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Catalysts for The Global Financial Crisis 2.0The current level of euphoria and speculation on Wall Street is likely to go down in history in the same way that the misplaced optimism of speculators in 1929 was immortalized by the tremendous crash and ensuing depression. The current dynamics at play are more similar to that period than most realize. Many potential catalysts for the Global Financial Crisis 2.0 are beginning to rear their heads, including things such as: -The auto loan bubble -The residential & commercial real estate bubble -The private equity and venture capital bubble -The largest losses in the total bond market in generations -Highest level of Federal Debt to GDP in US history and extremely high level of consumer & corporate debt in US history -The most overvalued market based on forward earnings in history (Based on my expectations of S&P 2023 earnings will fall below 140). Peak margins above -13% coming back under 10% will also help to drive this. -The fastest pace of interest rate hikes since Paul Volcker and $90 billion of quantitative tightening per month. -The crypto bubble implosion where many exchanges are likely to fail due to their ponzi-like staking dynamics and unprofitable nature of exchanges like Coinbase. We are starting to see the beginnings of the financial contagion from FTX into other exchanges and coins. This is happening in an industry valued at over $3 trillion at its peak. -The Chinese real estate crisis and recession -The energy crisis which has curtailed over 20% of EU industrial capacity and is sending Europe into a recession. This is leading to increased energy costs around the world. -Looming sovereign debt crises & currency crises for many emerging and certain developed economies. The $1.6 trillion auto loan bubble is reminiscent of the subprime lending bubble. There were incredibly loose lending standards in this auto loan bubble, where people that received federal stimulus checks were able to claim these as income. This entitled them to larger sized loans than they would have otherwise had access too. Many of these loans were made at over 130% loan to value ratio. These loans have been packaged up as bonds and sold off to investors hungry in search for yield in a world of artificially low interest rates, suppressed by the Fed for the better part of 14 years since the Global Financial Crisis. The amount of delinquent auto loans has continued to increase, and the looming crisis represents a huge threat to financial stability. As real wages and employment continue to fall, the amount of delinquent loans will continue to rise. Earnings for the S&P 500 in Q3 have already started to contract more than 5% year over year (excluding energy) and yet many analysts still expect some, to no growth of earnings in 2023. Earnings are likely to collapse over 40% in 2023, pressured by falling consumer demand and falling operating margins. Consumer sentiment registered the worst sentiment among US consumers since the great depression. All of the Fed manufacturing and service data components show comparable data now to data being released in mid 2008 to the spring of 2009, all with continuously negative trends. Capital expenditures have begun decreasing and mass layoffs are just beginning. 37% of US small businesses could not pay their rent in full in October. Many companies will be forced to close their doors permanently and layoff their entire staff. Consumption began to fall rapidly after the Fed began quantitative tightening and ended quantitative easing. The effects finally began hitting company earnings largely in Q3, with much more pain to follow. Meanwhile, many companies continued to hire large amounts of people unaware that consumption would continue to collapse. As asset prices fall further and inflation stays elevated, real wages will continue falling. Student loan payments begin again at the start of 2023, further harming consumer sentiment. Money supply growth began stagnating early in the year in 1929 and the federal government began to tighten spending with the New Deal programs in 1936 before the crash happened in 1937. Bank balance sheets have been flat for 2022 while the central bank balance sheet has been contracting leading to a slight contraction in the money supply. The contracting growth of monetary supply and fast paced increases in interest rates will lead to a large-scale downturn in GDP. On a technical basis, the current market setup looks very similar to 1929, 1937, 1973-1974, 1987, and 2008. All of which had major rallies that topped in late summer / fall before crashing over 30%. All of these crashes took place over the span of less than 3 months, with the majority of the percentage decline occurring over a period of 2-3 weeks. There are dozens of companies that are virtually guaranteed to go bust in this downturn based on an overview of their financials. There have never been so many listed companies that reached valuations in the billions at their peak with no earnings. Many companies at the time of this writing still have valuations of over 6 times sales and many companies such as Coinbase, Uber, and Rivian are still valued at over $10 billion market caps whilst losing hundreds of millions of dollars per quarter. The dozens of zombie companies in the S&P 500 are being forced into rolling their debts at higher interest rates while their earnings fall. This will be the largest debt deleveraging cycle in the US economy since the great depression, because this is the largest accumulation of bad debts since the roaring twenties. It is not long until the credit risk is truly realized by market participants, and interest rates spike throughout the economy. This would include the inter-bank lending rate and junk rated bonds which would lead to a financial crisis. The longer the Fed’s quantitative tightening runs, the more inevitable the financial crisis becomes. The Fed ran the balance sheet down around $600 billion over the course of 2018 into late summer of 2019 before inter-bank lending rates started to spike. This time, the Fed has run the balance sheet down close to $300 billion so far with a plan of reaching over a $600 billion runoff in Q1 of 2023. The hopes for a Fed pivot are misplaced. A Fed pivot on interest rate hikes and even a reversal of the rate hikes cannot re-incentivize people to borrow. When you’re in a contracting credit cycle and business cycle downturn, debt begins to be paid off and defaulted on rather than excessively accumulated. The demand to borrow collapses even if interest rates were lowered by the Fed. Therefore, bear markets and recessions usually don’t end until many months after the Fed has already begun cutting interest rates. This was seen in the Great Recession and the dot com bubble of 2000; where the market didn’t bottom until over 18 months after the Fed began cutting rates.
