OT - Dow plunges 1,175 - worst point decline in history

[54ny77]

ask two economists a question on directional trends/predictions and you'll get at least 4 answers!

meanwhile, in the real world, what would are you willing to commit your own $ to? inverse treasury etf's? any that you like? on a related note, a buddy made a large amount of $ during the crisis on levered inverse financial etf's, once it became clear that once a layer or two was peeled off the systemic onion, things weren't going to play out very well.

Originally Posted by MattTuck

I mean, looking at the trends and sizes of these imbalances, I just don't see how we make good on all the checks our government has written.

[PoppaWheelie]

Originally Posted by PoppaWheelie

Well, sure, except that part of the mix here is likely due to uncertainty around US/China trade and heavy borrowing to pay for the corporate tax cut. Not the only factors, clearly, but those two are linked to the current administration for sure.

Ha, sorry Mr Potato...didn’t realize I was responding to your comment from Feb!

[MattTuck]

Originally Posted by 54ny77

ask two economists a question on directional trends/predictions and you'll get at least 4 answers!

meanwhile, in the real world, what would are you willing to commit your own $ to? inverse treasury etf's? any that you like? on a related note, a buddy made a large amount of $ during the crisis on levered inverse financial etf's, once it became clear that once a layer or two was peeled off the systemic onion, things weren't going to play out very well.

The issue with any of those engineered ETFs is the decay over time. I've made a little money over the years by getting the timing right on a couple of big moves using options, but in general I am pretty bad at it. It becomes even harder with those types of ETFs because holding them for even a few weeks or a month can see significant decay of your investment, if the underlying index doesn't do what you think it is going to. So I would be aware of that risk with those products.

In the long term, I think we're going to see interest rates go up, and inflation go up. In fact, I'm not so sure that a portion of the stock market (and pretty much all asset classes) gains of the last decade aren't just due to inflation expectations about the future. Gold is sort of an odd ball in this regard, and I don't have a good explanation for that.

If I had any advice beyond investing in a globally diversified, market weighted portfolio, I'd think really hard about the sustainability of various sectors of the economy. In the words of someone, "unsustainable trends eventually end".

I might stay in cash and wait until prices come down (in other words, rates go up), and focus on buying stuff that produces good cash flow yield.

[Mr. Pink]

Originally Posted by 54ny77

ask two economists a question on directional trends/predictions and you'll get at least 4 answers!

meanwhile, in the real world, what would are you willing to commit your own $ to? inverse treasury etf's? any that you like? on a related note, a buddy made a large amount of $ during the crisis on levered inverse financial etf's, once it became clear that once a layer or two was peeled off the systemic onion, things weren't going to play out very well.

Unfortunately, we have a very powerful person who can effect the entire world's economy taking advice from a person who plays an economist on TV.

[joosttx]

Originally Posted by Mr. Pink

Unfortunately, we have a very powerful person who can effect the entire world's economy taking advice from a person who plays an economist on TV.

Irrational fear of rising interest rates and an over blown technology sector. That’s my one sentence reason. Please debate.

[jambee]

Houston nailed it.

It is simply insane to evaluate a company that never made a dime at billions and see their stock raise as it has.

The market has been too hot for too long. Sucks to see my company stock loose 12% in a week, but as long as everyone else is also going down, this is a correction and to be honest, it is entirely artificial.

[oldpotatoe]

Originally Posted by Mr. Pink

Unfortunately, we have a very powerful person who can effect the entire world's economy taking advice from a person who plays an economist on TV.

Ask Kan_____.........never mind, I’d get a time out for that one....

[echappist]

primer on the rising interest rate, in the context of inflation, etc

https://www.nytimes.com/2018/10/11/u...gtype=Homepage

[ptourkin]

Originally Posted by oldpotatoe

Ask Kan_____.........never mind, I’d get a time out for that one....

I'll take the heat.

Satire from Borowitz.
A visibly chastened Obama said that, at first, he thought that he had gotten away with making the stock market crash, but when he saw Hannity blame him on Fox, “I knew I had been busted.”

[MattTuck]

Originally Posted by joosttx

Irrational fear of rising interest rates and an over blown technology sector. That’s my one sentence reason. Please debate.

You may be right, but it is kind of dismissive of the fact that we're still in the midst of the biggest experiment monetary policy experiment in history, and we're now in the "unwinding" phase, with no real precedent for what happens next.

And if we find ourselves in a new crisis, even a small one, the Fed's ability to respond is compromised, and our elected representatives seem hardly up to the task.

[93KgBike]

Originally Posted by kppolich

agreed, % drop is where it's at. Not a whole lot to see here except the first "big" losing streak in a long long long time.

That's too many "long"s just going back to 2008.

[93KgBike]

I feel like the rational and empirical descriptions of the current economy are becoming more distant.

Total US trading volume increased by a factor >10 since 1985, peaking in 2008. That represents the movement of cash previously not in the markets, into the markets. Where did this concentration of capital arrive from?

Since 2008, total trading volume has decreased. But also, since 2008 the total dollar value of trading has increased. This represents the concentration of capital within the markets, and additional cash not previously in the markets dovetailing. I don't know if trading volume decreased because share prices have almost doubled since 2005, or if share volumes have doubled because trading volumes have decreased. Have trading volumes decreased because US markets are now 90% algorithmic and share based compensation strategies are less crucial? Is that just reduction of the work-force through automation? Or are corporations achieving scales of inertia that cannot be easily driven?

Markets are achieving the concentration of capital. But why, even how, are becoming more obscure.

[prototoast]

Originally Posted by 93KgBike

I feel like the rational and empirical descriptions of the current economy are becoming more distant.

Total US trading volume increased by a factor >10 since 1985, peaking in 2008. That represents the movement of cash previously not in the markets, into the markets. Where did this concentration of capital arrive from?

Since 2008, total trading volume has decreased. But also, since 2008 the total dollar value of trading has increased. This represents the concentration of capital within the markets, and additional cash not previously in the markets dovetailing. I don't know if trading volume decreased because share prices have almost doubled since 2005, or if share volumes have doubled because trading volumes have decreased. Have trading volumes decreased because US markets are now 90% algorithmic and share based compensation strategies are less crucial? Is that just reduction of the work-force through automation? Or are corporations achieving scales of inertia that cannot be easily driven?

Markets are achieving the concentration of capital. But why, even how, are becoming more obscure.

You've got a lot of stuff going on in that post, but most of what you're describing is driven by the growth in passive investing.

[54ny77]

that's all you got?

man, i could've gotten that from a cab driver.

Originally Posted by MattTuck

I might stay in cash and wait until prices come down (in other words, rates go up), and focus on buying stuff that produces good cash flow yield.

[Scuzzer]

Originally Posted by 93KgBike

Markets are achieving the concentration of capital. But why, even how, are becoming more obscure.

I only quoted this part since it seemed pointless to quote the whole mess. Any chance you can give it go in American English or am I just too stupid to understand contemporary academise even though I have a degree in Aero Engineering from Purdue.