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Message
re: Dow down 700 pts
Posted on 12/7/18 at 12:28 pm to Hussss
Posted on 12/7/18 at 12:28 pm to Hussss
quote:We've had mutual funds for many decades. Selling a mutual fund also impacts many stocks. If ETF or mutual funds cause individual stock prices to fall, the lower prices will attract investors to buy those stocks.
Think of how many positions have to be sold when selling just one ETF.
It's a self-regulating process.
You never did explain how you arrived at your opinion that there is a liquidity problem in the U.S. now.
Could you please explain yourself? Thanks.
0
Posted on 12/7/18 at 12:30 pm to Hussss
quote:
Think of how many positions have to be sold when selling just one ETF
Maybe true in some of the leveraged loan ETFs, high yield bond ETFs and some other niche asset classes...
But SPY/VTI/etc... is loaded with very liquid names at the top of the cap spectrum.
The real risk in my opinion is a flash crash and you sell your ETF intraday at far less than NAV.
There always a macro scare out there... Yuan devaluation, China hard landing, oil collapse, Brexit, Grexit, etc...
It’s great to pay attention but don’t let the negatives totally blind you from the positives.
Posted on 12/7/18 at 12:43 pm to LSUcam7
Yeah I always look at both sides but the pattern of this topping process since Jan. doesn’t look too positive to me. Huge head and shoulders with this SPX 2600-2800 channel being the final shoulder before breaking down.
Best of luck
Best of luck
Posted on 12/7/18 at 1:15 pm to Hussss
Couldn’t psss up the sale on BAC today... took a nice position at 25.36
Posted on 12/7/18 at 1:47 pm to Hussss
quote:
My premise is that the market is breaking before our eyes. Passive ETF investing is going to be a major problem when most try to get out at once. Think of how many positions have to be sold when selling just one ETF. Algos will start pulling bids when we get a huge volatility spike and liquidity will completely dry up creating a vacuum effect. It has already happened in Feb. this year.
You mean when a market pullback set us back an entire 6 weeks?
This bull run will come to an end at some point, but the doom and gloom you’re trying to sell to cover your shorts isn’t being bought here
Posted on 12/7/18 at 1:57 pm to Thib-a-doe Tiger
Cognitive dissonance along with recency bias is a hell of a drug. People have been conditioned to buy dips with the Fed put being alive and well but the Fed put is gone.
Markets have gone up throughout history right along with debt (money) creation. The problem for the forseeable future, with demographics playing a huge part, is that a lot more money (debt) will be destroyed (paid off loans, mortgages, central bank liquidity withdrawn from the system) than will be created.
The entire system is based on trust and trust is rapidly eroding and markets are breaking. Wish I had better news.
Markets have gone up throughout history right along with debt (money) creation. The problem for the forseeable future, with demographics playing a huge part, is that a lot more money (debt) will be destroyed (paid off loans, mortgages, central bank liquidity withdrawn from the system) than will be created.
The entire system is based on trust and trust is rapidly eroding and markets are breaking. Wish I had better news.
This post was edited on 12/7/18 at 2:02 pm
Posted on 12/7/18 at 2:01 pm to Hussss
quote:
Passive ETF investing is going to be a major problem when most try to get out at once. Think of how many positions have to be sold when selling just one ETF
But that's not how ETFs work. They're sold to other investors on the secondary market. The only time the underlying assets are bought and sold is when the ETF is trading at a discount or premium to NAV, in which case authorized participants are presented with an arbitrage opportunity to bring the ETF back to NAV.
Posted on 12/7/18 at 2:12 pm to Hussss
quote:The "Fed put" as you call it is less than 10 years old. Are you saying the stock market never went up before then?
People have been conditioned to buy dips with the Fed put being alive and well but the Fed put is gone.
What do you believe is going to happen to the U.S. and world economies?
Are we going to see massive business failures and the economy never recovers? (Short of there being a massive global nuclear conflagration or viral epidemic, in which case owning or not owning stocks becomes moot.)
Are we going back to subsistence living? We only eat what we grow or kill ourselves?? What good would money do us in that case?
Or, is the world and our civilization going to continue to advance with new technology and more efficient processes?
I'm leaning towards the latter rather than the former.....
How about you?
This post was edited on 12/7/18 at 2:28 pm
Posted on 12/7/18 at 2:14 pm to Hussss
quote:ZeroHedge??? Because that sounds like ZeroHedge....