SP:SPXShort
by Alexander_C_Lambert
2
Is the delinquency rate too good to be true?The red indicator shows the level of delinquency for each quarter. The blue index is the SPX. We have an inverse correlation. With the increase in interest rates around the world, the cost of money becomes more expensive. The payment of loans becomes more expensive, so the percentage of defaulters tends to increase. To pay off debts, positions in the equity market are liquidated. I'm waiting for the Q3 result (quarter 3 - July to September). Any bullish indication above the value of 1.24 (quarter 1) would already be a yellow signal. A value above 1.43 (Q1 2019) would be a red flag for an earthquake. That would trigger a further drop in the equity market...
FRED:DRALACBS
by andre_007
1
SP500 vs M2When comparing the performance of the SP500 to the expansion of the money supply, you get a completely different picture from a traditional SP500 chart. Instead of a lost decade, try 2 1/2. We're below the levels we reached in 1995, before much of the dot com bubble. A little TA suggests we could fall 10% (3200) to 30% (2500) before this is all over. I'm definitely getting a lot of 2000-2003 vibes from the economy right now, while others are comparing it to 1929-33.
SP:SPXShort
by CapnBigPain
ETHEREUM SHORT / ETH SHORTI am in love with the Cryptocurrencies, Blockchain, De-Fi and Web 3.0 and I will continue to search about this revolution. The Ethereum is one of the best in blockchain and I really like the purpose and vision of the founder and community. I love this kind of projects: Ethereum, Cardano... Although I do not see the security of the code as very effective, I like this proyect on the long-term. I think it's unfortunate that the world looks rigid to prices, to some numbers. Many of us here are investors and we are looking for returns. When things get ugly, even if we don't want it to, they get ugly and no one can change it. I have given details about this crash on other ideas, specially a cryptocurrency edition: "THE BITCOIN CRASH" (where I explain the crash of cryptocurrencies and bitcoin), I recommend you to take a lot at it for a further investigation. On Ethereum , we can see the highest peak: 4872.56 on 10 Nov, 2021 . And on the 18 Jun, 2022 the price was 993.94 : representing a fall of -78.65% If we take a look at the S&P 500 , we can see the highest peak: 4818.04 on 04 Jan, 2022 . And on the 22 Jun, 2022 the price was 3666.32 : representing a fall of 23.71% Where is the problem here? well if we take a look of all the crisis we have had, the drop was always between -45% and -60%. As far as we can "estimate", another fall is coming. Apart from the percentage of fall, the crisis in which we are still not over... then the market unfortunately need another drop... If we look at the S&P 500 it needs another fall of -23.71% since 993.94 (but we can see a more abrupt and longer fall). If we look at Ethereum it needs another fall of -78.65% since 3666.32 (but we can see a more abrupt and longer fall). Leaving us the price of Ether (ETH) at 221 I know that Ethereum will soon release its Ethereum 2.0 update and if all goes well the programs and applications on Ethereum will be more agile, and it can serve as a small support to the price of Ether. But inflation is inflation, falls are falls, crisis are crisis... Unfortunately this will be a long recovery since all the bubbles in the world have come together and created a huge one (check my linked ideas to know more). I wish long life and development of cryptocurrencies. Remember that not everything is the price, human development and progress is worth more than that. THIS IS NOT FINANCIAL ADVICE. YOU AND YOU ONLY ARE RESPONSIBLE FOR THE DECISIONS YOU MAKE. Any idea or point of view that you want to contribute in the comments, you are welcome, thanks for reading a like would be appreciated <3 Thanks you very much, Have a nice day!
