

 

[AZMIDLYF]

Borrowing to boost Consumption...now the FED is in a pickle as far as rate increases ya think?

 

[CLA]

We are in uncharted waters with interest rates, central banks, and MMT. I believe they can keep it going for much longer with more bond buying, taking rates to 0 or negative in the US and possibly sending money "helicopter money" to the populace.

Scary. Buy I'll ride the wave.

 

[MohavValley]

Drunken sailor, Japan is/has been negative, Europe just went negative, there is no place to go other than down once shit hits the fan. The entire system is very fragile, one little miss fire and it blows up. That's why they keep accommodating, this helps Trump stay in in an attempt to reverse the course of socialism.

 

[CLA]

Drunken sailor, Japan is/has been negative, Europe just went negative, there is no place to go other than down once shit hits the fan. The entire system is very fragile, one little miss fire and it blows up. That's why they keep accommodating, this helps Trump stay in in an attempt to reverse the course of socialism.

Dollar milk shake theory. Ask yourself.....if rates in the US are 0% and mortgages are .9% where is the DOW? 50-100K?

Problem is a black swan. Then its SHTF type stuff.

 

[AZMIDLYF]

Top 4 Debt/GDP countries:
Japan 253.00%
Italy 132.20%
Singapore 112.20
USA 105.40

Also:https://www.graphicmaps.com/countries-with-the-most-debt

 

[78Southwind]

Dollar milk shake theory. Ask yourself.....if rates in the US are 0% and mortgages are .9% where is the DOW? 50-100K?

Problem is a black swan. Then its SHTF type stuff.

I read this in May. Pretty crazy, buy a home and they pay you to take the loan. Now, I know it is just short-term adjustable rates but come on how can money have a negative price attached to it at the consumer level.

As mortgage-bond refinancing auctions came to a close in Denmark, it was clear that homeowners in the country were about to get negative interest rates on their loans for all maturities through to five years, representing multiple all-time lows for borrowing costs.

“During this week’s auctions, there were three times when I had to stand back a little from the screen and raise my eyebrows somewhat,” said Jeppe Borre, who analyzes the mortgage-bond market from a unit of the Nykredit group that dominates Denmark’s $450 billion home-loan industry.

For one-year adjustable-rate mortgage bonds, Nykredit’s refinancing auctions resulted in a negative rate of 0.23%. The three-year rate was minus 0.28%, while the five-year rate was minus 0.04%.

https://www.bloomberg.com/news/arti...-negative-rates-sweep-across-danish-mortgages

 

[BHC Vic]

FUCK!!! what does any of that mean?? Makes my head hurt. I don’t even have any money in the stock market. Not sure I want to. Looks like it’s going to put pops into an early grave. His mood changes day to day. Stocks are either killing it or sucking ass. I just want to go to work and pay my bills. Get to the river once a month. I’d be happy

 

[BHC Vic]

Bad time to buy a lot in Laughlin Ranch? Will there ever be another good time? Did I bring my kids into this world setting them up for failure?

 

[RCDave]

https://finance.yahoo.com/news/swift-selloff-reveals-hidden-risk-110000916.html

 

[AZMIDLYF]

Enough of these: "not especially large by Wallstreet standards"($693 million ) loans belly up and you will see the pucker.

Typical, buy a company, leverage the sh!t out of it for the payout to shareholders, and run it into insolvency. Lmao at Covenant Lite...just the same form of the weak regulations on all of the sh!tty housing loans in '07-'08. Like the saying goes: Where there's smoke...

 

[bocco]

FUCK!!! what does any of that mean?? Makes my head hurt. I don’t even have any money in the stock market. Not sure I want to. Looks like it’s going to put pops into an early grave. His mood changes day to day. Stocks are either killing it or sucking ass. I just want to go to work and pay my bills. Get to the river once a month. I’d be happy

Actually you probably do have money in the stock market if you have a 401K or possibly even a union pension plan.

 

[PaPaG]

And the Sky is falling while the smart investors make a grip of money.....when the market does correct as it always does especially this round if the country votes in a lefty it is time for cash buyers to buy up all the houses, lots, toys etc they have ever dreamed of for up to 1/2 price....cash HAS and ALWAYS will be king, for now invest with brains and try your very best to read the market and get out before it corrects....if you time it even close to correction you will be so far ahead of the game it can set you up for an early retirement or if you are young enough set you up for an amazing advantage, if your timing is off then expect to work for another 5+ years to come back to the levels prior to the correction. It's all about being well enough informed and ready to walk away from all investments in time to be ready to go on a spending spree...If you are already or set up for retirement be careful and keep a watchful eye on ALL your investments...last correction round I know many and I mean many that went on spending sprees right after it stabilized a bit at or close too the bottom and the money made was just amazing once they decided to take their profits and run....

