12 months is almost up

[Austwide]

23rd March the XAO reached it low point in the last correction.

Many stocks have had massive gains since if anyone brought in the lows.

If sitting on a large capital gain and wanting to take the cash, the 12 month CGT tax discount of 50% comes into effect for some starting from the 23rd March.
I believe the USA pay !5% CGT if held for 12 months. Could there be a big sell off?

I haven't looked at past corrections to see if this has any impact on the markets, but given the talk of a looming correction I think we need to watch our stocks closely after the 23rd in particular for a while.

This is based on no history so DYOR.

 

[qldfrog]

An interesting point, but i believe many would have entered later , this will nevertheless maybe have a damping effect from now on for the next 3 months until EOFY

 

[greggles]

I think we're heading for a fall. The end of JobKeeper and the inevitable rise in unemployment is going to keep a lid on economic growth. The bull market of the last 12 months has run too far on economic smoke and mirrors engineered by those in power and funded by freshly printed cash the government has pumped into the economy.

Now it all ends, and reality is going to finally kick in.

 

[tech/a]

What’s changed to cause a fall
Economies booming
record low interest rates
zero inflation

So why is there about to be a crash?

 

[greggles]

What’s changed to cause a fall
Economies booming
record low interest rates
zero inflation

So why is there about to be a crash?

Not saying there's going to be a crash, but I think we are headed for a bear market. We haven't felt it yet, but the end of Jobkeeper will mean higher unemployment. Add to that negative business investment growth and stagnant wages growth and I think that we are a little too over-optimistic about the economy in the short term.

Low interest rates and rising residential real estate prices creates an illusion of wealth in the same way that an equities market bubble does (e.g. 2000 & 2008). But I don't think that accurately reflects the real state of the economy, which is still far from healthy.

 

[Dona Ferentes]

The recent Jarrad Dillian mailout (The 10th Man) had an interesting take on the current market, especially referencing Archegos. Rearranging his thoughts:

Subprime Brokerage

..... A lot of people think that bull markets end on valuation.

Bull markets do not end on valuation. Bull markets end when one large, leveraged player gets taken out of the market. We call this person the marginal buyer.

In this case, I would say the large, leveraged player is Softbank. But Archegos was quite large and was also mimicking many of Softbank’s trades.....

....
[A week ago] a dozen or so huge block trades in individual stocks hit the market. That hedge fund, Archegos Capital Management, had accumulated very large positions in individual stocks via swap.

The fund sustained losses… the margin was swallowed up… and, in order to prevent further losses, the prime brokers (PBs) liquidated the positions via a series of block trades. A handful of banks sustained billions in losses......

..... What [it] really comes down to is the credit and risk decisions that were being made within the prime brokers.

A prime broker is essentially an internal clearinghouse at a bank, and one of the main functions of a prime broker is extending margin.

Allowing a single hedge fund to accumulate positions in the billions on swap seems… unwise. Especially since funds can have more than one prime broker, and you don’t know what kind of trades they’re putting on somewhere else.....

........It’s kind of interesting that Archegos took a digger with the stock market near all-time highs.

Usually these types of risks are exposed at the bottom of the market, not the top. And it makes you wonder what other types of risks are lurking out there in hedge fund land.

A lot of smart people I talk to are confident that there is never one cockroach. I disagree.

I assure you that, this past Monday morning, PBs were hard at work raising margin requirements on all their (other) existing swap positions.

Remember, the market is self-correcting. The best time to fly on an airplane is after a major crash.....

..... I don’t have at my command the memory of the last time a major prime brokerage client blew up. The last time we were talking about prime brokers, in 2008, it was the prime brokers that were blowing up......

...... everyone is focused on the risk management at the PBs and the drama surrounding the block trades. The bigger picture is that this large, leveraged hedge fund could be the canary in the coal mine....

....
Typically when something goes kablooey on Wall Street, people turn to each other and ask, “Who’s next?” I can tell you that if the Softbank portfolio has to be unwound, it is going to be messy. And that is an understatement.

I have been working in the business since 1999, and yet I still continue to see new things all the time. If banks were willing to extend Archegos that kind of leverage, it is safe to assume they extended similar amounts of leverage to other clients. Their challenge now is to de-risk without causing any further accidents.


..x...x...x....x.xxx....x.x.x.x.x..x
- and , just as a reminder... the name of SoftBank comes up too frequently:

May 2019..... That was around the time Japan’s Softbank started pumping hundreds of millions of dollars into [the] global supply chain finance venture, Greensill Capital.