Short
by TheWaterBottle
How occur the House Debt Bubble on 2008I'm watching the past how occur the House Debt Bubble on 2008 in the Real State Housing in America. This it's S&P 500 how this economic indicator behavior during the year 2008-2009 into this worse financial crisis in North America. So, I want to share our present situation what the S&P it's behavior now: Ok, we're in the possible bubble financial in this high point as we forming a higher low in the market structure indicating weak in the trend. Now, if I see that S&P 500 break down the EMA 200 and make a resistance pull back below of the EMA 200, this will be the beginning of the death cross in the stock market and market crash entering in the bubble financial. Ok, and now we're going to discuss How the S&P 500 behavior in the past? 1) We see a very similar patron formed in our present. 2) We see a higher low formed in the past indicating weak in the trend, and the recently market structure a market trap that I see in our present 3) When break down the EMA 200 and make this pull back below of the EMA 200, the financial market began their bubble financial on 2008 and crash of the financial market. At the moment, we see the 2 criteria confirmed, and we could to entry in the exactly moment of market trap developing now. So guys, if you want to read about how this House Debt Bubble occur on 2008, there're a lot educational content in You Tube, documental, wikipedia or blog to read and watching this past history that look very interesting to understand how this occur, the history it's very extensive to post it here. Also, there a lot content to check out in internet, and also, I suggsted to study and watch the 2 bubble in our history 1) "Crack of 29", called the bubble financial on 1929, the most famous oil financial crisis in the worldwide occur in America in the century XX. 2) House Debt bubble on 2008, called the Real State Housing crisis in America that made an deep impact in the financial market and one of the worse bubble in the history of the humanity. I hope that this content educational support you
SP:SPXEducation
by harisonhbn9718
2
Nasdaq 5x Overvalued, Irrational?The Nasdaq is worth about 10x of what it was in 1990, in real terms, if you take away all the money printing. The support structure from the 1990s that decayed in 2008 has now been resistance for a *decade*, and now that we're at a historical zone of sky high valuations and overboughtness, it wouldn't surprise me if it dropped 75% from here. What if there is more money printing, you say? Wouldn't that just make everyone rich? Well, the dollar loses about 5% of its spending power per year historically, so if you had simply held since 2000, you'd have lost roughly about 80-90% of that spending power. It's important to not repeat the same fallacy as people did in the 80s and 90s. It blew up in people's faces even back when the economy was supported by stronger fundamentals and there was a greater widespread success of passive wealth accumulation. Traders are delusional, and perhaps maybe not temporarily on a short-term or medium-term timeframe where prices are highly random, but especially on a long-term one. The Federal Reserve has been trying to float this long-term sentiment for a while now, in the face of terrible fundamentals, and now they don't really have any ammo left. Just look how the price tries to trace the white trendline but continues to lag and has remained below. This tells you all you need to know without even getting into monetary policy. But even if you look at monetary policy, look at the ammo they are using: they are jawboning claims that the job market is strong because job openings are high, which is a trailing indicator. So chances are in 3 or 6 months, job openings will contract and they will no longer have any poor excuses to linger in their knob turning, hand waving, and making 180 degree pivots in their decision making process. Not to mention, job openings are contracting at a pace only seen since, you guessed it, 2020! Even if they stop jawboning, what padding do they have? 1.5T of reverse repo? That pales in comparison to the 9T that was printed to prop up prices in 2020. Also, just look at some of the companies on the list: JD.com (Chinese company) Baidu (Chinese company) Starbucks Blizzard Do you really think that this hodgepodge of companies are fundamentally strong? Why would anyone put their future in the hands of an index with distorted, contrasting interests and motivations, and foreign ownership? Is that not literally the definition of irrational? irrational; adjective (1) Not endowed with reason. (2) Affected by loss of usual or normal mental clarity; incoherent, as from shock. (3) Marked by a lack of accord with reason or sound judgment. If that doesn't describe the situation perfectly, I don't know what does. Eventually, this thing goes down. With or without money printing. I hope you enjoyed this idea. Let me know what you think, thanks for taking a look, and don't forget to hedge your bets!
