Australian (ASX) Stock Market Forum

The official "ASX is tanking!" panic thread

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ducati916 said:
And why is debt an issue?

From a 'trading' perspective only...I will ignore the economic issues.

Because the level of debt is a leveraged number on the base money supply, M2, which means in an unravel, there is not enough cash to settle the debt.

This would be bad, but it is compounded by the leveraging of that debt by derivatives. $1.4Quadrillion. Most of which is in the form of SWAPS. These are not traded on any exchange and therefore have no margin attached to them and are totally opaque. This magnifies the issues as counter-parties cannot quickly or easily be identified, exacerbating a credit event.

Again, the issue is now an appalling lack of dollars to settle in cash, losing bets.

Why do you think the USD is near highs? There is a tremendous demand for dollars to settle losing bets currently.

This leads directly to a liquidity event.

When the liquidity event hits...the Fed and other Central Banks are (i) behind the curve again and (ii) will require an even larger amount of liquidity to be created in an attempt to stem the bleeding out of market players.

So large in fact that the USD runs a true risk of hyper-inflating to destruction. The liquidity event I believe will be triggered in the Euro. The ECB cannot recapitalise its Balance Sheet in the same was as the Fed and BoJ. As such, a credit event in any one of a number of basket case economies can create that liquidity event which will spread faster than covid across all bourses.

Central banks (Fed) cannot raise the FFR to levels necessary to combat inflation. The FFR would need to be 10%. Currently it is 0.5%

The US markets will bottom out somewhere between 80% and 90% loss. The choice is now a death spiral deflation or a hyper-inflation. Both have less than desirable outcomes.

View attachment 141849

jog on
duc
Click to expand...
Exactly. This is what the average Prole doesn't understand about their stock market investments.

They keep looking at equity fundamentals, scratch their heads and wonder what the hell is happening. Whereas they really should be learning about the debt market and keeping a close eye on that.

I'm certainly no expert, but know enough to listen to who I think are the right folks in that regard.

Out there mixing it with plebeians, almost nobody (and remember most of my clients are well heeled) has a clue what a bond is, nevermind the size of that market or how it affects everything.

When that blows up, people will be shocked to their core.

images.jpeg
 
ducati916 said:
And why is debt an issue?

From a 'trading' perspective only...I will ignore the economic issues.

Because the level of debt is a leveraged number on the base money supply, M2, which means in an unravel, there is not enough cash to settle the debt.

This would be bad, but it is compounded by the leveraging of that debt by derivatives. $1.4Quadrillion. Most of which is in the form of SWAPS. These are not traded on any exchange and therefore have no margin attached to them and are totally opaque. This magnifies the issues as counter-parties cannot quickly or easily be identified, exacerbating a credit event.

Again, the issue is now an appalling lack of dollars to settle in cash, losing bets.

Why do you think the USD is near highs? There is a tremendous demand for dollars to settle losing bets currently.

This leads directly to a liquidity event.

When the liquidity event hits...the Fed and other Central Banks are (i) behind the curve again and (ii) will require an even larger amount of liquidity to be created in an attempt to stem the bleeding out of market players.

So large in fact that the USD runs a true risk of hyper-inflating to destruction. The liquidity event I believe will be triggered in the Euro. The ECB cannot recapitalise its Balance Sheet in the same was as the Fed and BoJ. As such, a credit event in any one of a number of basket case economies can create that liquidity event which will spread faster than covid across all bourses.

Central banks (Fed) cannot raise the FFR to levels necessary to combat inflation. The FFR would need to be 10%. Currently it is 0.5%

The US markets will bottom out somewhere between 80% and 90% loss. The choice is now a death spiral deflation or a hyper-inflation. Both have less than desirable outcomes.

View attachment 141849

jog on
duc
Click to expand...
The implications of either of the outcomes you mentioned would mean complete collapse of modern society.
I doubt that this would ever be allowed to willingly happen.
What will probably happen is another can-kicking venture.
 
waterbottle said:
The implications of either of the outcomes you mentioned would mean complete collapse of modern society.
I doubt that this would ever be allowed to willingly happen.
What will probably happen is another can-kicking venture.
Click to expand...
sorry i disagree , it seems ALL options are on the table no matter how irrational they seem

once trust is gone , so is the currency and the economy
 
divs4ever said:
sorry i disagree , it seems ALL options are on the table no matter how irrational they seem

once trust is gone , so is the currency and the economy
Click to expand...