Greensill Capital has now collapsed ...

 

[bsnews]

COVID has produced some winners and losers. But overall only specific industries have had a real bad time and with Jobkeeper ending (Plus Jobseeker increased) it will be time to see if they survive or close the doors. I bet Jerry Harvey loves COVID.

Lots more have benefited from COVID and not just businesses and this is still ongoing, their is no way with the amount of money already pumped into the economy and an election on the horizon that this money will cease anytime soon. You either buy the markets or buy housing no where else to go. and ATM it's buy housing if we listed housing like we do the stocks your mind set would change towards housing.

As for unemployment going through the roof, try and employ someone ATM and see how you go. (Jobseeker)

Banks want you to take their money and are charging you nothing to do it.

Well as you can see I don't see a crash any time soon.

 

[Dark1975]

What’s changed to cause a fall
Economies booming
record low interest rates
zero inflation

So why is there about to be a crash?

Economies booming ??
Record low interest rates would indicate otherwise ?

 

[tech/a]

Economies booming ??
Record low interest rates would indicate otherwise ?

Just about every index I look at world wide including here is at or very near to all time highs.

Recird low interest rates which don’t look like moving appreciably for quite a few years indicate to me that growth is likely to continue.

I’m not seeing inflation , large rises in AUD or massive falls in USD
Not a PIG in site!

 

[Smurf1976]

Economies booming ??

Purely anecdotal but my observation is that many things have gone to one extreme or the other.

Building trades and material suppliers, commodities, home furnishings and stuff like that is outright booming to the point that reports of physical shortages are emerging, things which simply aren't available at any price.

Tourism, live music / theatre and universities seem to be pretty much stuffed.

Part of the problem with the latter isn't just the actual COVID situation but the threat of ongoing outbreaks and so on. It's a substantial commitment for most families to undertake significant travel even domestically. Likewise it's a serious $ commitment to organise a major concert tour especially if the artist(s) are from overseas. In both cases the cost of cancellation, and knowing that there's a fair chance of that happening, makes the whole thing just far too risky for most.

Economic reality as experienced by any individual or business is going to differ hugely depending on what industry they're part of.

 

[Dark1975]

Just about every index I look at world wide including here is at or very near to all time highs.

Recird low interest rates which don’t look like moving appreciably for quite a few years indicate to me that growth is likely to continue.

I’m not seeing inflation , large rises in AUD or massive falls in USD
Not a PIG in site!

Just about every index has recovered due to the printing of endless money or the Fed /Imf stepping in
Tho this will all come to a stop soon,
And as I state leaving interest rates at all time lows, Would suggest there's really something not quite right with consumer confidence?
Is GdP higher pre covid ? On any index ?
I think not ?

Unless you are correlating the S & p to record highs * which the top 6 have a market cap of 40% lol.
Tho im sure the the rest of the 494 companies indexed of the S & P aint doing that well,

 

[Dark1975]

Purely anecdotal but my observation is that many things have gone to one extreme or the other.

Building trades and material suppliers, commodities, home furnishings and stuff like that is outright booming to the point that reports of physical shortages are emerging, things which simply aren't available at any price.

Tourism, live music / theatre and universities seem to be pretty much stuffed.

Part of the problem with the latter isn't just the actual COVID situation but the threat of ongoing outbreaks and so on. It's a substantial commitment for most families to undertake significant travel even domestically. Likewise it's a serious $ commitment to organise a major concert tour especially if the artist(s) are from overseas. In both cases the cost of cancellation, and knowing that there's a fair chance of that happening, makes the whole thing just far too risky for most.

Economic reality as experienced by any individual or business is going to differ hugely depending on what industry they're part of.

I Agree that certain markets are going well like construction- tho hand in hand to low interest rates
Tho the Australian economy looks like it might do ok ?
Tho as the old war cry goes " When America sneezes the world catches a cold"
My reference is that my concern isn't Australia, im concerned on the U.s / Europe
When you look to finance / investing / futures / currencies i only look for incoming info from u.s / Europe

 

[Dona Ferentes]

Economies booming
record low interest rates
zero inflation

So why is there about to be a crash?

three out of four ain't bad

 

[greggles]

Australian shares ‘overvalued’, analysts say, as local bourse keeps surging higher

Looks like this ASX bull run still has legs. I'm curious about how long it is going to last. The property market and the equities market are both on fire at the moment. Cheap money does strange things to people.