U.S. stocks in free fall
Re: U.S. stocks in free fall
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Re: U.S. stocks in free fall
This is a healthy pullback not a free fall.
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Re: U.S. stocks in free fall
People tack on the "hyper" to inflation way too cavalierly. That tagline applies to situations where you take your paycheck and go as fast as you can to the grocery store before they raise prices again later in the day. It's basically a complete loss of purchasing power of the currency.Marseille07 wrote: ↑Mon May 10, 2021 10:14 pmWe probably won't hyperinflate: "hyperinflation is rapidly rising inflation, typically measuring more than 50% per month."anoop wrote: ↑Mon May 10, 2021 10:12 pmCrypto fell so not sure that holds. RE very possible. But if we hyperinflate, how will people pay to maintain their properties? They aren’t going to find renters that can keep up.
Something pretty dramatic (like a major war involving U.S. soil) would likely have to happen to get true hyper inflation anytime soon. Countries where it has happened typically face steep foreign debts that must be payable in a currency that is not their own.
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Re: U.S. stocks in free fall
My lump sum from a couple weeks ago is still up over 1%. Wake me up when we’re really falling so i can get some of those tax losses on the books
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Re: U.S. stocks in free fall
Barely down 2 % from the top. Yawn
Wake me up when we're down 20%
Wake me up when we're down 20%
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Re: U.S. stocks in free fall
Hopefully a pragmatic correction to setup for a strong summer..not worried
Re: U.S. stocks in free fall
are you trying to convince yourself or us?
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Re: U.S. stocks in free fall
Bay Area / Socal tech workers are most likely doing just that.
I'm not sure if homes are overbid though. Prices go up because people are actually affording them. Unless we start seeing foreclosures on those homes, the default assumption is that the buyers can pay the consequences just fine.
Re: U.S. stocks in free fall
I've never had any stock options of any value but I recall back just after things collapsed in ~2008. I was at San Jose airport talking to a guy and he said his neighbor lucked out big time because his options vested and he was able to cash out several million dollars just a few weeks before things fell apart and they would have been worthless.Marseille07 wrote: ↑Tue May 11, 2021 9:22 amBay Area / Socal tech workers are most likely doing just that.
I'm not sure if homes are overbid though. Prices go up because people are actually affording them. Unless we start seeing foreclosures on those homes, the default assumption is that the buyers can pay the consequences just fine.
Personally as the market drops and some of the easy money made (via Tesla and a lot of smaller tech stocks that did 100%+ last year) disappears, I'd expect home prices to come down to earth. There are other issues right now with shortages of many items including labor that also need to get resolved but when people realize they don't really need that $1M or $2M or whatever priced home, the market will slow down.
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Re: U.S. stocks in free fall
Burry described it by using parallels to Weimar. He quote some text from a book that said the collapse took something like 10 years to play out. The first 9 everything looked rosy because people were getting money for nothing. Then the collapse came (textbook hyperinflation) and it was all over.alfaspider wrote: ↑Tue May 11, 2021 8:42 amPeople tack on the "hyper" to inflation way too cavalierly. That tagline applies to situations where you take your paycheck and go as fast as you can to the grocery store before they raise prices again later in the day. It's basically a complete loss of purchasing power of the currency.Marseille07 wrote: ↑Mon May 10, 2021 10:14 pmWe probably won't hyperinflate: "hyperinflation is rapidly rising inflation, typically measuring more than 50% per month."anoop wrote: ↑Mon May 10, 2021 10:12 pmCrypto fell so not sure that holds. RE very possible. But if we hyperinflate, how will people pay to maintain their properties? They aren’t going to find renters that can keep up.
Something pretty dramatic (like a major war involving U.S. soil) would likely have to happen to get true hyper inflation anytime soon. Countries where it has happened typically face steep foreign debts that must be payable in a currency that is not their own.
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Re: U.S. stocks in free fall
That's certainly possible. The X-factor in town is crypto with a 2.4T market cap. It's possible those speculators already switched over from Tesla to crypto, and continue to laugh to the bank.rich126 wrote: ↑Tue May 11, 2021 9:48 amI've never had any stock options of any value but I recall back just after things collapsed in ~2008. I was at San Jose airport talking to a guy and he said his neighbor lucked out big time because his options vested and he was able to cash out several million dollars just a few weeks before things fell apart and they would have been worthless.Marseille07 wrote: ↑Tue May 11, 2021 9:22 amBay Area / Socal tech workers are most likely doing just that.
I'm not sure if homes are overbid though. Prices go up because people are actually affording them. Unless we start seeing foreclosures on those homes, the default assumption is that the buyers can pay the consequences just fine.
Personally as the market drops and some of the easy money made (via Tesla and a lot of smaller tech stocks that did 100%+ last year) disappears, I'd expect home prices to come down to earth. There are other issues right now with shortages of many items including labor that also need to get resolved but when people realize they don't really need that $1M or $2M or whatever priced home, the market will slow down.