If the economy is gone then so is society and that is what you should be betting on. No point posting on an investment forum, start hoarding cans of food and shotgun shells.
If there is no economy, then there are no goods and services. There is no incentive to produce. Allowing such a thing to happen would obviously harm many more people globally than whatever 'fault' is trying to be corrected. IMO, it will never get to that stage, and if it does, who cares because money would be meaningless anyway.
The stimulus and behind-the-door dealings aka bear sterns sold on a sunday, during the GFC were unprecedented because we were staring down the barrel of complete financial collapse. Obama sucked it up and put it on the taxpayer docket realising that allowing such a system to fail would have broader implications than increasing US debt.
 
waterbottle said:
If the economy is gone then so is society and that is what you should be betting on. No point posting on an investment forum, start hoarding cans of food and shotgun shells.
If there is no economy, then there are no goods and services.
Click to expand...
your money is guaranteed to erode in a term deposit

TINA ( There Is No Alternative ) from income gains ( and possible capital gains )

if it all implodes it doesn't matter EVERYBODY will be equally poor soon enough ( thieves and looters will make sure of that )

look at Sri Lanka , even the army can't protect politicians houses and cars
 
Looking at the XJO it hasn't done a lot since gapping up at the Open. ROC and ADX still indicating Sell ( thank you @Skate ), but this could mean it'll recover abit after the Aus Employment figures come out.
Considering loading up again. Maybe I need a slap.
 
AUD
Employment Change (Apr)

Act: 4.0K Cons: 30.0K Prev.: 17.9K

AUD
Full Employment Change (Apr)

Act: 92.4K Cons: Prev.: 20.5K

AUD
Participation Rate (Apr)

Act: 66.3% Cons: 66.4% Prev.: 66.4%

AUD
Unemployment Rate (Apr)

Act: 3.9% Cons: 3.9% Prev.: 4.0%

Hmm. Not a lot there I assume.
 
Mohammed Hazabig'un said:
AUD
Employment Change (Apr)

Act: 4.0K Cons: 30.0K Prev.: 17.9K

AUD
Full Employment Change (Apr)

Act: 92.4K Cons: Prev.: 20.5K

AUD
Participation Rate (Apr)

Act: 66.3% Cons: 66.4% Prev.: 66.4%

AUD
Unemployment Rate (Apr)

Act: 3.9% Cons: 3.9% Prev.: 4.0%

Hmm. Not a lot there I assume.
Click to expand...

Peaking?
Anyone have stat's on immigration?
 
waterbottle said:
The implications of either of the outcomes you mentioned would mean complete collapse of modern society.
I doubt that this would ever be allowed to willingly happen.
What will probably happen is another can-kicking venture.
Click to expand...

The total collapse of society will not happen, but it will come pretty close...for the following reasons.

The level of derivatives to the debt, leveraged to the base money supply is now many magnitudes higher than the 2008 crisis and the 2020 crisis.

The 2 bailouts totalled some +/- $9T on just the Fed's Balance Sheet. Add in the Boj, ECB, PBOC and all the tinpots to get an estimate of multiplying that by a factor of 'X' if the world's debt went into a death spiral (deflation), which it currently is.

So to 'bail out' the system the CBs would need to go to....lets use the Fed alone, some $30T+
We already have inflation measured by a somewhat suspect CPI at 8.5%
Add another bailout and there is a very good chance that the USD will hyper-inflate. If USD dies, all other fiats die alongside.

Only at this point, to retain power, will governments and international institutions, try to save the USD and by extension fiat.

The USD would likely be bailed out by the IMF and SDRs. If that worked (the SDR is simply another fiat) then we stabilise. If it fails then the only way forward is to back the USD with gold. All central banks hold gold in varying quantities.

