Still think TITNC3: Return of the Iceberg was peak

Bonds... -5%

 

Market:



Kairo and I rooting for a crash:

 

I-Bonds are approaching 10%

 

Why Mondays?

 

It's a bloodbath out there, be safe gents

 

Even crypto is getting wrecked. Y'ouch

 

Friday was a bloodbath. This is more like nicking yourself shaving. lol

 

The leverage party may be ending.

 

Gold is bombing.

I bet stocks finish green.

 

Doubtful. They'll sacrifice a few pawns to keep the party going.

 

Small players dancing too close to the edge might get caught.

For everyone else, probably gonna take 200 to 300 more basis points to make them revise their models and change course.

 

This. No more cheap/free money with interest rates still climbing with no end in sight

 

What's left to sacrifice? Just keep printing money endlessly? The inflation train is still picking up steam which isn't a good thing

 

Theres an end in sight. There was an end in sight before this got started.

30 trillion in US debt rolling over at 5% exceeds ALL Federal discretionary spending as things stand currently. That won't happen, because debt instruments mature anywhere from a few days to 30 years so there is time to make changes. But that also limits the pace and duration of rate increases.

IN GENERAL, anything over 5% for more than 2 years would become untenable without major tax increases or major spending cuts.

So, directionally, that's the ceiling. The FFR isn't going over 5, and if it even gets that high its not staying there long.

I have a feeling the government will blink before then. When Boomer voters start screaming about their retirement accounts getting slaughtered and pension funds start catching fire, they'll back off.

If we're all lucky, inflation will abate on its own first due to supply chain bottlenecks resolving. I wouldnt hold your breath tho.

 

All good points, but if we continue to see deadlock in Congress how are new taxes going to get passed? I just see it as a game of further kicking the can down the road so that boomers and such DON'T start screaming about their retirement funds

 

I think the most likely outcome is inflation self limits as people reign in spending due to prices.

FedGov just doesn't have the room to maneuver.

 

But who cares about bonds? They've been a terrible investment for the past 30 years. Simply buying $SPY would have netted you much, much more.

 

Yeah that's the problem. What if people don't reign in spending? People are super dumb, especially when it comes to personal finance. Heck, you can make the argument that capitalism relies on credit card millionaires over-leveraging themselves.

 

wut?

The last 40 years were a bull market for bonds as rates dropped.

I think its important to understand not everyone has the same investment goals you do.

 

Eventually they will run out of combined income and credit.