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Re: U.S. stocks in free fall
Today seems like a good day to buy!
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Re: U.S. stocks in free fall
I am taking my truck in for service. Once ready I am backing up!
Tony
Tony
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Re: U.S. stocks in free fall
We thought it was going to be a rout for Tech, but they're leading the comeback today.
Re: U.S. stocks in free fall
Probably about time. The nasdaq has been in free fall since it touched its 52 week high a few weeks ago.
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Re: U.S. stocks in free fall
Weimar was using local currency to pay foreign denominated debt (for WWI reparations). The debts of the U.S. are denominated in USD. Looking at it in concrete terms:anoop wrote: ↑Tue May 11, 2021 9:49 amBurry described it by using parallels to Weimar. He quote some text from a book that said the collapse took something like 10 years to play out. The first 9 everything looked rosy because people were getting money for nothing. Then the collapse came (textbook hyperinflation) and it was all over.alfaspider wrote: ↑Tue May 11, 2021 8:42 amPeople tack on the "hyper" to inflation way too cavalierly. That tagline applies to situations where you take your paycheck and go as fast as you can to the grocery store before they raise prices again later in the day. It's basically a complete loss of purchasing power of the currency.Marseille07 wrote: ↑Mon May 10, 2021 10:14 pmWe probably won't hyperinflate: "hyperinflation is rapidly rising inflation, typically measuring more than 50% per month."
Something pretty dramatic (like a major war involving U.S. soil) would likely have to happen to get true hyper inflation anytime soon. Countries where it has happened typically face steep foreign debts that must be payable in a currency that is not their own.
Weimar owes 10 billion in pounds sterling to England for war reparations. Say Deutschmarks are worth .1 pound sterling in year 1, and they need to make a payment of $1 billion pounds sterling to meet their reparation obligations. If they print 10 billion Deutschmarks in year 1, the exchange rate falls and now in year 2 Deutschmarks are worth .05 pounds sterling. They still need to pay off those debts, so in year 3 they try to print 20 billion Deutschmarks. Now the Deutschmark falls to .025 against the pound. That cycle continues until the Deutschmark is effectively worthless. The real-world numbers are obviously a bit different, and it's not quite so simple as running the printing presses, but that's effectively what happened.
Contrast the U.S.: The U.S. owes $20 trillion dollars to bond holders. One dollar equals one dollar no matter how many are in circulation. If you simply monetize the debt, it is inflationary, but you don't have a race to worthlessness because there's no treadmill of devaluation. If someone holds $1 million in treasury bonds, they must accept $1 million USD in redemption (plus stated interest). What could change the situation if something causes the U.S. to have to start borrowing or paying in non-U.S. currency. That would require a devastation of the U.S. economy and/or an abandonment of the USD as a reserve currency (it doesn't have to be THE reserve currency, just A reserve currency that investors are willing to hold.
In pure economic terms, inflation is too much currency chasing too few goods. In a hyperinflationary situation, the supply of currency becomes approaches infinite and demand approaches zero, leading its value to approach zero. In normal inflation, there may be an increase in the money supply and a limitation based on the ability to supply goods and services. There is only so much manufacturing capacity and services that can be provided. That's the situation we are now.
The question is whether the problem of too much money and too few goods is a temporary issue with the supply of goods and services. Is it just that the supply chains are still constrained by COVID and will eventually work out, or is there just so much money in circulation that the supply of goods and services won't catch up any time soon? If the former, inflation is a blip. If the latter, we could see significant (but not hyper) inflation.
Re: U.S. stocks in free fall
Not shaping up as an RBD as of now.
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Re: U.S. stocks in free fall
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Last edited by Zeno on Sun May 16, 2021 4:13 pm, edited 1 time in total.
Re: U.S. stocks in free fall
I'm assuming RBD means "Really big drop". Its strange (sad?) that people now seem to consider drops of a few % a big drop. I view 15-20% as more of a big drop but anything under 5% is really insignificant to me.
Tesla is down 16% for the year. Many of the high flying stocks are down about the same or more. Of course that is small change to those lucky or smart enough to get in early but many jumped on the bandwagon late and are likely panicking. (GME is still holding on to $142 which I find bizarre)
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Re: U.S. stocks in free fall
^^^ Close. RBD is in the wiki: Abbreviations and Acronyms
RBD - Really Bad Day. A Bogleheads' idiomatic term coined by forum member livesoft. An early mention is in this thread: Today was a Really Bad Day.
Re: U.S. stocks in free fall
Please not another tech comeback. If Tesla reaches another ATH this summer I will vomit. Can we just have a correction already?thenextguy wrote: ↑Tue May 11, 2021 10:35 am We thought it was going to be a rout for Tech, but they're leading the comeback today.