The revaluation of all fiats to gold would probably require $50Koz gold +/-. In that process silver will also revalue as a monetary metal (poor man's gold) rather than as an industrial commodity. We'll likely see a ratio of 10:1 at some point.

The pain until we got to that point would be immense. It would be the 1930's or worse again.

Stocks with hard assets on the balance sheet, land factories, inventories (that were demanded) etc would survive. Stuff with balance sheets measured in 'eyeballs' or whatever will simply go to zero. A number of US stocks are already down 80% from their highs. It will spread to far more before this disaster is over.

The crypto crowd argue that BTC et al will mimic or outperform gold. To date, that is not the case. It may change.

jog on
duc
 
eskys said:
Premarket is now green
Click to expand...
Tonight the U.S. initial Jobless numbers are out. Tomorrow the existing Home Sales (US) and Leading Index. Those shouldn't be good I assume, particularly for Yanks still shell shocked from the Sub prime disaster. Add to that Poms fighting over Food shortages (sadly) and Im confident Red is the colour of choice.
 
ducati916 said:
The total collapse of society will not happen, but it will come pretty close...for the following reasons.

The level of derivatives to the debt, leveraged to the base money supply is now many magnitudes higher than the 2008 crisis and the 2020 crisis.

The 2 bailouts totalled some +/- $9T on just the Fed's Balance Sheet. Add in the Boj, ECB, PBOC and all the tinpots to get an estimate of multiplying that by a factor of 'X' if the world's debt went into a death spiral (deflation), which it currently is.

So to 'bail out' the system the CBs would need to go to....lets use the Fed alone, some $30T+
We already have inflation measured by a somewhat suspect CPI at 8.5%
Add another bailout and there is a very good chance that the USD will hyper-inflate. If USD dies, all other fiats die alongside.

Only at this point, to retain power, will governments and international institutions, try to save the USD and by extension fiat.

The USD would likely be bailed out by the IMF and SDRs. If that worked (the SDR is simply another fiat) then we stabilise. If it fails then the only way forward is to back the USD with gold. All central banks hold gold in varying quantities.

The revaluation of all fiats to gold would probably require $50Koz gold +/-. In that process silver will also revalue as a monetary metal (poor man's gold) rather than as an industrial commodity. We'll likely see a ratio of 10:1 at some point.

The pain until we got to that point would be immense. It would be the 1930's or worse again.

Stocks with hard assets on the balance sheet, land factories, inventories (that were demanded) etc would survive. Stuff with balance sheets measured in 'eyeballs' or whatever will simply go to zero. A number of US stocks are already down 80% from their highs. It will spread to far more before this disaster is over.

The crypto crowd argue that BTC et al will mimic or outperform gold. To date, that is not the case. It may change.

jog on
duc
Click to expand...
Mohammed Hazabig'un said:
Tonight the U.S. initial Jobless numbers are out. Tomorrow the existing Home Sales (US) and Leading Index. Those shouldn't be good I assume, particularly for Yanks still shell shocked from the Sub prime disaster. Add to that Poms fighting over Food shortages (sadly) and Im confident Red is the colour of choice.
Click to expand...
While what you all say is probably correct in each metric individually, one cannot extrapolate that to the market.

You forget one important facet of market behaviour which is to quote that great legal mind, Dennis Denuto,...

The Vibe.

I've been through a number of crashes and there was no obvious warning, and that was before the Governments and Central Banks had the safety of the markets in mind as well as inflation, debt and all the aforementioned. Mainly because of Super and Pension funds being the major investors in the market.

I may be wrong.

Then again, I may be correct, but there are too many balls in the air at the moment to decide on the mood which ultimately decides market direction.

gg
 
Mohammed Hazabig'un said:
Tonight the U.S. initial Jobless numbers are out. Tomorrow the existing Home Sales (US) and Leading Index. Those shouldn't be good I assume, particularly for Yanks still shell shocked from the Sub prime disaster. Add to that Poms fighting over Food shortages (sadly) and Im confident Red is the colour of choice.
Click to expand...
You're probably right.......I like seeing green on this screen, but looks faint
 
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