 

[BHC Vic]

Actually you probably do have money in the stock market if you have a 401K or possibly even a union pension plan.

Yes on both. And yes our pension plan was doing great last year until the final quarter. Took a nice hit. Didn’t get close to our 7% which means pension credits will not be going up when projected originally.

 

[AZMIDLYF]

Oh yeah, how many bad home loans does a "not especially large" loan of $693 million equate to? That was only one of these at over a 1/2 a billion. Won't take many to start the dominos here.

 

[78Southwind]

Oh yeah, how many bad home loans does a "not especially large" loan of $693 million equate to? That was only one of these at over a 1/2 a billion. Won't take many to start the dominos here.

From what I remember the last shit show started with 500 billion in home loans that took a dump. Then the domino affect took place on the derivatives.

Sent from my SM-G920V using Tapatalk

 

[AZMIDLYF]

Agree...but this was only a single loan. How many of these "Covenant Lite" loans do you think are out there?

 

[78Southwind]

Agree...but this was only a single loan. How many of these "Covenant Lite" loans do you think are out there?

Don't get me wrong, I am waiting for the next shit show. Just trying to show that a 500 billion local problem can turn into a 20+ trillion world problem rather quick.

Sent from my SM-G920V using Tapatalk

 

[78Southwind]

WTF...Negative Yields on Junk Bonds

https://www.bloomberg.com/news/arti...tart-taking-hold-in-europe-s-junk-bond-market

Sub-Zero Yields Start Taking Hold in Europe's Junk-Bond Market

Central bankers hinting at more monetary stimulus have depressed yields so much that even some European junk bonds trade at levels where investors have to pay for the privilege of holding them.

The number of euro-denominated junk bonds trading with a negative yield -- a status until recently associated with ultra-safe sovereign borrowers -- now stands at 14, according to data compiled by Bloomberg. At the start of the year there were none.



Cheap money policies since the financial crisis have kept interest rates at, or near, all-time lows for the last decade. That’s prompted many investors to buy riskier assets that yield enough for them to meet their liabilities, driving bond markets higher and yields lower. The European Central Bank said on Monday it’s ready to add more stimulus to the euro zone, indicating that an end to the age of ultra-low borrowing costs is far from over.



The European trend follows a global pattern that’s seen the volume of securities yielding less than zero hovering just above $12.8 trillion, according to Bank of America Merrill Lynch.



High yield borrowers with bonds denominated in euros trading with a negative yield include:

• Ardagh Packaging Finance plc /Ardagh Holdings USA Inc.
• Altice Luxembourg SA
• Altice France SA
• Axalta Coating Systems LLC
• Constellium NV
• Arena Luxembourg Finance Sarl
• EC Finance Plc
• Nexi Capital SpA
• Nokia Corp.
• LSF10 Wolverine Investments SCA
• Smurfit Kappa Acquisitions ULC
• OI European Group BV
• Becton Dickinson Euro Finance Sarl
• WMG Acquisition Corp.

 

[78Southwind]

Getting better and better...

20-Year Mortgages Hit Zero for First Time in Danish Rate History
By
Frances Schwartzkopff
August 7, 2019, 4:05 AM MST Updated on August 7, 2019, 4:20 AM MST

In Denmark’s $495 billion mortgage-backed covered bond market, another milestone was reached on Wednesday as Nordea Bank Abp said it will start offering 20-year fixed-rate loans that charge no interest.

The development follows an announcement earlier in the week by Jyske Bank A/S, which said it will start issuing 10-year mortgages at a coupon of minus 0.5%. Danes can also now get 30-year mortgages at 0.5%, and Nordea recently adjusted its prospectus to allow for home loans up to 30 years at negative interest rates.

“It’s never been cheaper to borrow,” Lise Nytoft Bergmann, chief analyst at Nordea’s home finance unit in Denmark, said in an email. “We expect this to contribute to driving home prices higher.”

Though good news for homeowners, Bergmann said the development is “almost eerie.”

“It’s an uncomfortable thought that there are investors who are willing to lend money for 30 years and get just 0.5% in return,” she said. “It shows how scared investors are of the current situation in the financial markets, and that they expect it to take a very long time before things improve.”