Re: U.S. stocks in free fall
We are in the trading window for FAANG right now.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: U.S. stocks in free fall
Burry's confused. If you want to learn the actual history, a good starting point is this episode of the Odd Lots podcast with Zach Carter.anoop wrote: ↑Tue May 11, 2021 9:49 am Burry described it by using parallels to Weimar. He quote some text from a book that said the collapse took something like 10 years to play out. The first 9 everything looked rosy because people were getting money for nothing. Then the collapse came (textbook hyperinflation) and it was all over.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: U.S. stocks in free fall
Yeah, if Burry actually made a serious comparison to Weimar, and not just some poorly though out comment, I'm going to have to give him demerits for not knowing basic economic history.drk wrote: ↑Tue May 11, 2021 12:20 pm
Burry's confused. If you want to learn the actual history, a good starting point is this episode of the Odd Lots podcast with Zach Carter.
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Re: U.S. stocks in free fall
We are witnessing a flight to safety in ARKK, COIN, and DOGE.
Edit: And GME. Can't forget that.
Edit: And GME. Can't forget that.
Re: U.S. stocks in free fall
Here's one of many blogs discussing Burry's tweets.
https://www.epiceconomist.com/michael-b ... is-coming/
I'm not enough of an expert to make an informed critique of his analysis. But I think for someone who has profited handsomely from the last crisis (GFC) I kind of take him more seriously than our fed that claimed "subprime is contained" and then later nationalized our banking system and put the economy on permanent life support.
https://www.epiceconomist.com/michael-b ... is-coming/
I'm not enough of an expert to make an informed critique of his analysis. But I think for someone who has profited handsomely from the last crisis (GFC) I kind of take him more seriously than our fed that claimed "subprime is contained" and then later nationalized our banking system and put the economy on permanent life support.
Re: U.S. stocks in free fall
Value stocks had a nice 4 months (after an awful decade). Time to send them back into the gutter!
Re: U.S. stocks in free fall
I have the opposite opinion.anoop wrote: ↑Tue May 11, 2021 12:45 pm Here's one of many blogs discussing Burry's tweets.
https://www.epiceconomist.com/michael-b ... is-coming/
I'm not enough of an expert to make an informed critique of his analysis. But I think for someone who has profited handsomely from the last crisis (GFC) I kind of take him more seriously than our fed that claimed "subprime is contained" and then later nationalized our banking system and put the economy on permanent life support.
That kind of 'big win' is notorious for creating cognitive bias issues.
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Re: U.S. stocks in free fall
I like Dr. Burry but it's hard to take him seriously when he constantly deletes tweets then later says "I will have proof I warned." This argument is only valid if the tweet in question remains undeleted.anoop wrote: ↑Tue May 11, 2021 12:45 pm Here's one of many blogs discussing Burry's tweets.
https://www.epiceconomist.com/michael-b ... is-coming/
I'm not enough of an expert to make an informed critique of his analysis. But I think for someone who has profited handsomely from the last crisis (GFC) I kind of take him more seriously than our fed that claimed "subprime is contained" and then later nationalized our banking system and put the economy on permanent life support.
Re: U.S. stocks in free fall
Seriously. Didn't he claim that the Feds came after him after he tweeted about hyperinflation? I mean, yeah right. He's not just wearing a tinfoil hat, he's got full set of tinfoil body armor. He might be right but he is just not a credible source.Marseille07 wrote: ↑Tue May 11, 2021 12:50 pmI like Dr. Burry but it's hard to take him seriously when he constantly deletes tweets then later says "I will have proof I warned." This argument is only valid if the tweet in question remains undeleted.anoop wrote: ↑Tue May 11, 2021 12:45 pm Here's one of many blogs discussing Burry's tweets.
https://www.epiceconomist.com/michael-b ... is-coming/
I'm not enough of an expert to make an informed critique of his analysis. But I think for someone who has profited handsomely from the last crisis (GFC) I kind of take him more seriously than our fed that claimed "subprime is contained" and then later nationalized our banking system and put the economy on permanent life support.
Re: U.S. stocks in free fall
He deleted his entire twitter account because the SEC paid him a visit.Marseille07 wrote: ↑Tue May 11, 2021 12:50 pmI like Dr. Burry but it's hard to take him seriously when he constantly deletes tweets then later says "I will have proof I warned." This argument is only valid if the tweet in question remains undeleted.anoop wrote: ↑Tue May 11, 2021 12:45 pm Here's one of many blogs discussing Burry's tweets.
https://www.epiceconomist.com/michael-b ... is-coming/
I'm not enough of an expert to make an informed critique of his analysis. But I think for someone who has profited handsomely from the last crisis (GFC) I kind of take him more seriously than our fed that claimed "subprime is contained" and then later nationalized our banking system and put the economy on permanent life support.
