The Crash Chronicles

[Uncle Festivus]

Itchy, fat fingers last night?

Lovely, and predictable, Fiat Extinction Event happening in Crypto's, probably nothing.

But other bubbles are still gettin' goosed n juiced, even after a Dow 400 pt round trip, and the obligatory re-ramp back to unchanged, then the futures ramp on top. Just another BTFD moment?

Cooler & smarter heads can see the writing clearly.....

https://www.hussmanfunds.com/comment/observations/obs180115/

Priced in, baked in and ALL in!

 

[Uncle Festivus]

Who will pay for the bottom line subtractors - oil & interest rates?

Narrowing exit doors for the bubble bull brigades.....

LONDON, Jan 16 (Reuters) - Hedge funds and other money managers have boosted their bullish position in oil to a new record, but with crude taking over from fuels as the main target of fresh buying.

Hedge funds boosted their net long position in the six most important futures and options contracts linked to crude and fuels by 67 million barrels to a record 1,399 million barrels in the week to Jan. 9.

Portfolio managers have increased their net long position in Brent, NYMEX and ICE WTI, U.S. gasoline, U.S. heating oil and European gasoil by a total of 1,089 million barrels since the end of June.

The accumulation of bullish positions is easily the largest on record and far outstrips anything seen even during the spike in oil prices during late 2007 and the first half of 2008 (tmsnrt.rs/2D8l6V7).

In the last six months, funds have added 374 million barrels of net long positions in Brent, 344 million in WTI, 112 million in gasoline, 128 million in heating oil and 131 million barrels in gasoil.

The scale of the buying has left positions looking very stretched on many measures and prices vulnerable to a correction if fund managers try to realise some of their paper profits.

Hedge funds now hold more than 10 long positions in crude and fuels for every short position, up from a ratio of less than 1.60:1 at the end of June.

If fund managers try to sell some of those positions, they may have difficulty finding buyers, which could cause a sharp downward move in prices (“Why stock markets crash”, Sornette, 2003).

In the past, large concentrations of hedge fund positions, either long or short, have normally preceded a reversal in the price trend (“Predatory trading and crowded exits”, Clunie, 2010).

In the current case, however, portfolio managers seem to be gambling oil prices will break up into a new, higher trading range before eventually correcting.

The global economy is growing strongly and world trade volumes are increasing at the fastest rate since the start of the decade.

Oil consumption is increasing strongly while OPEC and its allies continue to restrict production to draw down inventories.

U.S. shale production is set to increase strongly in 2018 as a result of the increase in prices, but the impact will most likely be felt later in the year, and that has not daunted most of the oil bulls.

Few fund managers are willing to bet against the rising trend in prices - yet.

Hedge fund short positions in NYMEX WTI have fallen to 35 million barrels, the lowest level since July 2014, when oil prices started slumping.

Across the petroleum complex as a whole, fund managers hold just 154 million barrels of short positions, close to multi-year lows, compared with a record 1,552 million barrels of long positions.

But the lack of any bearish short-sellers for either crude or fuels suggests a one-way market has developed - which is normally a harbinger of an upsurge in volatility and a correction ahead.

http://tmsnrt.rs/2D8l6V7

I think Boeings' products use this stuff too, but doesn't seem to affect the share price at all, yet?
5% per day is completely sustainable....

 

[Uncle Festivus]

Oh dear, somebody is looking at the hard data.......is the tide going out? Ex the oil spike, deteriorating fundamentals, but tax cut's continue to get priced in even though fully priced in.

https://www.marketwatch.com/story/w...flow-growth-is-bad-news-for-stocks-2018-01-22

 

[Value Collector]

Are you ready for reality?

Nuff said.

View attachment 85513

What do you think Boeing is worth?

 

[Value Collector]

What do you think Boeing is worth?

Because Boeing has been delivering a knockout punch with its 787 and 737, they have a super strong order book, and look like the clear winner for the next 10 years or so.

 

[Uncle Festivus]

Dot.com 2.0 or Investing 101 2018 edition - make sure your backers have deep pockets? What's $4B a year among mates?