Read More About Negative Rates

• Negative Rate World Encourages Unusual Ways to Play Yield Curve
• 10-Year Notes at Negative Coupons Hit Covered-Bond Market
• Investors in $480 Billion Market Gird for 30 Years of Sub-Zero
• Danske Crisis Exposes Full Extent of Negative-Rate Damage
• Negative 20-Year Yields Now a Reality in Danish Bond Market

NOTE: Realkredit Danmark said on Aug. 2 that it would open a 0.5%, 30-year bond, while Nykredit opened new 30-year, 0.5% on Aug. 5


https://www.bloomberg.com/news/arti...ar-mortgages-at-zero-interest-as-rates-plunge

 

[GRADS]

We're headed for a recession. Nothing like 2008 but it's coming.

Wait for it....

 

[JFMFG]

Wait for it....

Was waiting for someone to pop up on this. Sadly we are heading toward a recession I think.

 

[pronstar]

People have been waiting for the next recession ever since the last recession.

Inevitably there will be a cyclic correction, and people will also inevitably say “See I was right!” [emoji849]




Sent from my iPhone using Tapatalk Pro

 

[westair]

It should be over by the end of the week

 

[ChumpChange]

Wait for it....

How many years have you been posting this? lol

 

[Skinny Tire AH]

People have been waiting for the next recession ever since the last recession.

Inevitably there will be a cyclic correction, and people will also inevitably say “See I was right!” [emoji849]




Sent from my iPhone using Tapatalk Pro

These same dip-shits have predicted 15 of the last 3 recessions.

 

[78Southwind]

So, I have been waiting for the blow-off top in the market and really don't think we have seen it, yet. However, the river has been overly crowded with sea doos this year. I don't know if it's more people traveling to the river this year or if it's the new beach area they created up river from our condo. I also noticed that the AVI was packed all through May. Kind of interesting... This year I have been watching bond prices increasing, gold prices going up, stock prices going up and even bitcoin prices going up. I wonder who is correct? However, we can't deny that the 2 and 10 year has now inverted. So maybe the blow-off top is coming within the next year or two.

https://www.cnbc.com/2019/08/13/us-...level-since-2007-amid-risk-off-sentiment.html

 

[GRADS]

How many years have you been posting this? lol

For 9 months now to be exact...don't say I didn't warn you. It's why we sold off a bunch of stock last month.

 

[OldSchoolBoats]

Just remember that home prices will continue to go up.........where all my doom and gloom housing friends at.....[emoji1787][emoji1787]

Who wants sub 3% 30 year money??? I predict it will be here by Q1 2020.




Sent from my SM-N960U using Tapatalk

 

[hallett21]

So, I have been waiting for the blow-off top in the market and really don't think we have seen it, yet. However, the river has been overly crowded with sea doos this year. I don't know if it's more people traveling to the river this year or if it's the new beach area they created up river from our condo. I also noticed that the AVI was packed all through May. Kind of interesting... This year I have been watching bond prices increasing, gold prices going up, stock prices going up and even bitcoin prices going up. I wonder who is correct? However, we can't deny that the 2 and 10 year has now inverted. So maybe the blow-off top is coming within the next year or two.

https://www.cnbc.com/2019/08/13/us-...level-since-2007-amid-risk-off-sentiment.html

Sea doo wake pro 230 financed

Bayliner DX 2050

Id say this is why more people are on the water. 2 jet skis or a boat only cost 5-600 a month in payments. Most people can scrap that together right now whether they can afford it or not.

Edit: Bayliner stickers for 43,384.00

$1,000 down

8% financing

514.23 a month

 

[jet496]

For 9 months now to be exact...don't say I didn't warn you. It's why we sold off a bunch of stock last month.

My Experience has shown me that the market has no ryhme or reason to it's ups & downs so I just ride it out because I just do not know when it will sky rosket again.

I do agree that a recession or major correction should happen soon, but who knows when (days, months, years?).

I keep money in a few properties, stocks, bonds, banks & spend some on vacationing so my marbles aren't all in one sock.

 

[GRADS]

When this is the stop story on the national nightly news it tends to scare people which just makes matters worse....

 

[Carlson-jet]

I can't afford a belt. Now what?

 

[78Southwind]

Just remember that home prices will continue to go up.........where all my doom and gloom housing friends at.....[emoji1787][emoji1787]

Who wants sub 3% 30 year money??? I predict it will be here by Q1 2020.




Sent from my SM-N960U using Tapatalk

Zillow say's my house in CA is down about 8% from last year. While my river house in AZ is up about 17% from last year. Just a guess but maybe CA is topped out for a while and AZ will continue to grow as people refinance their residences and buy vacation homes?

 

[LargeOrangeFont]

How many years have you been posting this? lol

Day after Trump announced his presidential run in 2015 lol.

