meiroy

It's a bear market. There could be some local bottom at some point but it's still a bear market.

Pardon if this was covered on another thread, but those of you who live in Europe or have families there, how will you cope with the coming energy crisis in winter?

The crackdown on the tech sector was at least partially justified. The short version is that some of these companies managed to grow extremely fast in scale and scope due to lack of regulation in a developing country. It got to the point where it could cause systemic risk or stifle the economy. The RE sector is far worse. Any adjustment will hurt. Regardless who's in charge.

Yeah, they are technically in the EU but without the currency and not part of the Schengen.

The "noise" as you call it always exists, it's always in the background, it fills local Chinese news. In that sense, nothing really changed. As far as China is concerned, Taiwan is 100% Chinese. You could flip it and say that they feel stronger, and that's why there's more external noise. I would definitely agree that deteriorating economic situation leads to a higher probability of war. With the global macro trajectory of the past decade this become more and more likely, going hand in hand with sovereign defaults. This doesn't apply only to China.

Croatia is going to join the EU, Albania might follow in a few years. Rental yields there are still far higher than western Europe. Anyone been looking to buy RE there?

yes yes yes let's get it over with so they can reopen the markets!

In 2009 and 2020 investors were saved by QE and the market has been pumped ever since. I've went all in in both occasions. Now, I can't see how we get QE in the near future. The Fed is backwards looking, so either they see inflation resolved a bit with a lag or something else goes horrible bad -- then QE. Other than that, could be some bear rally, probably in tech. Or, if Putin feels like it, crude goes to the moon.

Yeah, Canadian oil has some stupid numbers. I've been owning a lot since last year and they did great, but then recently it all went batshit crazy down. Numbers still good, though.

What is the political risk in Canada? (I have no idea). Justin Trudeau Says Canada May Expand Energy Support for Europe - Bloomberg "Canadian Prime Minister Justin Trudeau says his country is looking at expanding energy infrastructure to help Europe over the “medium term” to transition away from Russian oil and gas." That's a good political way out. Drill For Europe! Even in Europe there's a bit of a change these past couple of days. Once the energy crisis really punches them in the face and extreme political parties gain power they might even drop all the ESG crap.

oh man that sounds awesome!

Yeah, that's an interesting argument, that there's not going to be an actual recession because of current labor shortages. First, it should be clear that unemployment is a lagging indicator. Now, why is there labor shortage? One obvious reason is because of all that liquidity pumping for the past few years. Take that away + higher inflation + layoffs going on in waves and the shortage is resolved. I think it's extremely unlikely the Fed will manage a soft landing, even if my reasoning here is completely wrong.

Look at crack spreads which are a better indicator of demand -- upwards. There's SPR release going on which will eventually end as the reserves are being emptied. EIA crude inventories report are delayed to next week, for whichever reason, so it's not clear what's going on right now. There's some demand destruction in Europe (they so fucked) but in the USA? The only thing that can crash oil is Russia/Ukraine being resolved or of course some serious recession. If it's demand destruction via recession, how well would financials do? Google and friends? No place to hide.

Could be a beginning of a bear rally. Still a bear market, though, which means it will crash lower afterwards, unless the Fed pivots and then shitcoins go to the moon. Yes, lots of bargains to be found.

What matters is the Fed. If they are determined to squash Inflation, than we will continue this bear market with the occasional run up. Will most likely get a recession as well. In China there is a convergence of circumstances and we will soon see plenty of new policy and guidance to pump up that liquidity.

I switched to Tradingview.

Wabuffo, So you're saying the Fed's tightening into a slowdown will most likely not cause a recession? Personally, I think they can easy fuck this up. As far as models goes, who knows, just now from twitter: "Bullard praises the 1994 Fed tightening cycle, which scarred a generation of traders and central bankers. "Faster is better. The 94 tightening cycle is the best analogy here..." "*BULLARD SAYS HE BELIEVES THE FED CAN ACHIEVE A SOFT LANDING" Edit: I think you have provided a decent scenario and lots of details, it's reasonable. Might happen. Personally I'm long as always. The problem with such predictions is that they are very static. Is the Fed nimble enough? Have they shown good judgement in the past 5 years? Did they raise when they had the chance and should have? Now, all of a sudden they have the skills and will do the right thing? I doubt it.

Fed tightening into a slowdown can cause a recession. This is without considering any new externalities. Perhaps the war is over in 1-2 weeks. Perhaps Russia uses chemical weapons and then EU sanctions the energy sectors and things escalates. If Russia does take over Ukraine they will control a very large percentage of the global wheat production not to mention other commodities. It's not that simple. Various commodities are doing well because there was a demand > supply even before Putin's war started, it might crash for awhile but the trend will resume. Tech sector as a whole will run up only with a new QE, that is it's enough that the market perceives it will happen and there's sufficient liquidity. There can be rallies in a bear market.

In the long term, the big picture is that deglobalization continues, the USD becomes less central etc. Fragmentation. Shorter term, it depends on when the Fed starts QE again and continuation of trends such as reopening, commodities shortages etc.

A fantastic thread on what's going on in the futures markets:

A very interesting post, SD. Sadly I have to agree on the new world order. I own some small Cdn names that have risen like options play in the past year... Thanks for the warrants idea, needs a BAC-WT thread. IMHO the big risk here is some form of forfeiture. Or an exchange ignoring whatever you own, as we have seen recently.

Indeed, some margin increases on oil futures today.

OK my bad for asking that "question", this is all so intertwined with politics it's hard to filter it sometimes.

Well that's not an enjoyable drop. Regarding OPEC+, quite a few members can't even produce for current quota, UAE might have spare but why should other members agree? COVID reopening (umm, even though there's a new wave beginning) ESG obsession => less investments for years now etc. Thesis still stands. Even if Ukraine and Russia is resolved, the commodities macro remains. Uranium just melted the f up. So at least something went right. Until QE is back, I'd bet on short equity rallies and then lower lows but that's just for fun, what do I know. Is Manchin going to stand up to Warren? I'm wondering if I'm rationalizing it with this list.

I'm keeping an eye on it but there's so much uncertainty, who knows what they're exposed to. What's the hurry? GS is the king of commodities, at least while Blankfein was around and they indeed reduced their exposure but Lloyd is probably still around in spirit...