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Re: U.S. stocks in free fall
Watch, It will pay! I may have been early, but I'm not wrong!anoop wrote: ↑Tue May 11, 2021 12:53 pmHe deleted his entire twitter account because the SEC paid him a visit.Marseille07 wrote: ↑Tue May 11, 2021 12:50 pmI like Dr. Burry but it's hard to take him seriously when he constantly deletes tweets then later says "I will have proof I warned." This argument is only valid if the tweet in question remains undeleted.anoop wrote: ↑Tue May 11, 2021 12:45 pm Here's one of many blogs discussing Burry's tweets.
https://www.epiceconomist.com/michael-b ... is-coming/
I'm not enough of an expert to make an informed critique of his analysis. But I think for someone who has profited handsomely from the last crisis (GFC) I kind of take him more seriously than our fed that claimed "subprime is contained" and then later nationalized our banking system and put the economy on permanent life support.
Re: U.S. stocks in free fall
I have a hard time believing that the SEC makes house calls on people who tweet about hyperinflation. Isn't Burry an anti-vaxxer and general conspiracy theorist? Really hard to take him seriously.anoop wrote: ↑Tue May 11, 2021 12:53 pmHe deleted his entire twitter account because the SEC paid him a visit.Marseille07 wrote: ↑Tue May 11, 2021 12:50 pmI like Dr. Burry but it's hard to take him seriously when he constantly deletes tweets then later says "I will have proof I warned." This argument is only valid if the tweet in question remains undeleted.anoop wrote: ↑Tue May 11, 2021 12:45 pm Here's one of many blogs discussing Burry's tweets.
https://www.epiceconomist.com/michael-b ... is-coming/
I'm not enough of an expert to make an informed critique of his analysis. But I think for someone who has profited handsomely from the last crisis (GFC) I kind of take him more seriously than our fed that claimed "subprime is contained" and then later nationalized our banking system and put the economy on permanent life support.
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Re: U.S. stocks in free fall
Do you believe that?
Also, if tweeting about inflation was going to get "the government" after you, wouldn't it be the Treasury?
After all, the Secret Service originally worked for the Treasury Dept until 2003.
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Re: U.S. stocks in free fall
I think it's because he's also a trader by profession.
Re: U.S. stocks in free fall
My allocation yesterday was 61/39. Today, it may possibly be 60/40. My IPS says to go about my business.
Re: U.S. stocks in free fall
I'm skeptical, to say the least.
Fund managers, hedge fund operators, etc appear on CNBC all the time pontificating on various macro economic matters.
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Re: U.S. stocks in free fall
Agree. He was also tweeting about Tesla, GME, BTC etc. He is/was short on some of these. I think the SEC visit had to do with the appearance his tweets were efforts to manipulate the prices of stocks he had positions in.
Re: U.S. stocks in free fall
It's the classic case of an intelligent person that was right, in a big way, once and is now bathing in legitimacy. On top of that, he gained a lot of fame through "The Big Short", which adds to his influence. He could make a 100 wrong predictions from then on and still retain that aura.
I have no doubt the government agencies would be interested in what he tweets about. He has the clout and funds to do some damage, if he wants to.
I don't take action based on his opinions, though. Tired of the classic "the walls are caving in" spiel, by folks like that.
I have no doubt the government agencies would be interested in what he tweets about. He has the clout and funds to do some damage, if he wants to.
I don't take action based on his opinions, though. Tired of the classic "the walls are caving in" spiel, by folks like that.
Re: U.S. stocks in free fall
Eh, maybe he just got lucky. Thousands of active investors thinking they have it all figured out and making bets, some are going to be right by sheer chance and suddenly they knew it was all a bubble. Had he been a year too early, irrc, his bet would have failed. Permabears gonna bear.OohLaLa wrote: ↑Tue May 11, 2021 2:14 pm It's the classic case of an intelligent person that was right, in a big way, once and is now bathing in legitimacy. On top of that, he gained a lot of fame through "The Big Short", which adds to his influence. He could make a 100 wrong predictions from then on and still retain that aura. hat.
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Re: U.S. stocks in free fall
NASDAQ is very slightly up for the day at this moment.
Answering a question is easy -- asking the right question is the hard part.
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Re: U.S. stocks in free fall
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Re: U.S. stocks in free fall
I wouldn't celebrate NASDAQ just yet, it lost 2.5% yesterday and doing less bad today that's all. A sell-off can continue here.
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Re: U.S. stocks in free fall
Of course it can. These short term blips mean absolutely nothing. Any stock or index may be the highest it will ever be in the next 5 years, right now. Or, it may be the lowest it will ever be again. Who knows?Marseille07 wrote: ↑Tue May 11, 2021 3:03 pm I wouldn't celebrate NASDAQ just yet, it lost 2.5% yesterday and doing less bad today that's all. A sell-off can continue here.