The entire system is based on trust and trust is rapidly eroding and markets are breaking.
Name one market that is "breaking."
Posted on 12/7/18 at 2:33 pm to LSURussian
Wall St. was gifted most of the money in the stock market by the wealthiest generation (Baby Boomers) ever. Best wealth transfer method ever invented. If you think for one second that Wall St. is going to just give them most of their money back when they are ready for it (most will need it around the same timeframe) then I guess Bernie Madoff will credit his clients back and make them whole as well. The ponzi is no different. Only thing different is the perceptions people have.
These stock markets aren't actual businesses but rather derivatives of businesses and are dependent on NEW money flows into the stocks. THIS (new flows) is the liquidity you were wondering about. Has ZERO to do with what the underlying businesses are doing.
These stock markets aren't actual businesses but rather derivatives of businesses and are dependent on NEW money flows into the stocks. THIS (new flows) is the liquidity you were wondering about. Has ZERO to do with what the underlying businesses are doing.
This post was edited on 12/7/18 at 2:38 pm
Posted on 12/7/18 at 2:37 pm to Hussss
Mises???
I hope you find peace and comfort.
I hope you find peace and comfort.
Posted on 12/7/18 at 2:39 pm to Hussss
quote:
If you think for one second that Wall St. is going to just give them most of their money back when they are ready for it then I guess Bernie Madoff will credit his clients back and make them whole as well. The ponzi is no different. Only thing different is the perceptions people have.
Yeah that’s kinda how brokerage accounts work. If I want some of my money, I place a trade and in t+2 I’m ballin out of control
Are you saying “Wall Street” is going to stop me from doing this?
Posted on 12/7/18 at 2:42 pm to Thib-a-doe Tiger
Of course not but digits on a screen are only CLAIMS. The "money" is not even there. There are way too many claims for actual money to be there.
But when trillions are leaving markets in the same timeframe we will have a big problem.
But when trillions are leaving markets in the same timeframe we will have a big problem.
This post was edited on 12/7/18 at 2:43 pm
Posted on 12/7/18 at 2:47 pm to Hussss
quote:
Of course not but digits on a screen are only CLAIMS. The "money" is not even there. There are way too many claims for actual money to be there.
You are aware that when you buy a stock, you’re buying it from a 3rd party, and not a broker or from the underlying company (most of the time), right?
quote:
But when trillions are leaving markets in the same timeframe we will have a big problem.
If stocks are trading at attractive prices, all because boomers are cashing out, you can bet your arse someone will be there to buy them
People with dry power are licking their chops at this scenario
Posted on 12/7/18 at 2:47 pm to Hussss
quote:Are you still referring to people owning and selling their stocks? If so, your sentence makes no sense at all.
but digits on a screen are only CLAIMS. The "money" is not even there. There are way too many claims for actual money to be there.
Stocks are not "claims" on a company, they are shares of ownership in a company. When someone sells his stock, the company does not pay him, the buyer of his shares pays him. And if the buyer doesn't have the money to buy the shares, the seller keeps his shares.
What is your meaning?
Posted on 12/7/18 at 2:50 pm to LSURussian
Pretty sure we’re being trolled, but I’m playing along just in case this is real life
Posted on 12/7/18 at 2:51 pm to Hussss
quote:
THIS (new flows) is the liquidity you were wondering about. Has ZERO to do with what the underlying businesses are doing.
Huh?
Earnings are earnings bro. At some point, they matter.
Posted on 12/7/18 at 2:53 pm to LSURussian
"Money" on the screen whether at a bank OR a brokerage is really not there.
Same with your mortgage. It was created out of thin air (all "money" is first created as debt) and is not even real until you start paying on it with your labor credits "money."
Same with your mortgage. It was created out of thin air (all "money" is first created as debt) and is not even real until you start paying on it with your labor credits "money."
Posted on 12/7/18 at 2:55 pm to Hussss
quote:
"Money" on the screen whether at a bank OR a brokerage is really not there. Same with your mortgage. It was created out of thin air (all "money" is first created as debt) and is not even real until you start paying on it with your labor credits "money."
This has taken an interesting turn.
A guy going long volatility doesn't believe in money either. I'm confused.
Posted on 12/7/18 at 2:55 pm to slackster
Earnings do NOT move stock prices. Money flows into the stock is what moves the price of the shares.
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