TVC:NDQShort
by fringe_chartist
9
Chinese Real Estate -8% TodayJust FYI, an equally price-weighted basket of large Chinese real estate companies is down 8% today. Rumor is going around lots of companies in this sector are not paying interest payments and are on the verge of default. Maybe it could spill over into global markets? Dare I say it could be an outbreak in the market flu? These companies are much larger than Enron. Evergrande (HKEX:3333) by itself has 120,000 employees, about 6 times as many as Enron had. Maybe something to think about. Here is the symbol if you want to view it yourself: '1918'/2.912+'0960'/2.862+'2202'/2.623+'2777'/1.112+'3333'/1.527+'2007' I hope this was somehow useful. Good luck and don't forget to hedge your bets!
HKEX:1918
by fringe_chartist
8
FEDEX SHORT (FDX SHORT) :(Hello, I have explained many things about the recession in my idea about the world crisis of 2023. And other articles such as the OIL SHORT, or THE BITCOIN CRASH (I will leave all these ideas linked.) But here I want to delve deeper into supply chains. I'm here again to show you a SHORT idea against FedEx , that company that is in the middle of all the orders in the world. What would we do without transportation chains? They are always in the middle of "customers", "retailers", manufacturers" and "suppliers". Transport chains like FedEx are very necessary, since without them the orders could not be transported. Now the words: "customers", "retailers", manufacturers" and "suppliers". Sounds me as a special effect, THE BULLWHIP EFFECT. You know, the BULLWHIP EFFECT, as the name suggests: "bullwhip", with a small change in the "whip", could cause devastating effects in the "whiplash". I recommend to search on Google about the Bullwhip Effect, there are nice videos on YouTube. The bullwhip effect in demand forecasting arises when each channel member forecasts demand based on information derived from the ordering patterns of an immediate inferior member. It basically consists in that consumer demand does not present significant fluctuations, while inventories reveal important changes, showing a decrease or excess in stock levels. If, in the different links of the supply chain, they do not handle constant and true information on their inventories and consumer demand for their products, the bullwhip effect gains strength, generating an excess of safety stock, which, as is known, radically increases the cost. , the end product. What are the causes of this effect? Lack of information between suppliers and intermediate buyers. Management without order in production orders, generating volatility in shipments. Possible periods without demand for the goods. Possibilities of obtaining wholesale discounts (Which generates time problems). Inflated or strategic orders. (Taking advantage of market conditions). Supply uncertainty. It can generate unnecessary orders. This effect is so devastating that it is very difficult to detect it really, but it is more difficult to detect it if we are in a "SLUMPFLATION"... I was not amused when the media said that the crisis would not yet come. OBVIOUSLY I don't want any crisis. What I don't want is for the crisis to be worse. They always make the same mistake, they hide the real data and say that the recession hasn't arrived yet. But in a few months the recession was sooner than expected. What is in the middle of all the BULLWHIP EFFECT? - Answer: "Transport Chains" Actually the transport chains will also be affected, just put on some music in a dark room, close your eyes, and think about it. Don't let your money foolishly burn! Bubble within bubble within bubble within bubble within bubble within bubble... SPLASH! I do not have much to add. You just need to do a little research on the internet, DON'T TRUST ANYONE, NOT THE FED, NOR THE PRESIDENT, NOR THE INTERNET, NOR DO YOU TRUST ME. You can only trust yourself and your research that you have done. I AM NOT A FINANCIAL ADVISOR AND PLEASE SEARCH THE INFORMATION ON YOUR OWN, BEFORE MAKING ANY DECISION. YOU AND YOU ONLY ARE RESPONSIBLE FOR YOUR INVESTMENTS AND IN NO WAY WILL I BE RESPONSIBLE IF YOU USE THIS IDEA THAT I AM SHARING HERE. Thank you very much for reading this article and not closing it like others. Have a nice day, Esiquiel.
NYSE:FDXShort
by TheWaterBottle
8
Nostradamus 101: BTC/EUR 4 months aheadYes, nobody knows what will happen tomorrow, but based on patterns we can safely assume that BTC has overheated. Enjoy the next few months fellas, it will be a ride, FOMO campaigns non-stop, don't get fooled, just play your day-trade, in and out, unless you are acquiring spot assets in which case HODL. If I were you, I would wait for BTC to re-test the 47,000 area and then go short until 41,500, the rest is up to you. This is not financial advice, just a prediction based on the audacity of bankers during the 2008 mortgage crisis and 2012 sovereign debt crisis. Nothing is ever what it seems, but if you can use this prediction to your advantage, good for you. Enjoy. You're welcome.