The Tesla, Uber business model, but the chart looks a lot like a few 'traditional' companies going vertical?

 

[Uncle Festivus]

Because Boeing has been delivering a knockout punch with its 787 and 737, they have a super strong order book, and look like the clear winner for the next 10 years or so.

No lift under the wings in recessions, which would mean 20 years of no recessions?

 

[Value Collector]

No lift under the wings in recessions, which would mean 20 years of no recessions?

What do you mean by that ?

 

[Uncle Festivus]

What do you mean by that ?

2 things - currently 10 years since the last recession, so they are pricing another 10 years of no recession to get their money back at current prices, plus any hint of recession the order books of airlines go into free fall, and orders evaporate, literally overnight. Like many other stocks in this melt up, they are priced for not only perfection but absolutely no negatives like rising rates and recessions.

Start of the trade wars and 'he who has the weakest currency wins' wars. This is a lose/lose for everybody.

You can't 'wish' for a weaker currency when you are the owner of the world's currency - the Fed is finally getting the inflation it deserves....

 

[Value Collector]

2 things - currently 10 years since the last recession, so they are pricing another 10 years of no recession to get their money back at current prices, ..

I don't think they are priced on investors getting their money back in 10 years, they are priced on the belief that Boeing will survive through a recession, and be profitable before and after, and any recession would be a minor glitch in the next 20 years of reporting.

you have been calling a recession for years now, and eventually we will get one, but just like the GFC its not the end of the world, wheels keep turning and dividends keep coming in.

 

[Value Collector]

plus any hint of recession the order books of airlines go into free fall, and orders evaporate, literally overnight. Like many other stocks in this melt up, they are priced for not only perfection but absolutely no negatives like rising rates and recessions.

.

Also, I just wanted to point out that Boeing has paid a dividends every year since 1942.

Though out all the wars and recessions it has never missed a dividend.

 

[Uncle Festivus]

I don't think they are priced on investors getting their money back in 10 years, they are priced on the belief that Boeing will survive through a recession, and be profitable before and after, and any recession would be a minor glitch in the next 20 years of reporting.

you have been calling a recession for years now, and eventually we will get one, but just like the GFC its not the end of the world, wheels keep turning and dividends keep coming in.

Actually the GFC was the end of the financial world as it was. It's taken trillions in more debt by public and private entities to keep the Ponzi going, until this week.
You can't un ring the leveraged debt bust bell now that it's been rung.
The wheels can and will stop when the final implosion happens. Btw, any company that pays divs from debt instead of fcf is a dud and will eventually fail.
The fallout from the bubble pop is just beginning.

 

[notting]

Just imagine how excited Ralph must be now!!
Buy the way those food fights are absolutely awesome to be involved in.
Breakfast ones are the best. The air is just full of toast! So funny.

 

[Value Collector]

Actually the GFC was the end of the financial world as it was. It's taken trillions in more debt by public and private entities to keep the Ponzi going, until this week.
You can't un ring the leveraged debt bust bell now that it's been rung.
The wheels can and will stop when the final implosion happens. Btw, any company that pays divs from debt instead of fcf is a dud and will eventually fail.
The fallout from the bubble pop is just beginning.

Let me know when Boeing cancels it’s dividends, until then I will assume I am correct and the world hasn’t ended

 

[Uncle Festivus]

Let me know when Boeing cancels it’s dividends, until then I will assume I am correct and the world hasn’t ended

It's quite simple - it will keep going while ever there is faith in the Ponzi. The fed has again folded and put back liquidity this week, hence the bubble reflation.
While ever the USD keeps going lower and ust10 keeps going higher then at some stage real soon the real correction will start. The final stage of the GFC.
The markets are completely broken now, there's just algos, bots and corp buybackers in there - the swings just take out retail stops immediately.
Keep believing in sunshine and lollipops and the sheepels and muppets will get burned again, just like when the GFC started.