 

[Big B Hova]

Just remember that home prices will continue to go up.........where all my doom and gloom housing friends at.....[emoji1787][emoji1787]

Who wants sub 3% 30 year money??? I predict it will be here by Q1 2020.


Sent from my SM-N960U using Tapatalk

Then I gotta refi again!

 

[JBS]

Who wants sub 3% 30 year money??? I predict it will be here by Q1 2020.




Sent from my SM-N960U using Tapatalk

I do

If this happens Wendi will be getting a call


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[GRADS]

Just remember that home prices will continue to go up.........where all my doom and gloom housing friends at.....[emoji1787][emoji1787]

Who wants sub 3% 30 year money??? I predict it will be here by Q1 2020.

That would be super sweet. And if property values drop enough....hello house in Tahoe!

 

[ChumpChange]

For 9 months now to be exact...don't say I didn't warn you. It's why we sold off a bunch of stock last month.

Take a look at the charts after the yield curve inverts. Generally buying stocks for a while is the way to go.

 

[cofooter]

Its a self fulfilling prophecy, the more it gets talked about the more it scares people, and the more it becomes likely, especially news like MSN, they act like the world is going to end...… the market is driven by emotion. Good luck trying to predict it.

 

[Wizard29]

It's gotten to the point where the libs so badly want Trump to fail that now they're crying "recession" in hopes that it will happen. As mentioned above, it can be a self-fulfilling prophecy and that's exactly what they are hoping for.

They want the country in a recession just so they can rejoice in a Trump failure. They hate the president so much that they would rather see the country suffer instead of be successful.

Disgusting.

 

[cofooter]

It's gotten to the point where the libs so badly want Trump to fail that now they're crying "recession" in hopes that it will happen. As mentioned above, it can be a self-fulfilling prophecy and that's exactly what they are hoping for.

They want the country in a recession just so they can rejoice in a Trump failure. They hate the president so much that they would rather see the country suffer instead of be successful.

Disgusting.

Most people are not so bright...……...

 

[pronstar]

Oh look...she me stocks are on sale [emoji106]



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[GRADS]

It's gotten to the point where the libs so badly want Trump to fail that now they're crying "recession" in hopes that it will happen. As mentioned above, it can be a self-fulfilling prophecy and that's exactly what they are hoping for.

They want the country in a recession just so they can rejoice in a Trump failure. They hate the president so much that they would rather see the country suffer instead of be successful.

Disgusting.

To be honest, there is some truth to this post. If the economy takes a shit before 2020, Trump's chances of getting re-elected go way down which would make me very happy. I feel sorry for people that haven't planned for a recession....I didn't in 2008 and got caught with my pants down and lost everything had. This time around I'm ready. At this point a recession might actually help me with my purchasing power.

 

[78Southwind]

Sea doo wake pro 230 financed

View attachment 787135

Bayliner DX 2050

View attachment 787136



Id say this is why more people are on the water. 2 jet skis or a boat only cost 5-600 a month in payments. Most people can scrap that together right now whether they can afford it or not.

Edit: Bayliner stickers for 43,384.00

$1,000 down

8% financing

514.23 a month

Bayliner for $43,000? And they say there is no inflation, what is the world coming to? So what you are really saying is I can buy a used 2019 Bayliner for $20,000 in a couple years?

I wasn't thinking so much about people spending money on sea doos or boats (though that is a good example as well), it was more about people spending money to travel to the river. Like I said the AVI was pack all through May. They could be renters for all I know. Apparently, there are 600 sea doos available to rent in Laughlin/Bullhead. Maybe Rob knows more about this year compared to last year rental stats. @jeepdog I like to look for things like if a restaurant has a line to tell me if the economy is doing well or not. In this case, I was looking at the river and seeing tons of sea doos that I didn't see in the previous years. Like I said previously, it could be the fact that they increased the beach area up the river from me so it could just be the fact that more of them are coming down river instead of staying up by the bridge.

 

[78Southwind]

Take a look at the charts after the yield curve inverts. Generally buying stocks for a while is the way to go.

I am pretty sure that's why they call it a blow-off top. I believe we will probably see a lot of leverage buy-outs as well. Shit maybe we will even see good old Elon really take Tesla private.

 

[brgrcru]

To be honest, there is some truth to this post. If the economy takes a shit before 2020, Trump's chances of getting re-elected go way down which would make me very happy. I feel sorry for people that haven't planned for a recession....I didn't in 2008 and got caught with my pants down and lost everything had. This time around I'm ready. At this point a recession might actually help me with my purchasing power.

Well when your party gets in . You can forget about boating or buying a house in Tahoe.
As you will have no money for that nonsense...