BShort
by epiclegendaryman
29
Timing The Housing Market, Patterns Always (Win / Win Strategy)For over 2 years we've heavily referenced the NAIL ETF ( Provided by Direxion ) to get a better sense of the overall housing market. As a measure of context, our experience / trading background included heavy exposure in supporting MBS (Mortgage Backed Securities) and ABS (Asset Backed Securities) reference data providers. This is in no-way investment advice. Needless to say, that with the right view, this particular security has been a pretty strong indicator on how the general housing and construction market will perform both in the short and long term. One question that we are constantly asked, is whether the support price has already been reached. Well, historically speaking the support price hovers around US$20 and then bounces to over US$95. As part of our general methodology, we focus on generating a high volume of trades with automation, this allows for compounded returns (huge fan of pyramiding). So, buying at the support price, could well be one long-term strategy once the price reaches the US$20 support (if one can manage the stress associated with short-term risk), should the price drop even further one could increase the position to average down for a more preferable price. On the other hand, we recommend that traders consider using two timeframes of reference for a guide on support and resistance levels. As an example, one could look at the long-term trend with 2–4-hour candlesticks across a large volume of ticks and then move to a shorter time-frame (such as the 15-minute candles) once a direction is established, to focus on directionally advantageous positions (either bullish or bearish outlook). This allows a swing-trader to remain in a position during times of volatility with a strong resolve based on back-tests that the future outcome will have some predictability. The reason for this post is that we find that many "newly minted" retail swing-traders are focused on the short-term gain and tend to have stop-losses triggered fairly quickly. If one where to consider the approach above, a more loosely defined (%) stop-limit would allow for improved returns contingent on one using the long-term outlook as a guide. Final Thoughts Regardless of your strategy, we recommend one always trades with stop-limits and profit targets (this can be established with the tradingview strategy-tester), and more importantly focus on consistency. There is no such thing as a silver bullet, but historical trends on etfs certainly do help with timing.
AMEX:NAILLong
by UltraAlgo
4
THE BITCOIN CRASHIt is clear that the cryptocurrency bubble has suffered a fall, but the worst is yet to come. Bitcoin does not have any kind of value, and this reminds me of the .com bubble of 99... where only those companies that really provided good value survived. Well, I think something will happen this way with the "Blockchain" technology. Many worthless projects will be destroyed and only those with a very good value will survive in the future. The currency "Bitcoin" is not a PONZI. What is a PONZI is the number of projects that are created in order to scam people, we have already seen many scams... Squidgame token... Omicron Coin... LUNA... USDT?? These scam projects or projects with pure FOMO and meaningless, as they happened in the 99's, will devastate the entire Blockchain and economic sector... Bitcoin has provided a great technology, the "Blockchain" that is why I appreciate it like many other people. Bitcoin is great and I'm a big fan of it, but sadly, the bubble is going to burst. Without a doubt THE WORST WORLD CRISIS as I mentioned in my other article of "2023 Global Crisis". It's literally not one bubble, it's several... You would see this bubble as a bubble within a bubble within a bubble within a bubble within a bubble within a BIG bubble. If any bubble bursts (which will burst), the rest will too, maybe a little longer or a little less, but they will. In the graph you can see that my levels to which Bitcoin can fall are between $6,000 and $25 Some people will call me crazy, but in reality my figure is not true since no one can predict the PRICE of the market. What people can predict is how other people predict a price with FOMO. You don't have to be a genius to see it, you just have to walk away from the party and see how others enjoy very loud music while the next morning everyone is on the floor. Please do your own research and do a lot of research on this. DO NOT PUT YOUR MONEY IN CRYPTO STABLE COINS, Thanks. I AM NOT A FINANCIAL ADVISOR. YOU AND ONLY YOU ARE RESPONSIBLE FOR YOUR INVESTMENTS AFTER READING THIS ARTICLE. Thank for reading this article (if anyone has read it), A pleasure to share my advice, Esiquiel ;)
BITSTAMP:BTCUSDShort
by TheWaterBottle
3
Bitcoin, crypto and/or S&P 500 long, come back laterOn a long-term weekly chart of the S&P 500, I have noticed that the MACD can give us an idea by its downtrend (white line) of when we might hit the bottom of the bear market. Being long-term, this could be from 6 months to more than a year. Combined with our Elliot Waves and Michael Burry's prediction we have an interval for the S&P 500 to fall from its current value between (20% & 48%) that the market has yet to fall. The good thing about this is that home prices could plummet from rising mortgage rates. For those who trade long crypto, and/or S&P 500 maybe it would be better to come back later.
SP:SPX
by Lottini