 

[Value Collector]

It's quite simple - it will keep going while ever there is faith in the Ponzi. The fed has again folded and put back liquidity this week, hence the bubble reflation.
While ever the USD keeps going lower and ust10 keeps going higher then at some stage real soon the real correction will start. The final stage of the GFC.
The markets are completely broken now, there's just algos, bots and corp buybackers in there - the swings just take out retail stops immediately.
Keep believing in sunshine and lollipops and the sheepels and muppets will get burned again, just like when the GFC started.

“The markets are completely broken” ????

You are living in fantasy land man, look around, every where you look products and services are being produced, delivered and consumed.

And the the companies producing and delivering them are booking profits and paying dividends.

Sure the levels of business activity will fluctuate and the prices the companies trade at will fluctuate, but the a mixed portfolio of solid companies will perform well over time, and if you aren’t on board you will miss out.

 

[explod]

Spot on Uncle but you cannot help the blinkered. Empty shops here everywhere at Frankston. Brother-in-law very unhappy with his house purchase $500,000 just south west of Geelong in 2010, wants to shift but best offer $280,000. Units in Perth dropped in half in just 18 months. Increasingly you can buy a coffee for $1.00

Yep great

 

[luutzu]

Spot on Uncle but you cannot help the blinkered. Empty shops here everywhere at Frankston. Brother-in-law very unhappy with his house purchase $500,000 just south west of Geelong in 2010, wants to shift but best offer $280,000. Units in Perth dropped in half in just 18 months. Increasingly you can buy a coffee for $1.00

Yep great

A $500K house is now unheard of in Sydney. And that's your typical fibro/clad/brick veneer 3 bedders over some 40 years old.

The typical price around where I live now sells for about $2K per m2. It's higher if the house doesn't need a bulldozer or some $100K in reno just to make it safe to live in. So a typical house on a 600m2 lot goes for $1.3m to $1.5m...

The stats don't show that people are getting a whole lot richer, so it just doesn't make sense.

News report are saying that houses in Sydney are "cooling", dropping... I just don't see it. I mean I do see it not going higher but staying still is not exactly dropping.

And coffee still cost over $5. Well, unless you go to IKEA and get one with a danish for $2.50. I'm still trying to figure out whether their drinks come with free refill or not... it should as it's in the open. The rasberry soda is pretty dam good. Don't know about that $1 hotdog though.

 

[brty]

Explod,
"Brother-in-law very unhappy with his house purchase $500,000 just south west of Geelong in 2010, wants to shift but best offer $280,000."

If something is JUST south west of Geelong, and cost $500k in 2010, I'd almost be prepared to offer $300k cash, sight unseen today. If you can point me to the REA ad I would take a keen look!!

I know the area very well and already have investments there. I can tell you places near Geelong have doubled in price since 2010, so has Winchelsea, pretty much to the west of Geelong. Anything Torquay way has doubled to tripled since 2010, it is South of Geelong.

If you are talking Portland, then it should not be in the same breath as property in or near Geelong. It is the only place in Southern Victoria I can think of that has had significant price reductions, due entirely to the uneconomic smelter and rising electricity prices, a unique situation.

 

[Uncle Festivus]

“The markets are completely broken” ????

You are living in fantasy land man, look around, every where you look products and services are being produced, delivered and consumed.

And the the companies producing and delivering them are booking profits and paying dividends.

Sure the levels of business activity will fluctuate and the prices the companies trade at will fluctuate, but the a mixed portfolio of solid companies will perform well over time, and if you aren’t on board you will miss out.

Yes, it is fantasy land. So the Dow has intraday swings of 600 points = normal? Intraminute swings of 100 points = normal?

Do you know what the 'debt to equity' ratio's are for all these booming companies? How about the P/E's, especially considering that the E part has been fudged by buybacks bought with debt? Or the $67TRILLION of public & private debt in the US - how much would another 1% of 'normalised' interest be on that debt?

The Fed has already lost control of the cost of debt, the market is pricing in how much it is going to cost the government when trying to pay for tax cuts and infrastructure spending that they can't afford?

Pension funds would get wiped out with a sustained market fall over 10%, hence the PPT cabal reflation attempt.

UST10Y almost at 3% now - I give it till April, being generous, for the 1Q GDP figures to fully show the impact of a zero bound savings rate.