I am currently sifting through the mountain of information on investing in shares/funds/commodities etc and was wondering how a recession in the US if it occurs would effect some of Australia's leeading company values ie CBA and the likes. Also if it does adversly effect these companies to diversify and limit risk of loss in the face of a slide what are the better investment options, Gold? Thanks for entertaining the Q's of an ignorant!
I didn' t think there was any shutdowns? I thought Trump just let it run rampant?U.S. Economy Contracted 5% in First Quarter, Slightly Steeper Than Initial Estimate -- Update
https://uk.advfn.com/stock-market/s...s-economy-contracted-5-in-first-quarter-sligh
WASHINGTON -- The U.S. economy's first-quarter contraction was slightly steeper than initially estimated, and a key measure of corporate profits weakened as coronavirus-related shutdowns began to come into effect.
This situation looks to be hoping for the best and touting it whilst ignoring the worse situations. Many companies will go to the wall though like the 'Industrial Revolution' in the UK and Europe between 1820 and 1840 a lot of people will end up jobless.I didn' t think there was any shutdowns? I thought Trump just let it run rampant?
So is this imminent?This situation looks to be hoping for the best and touting it whilst ignoring the worse situations. Many companies will go to the wall though like the 'Industrial Revolution' in the UK and Europe between 1820 and 1840 a lot of people will end up jobless.
Those who are in the know are buying precious metals and bitcoin to put off the fateful day. The stock market recovery is the same as in 1929-1930 when major markets recovered 48% before crashing to be down 90% at the floor during 1932.
Australia - Watch for a Rally - Then Jump Ship
https://www.tradingview.com/chart/XAO/Riz7XLyH-Australia-Watch-for-a-Rally-Then-Jump-Ship/
Though the market did not fully recover in 1930, it did go through a series of rallies and drops as it tried to mount a revival. New York Stock Exchange stocks recovered 73 percent of their losses in 1930. Each rally was met by a disappointing drop, but the market never went back to its 1929 state of chaos and panic.So is this imminent?
Or just speculation?
Are we talking weeks, months, or years, before the collapse?
Watch the debt market, bonds. This is where everything is going to blow the @#$& up.I guess the video touches on quite a few conspiracy theories, but true or not, it is starting to feel a bit like the GFC all over again.
Too much credit (Edit: Or should I say debt) and easy money.
Time will tell how it pans out, but I am getting the feeling its not going to be good.
While it’s true that as interest rates rise, longer dated bonds with lower interest rates will have their price drop. Bond holders with longer term outlooks will be spared from any carnage simply by the fact that if they hold their bonds until maturity they will get the face value of the bond back.Watch the debt market, bonds. This is where everything is going to blow the @#$& up.
This time it's going to be epic, absolutely biblical in proportion. Everything is a derivative of the bond market... Real estate, stocks, everything.
In a normal cycle that may be true, but these are different times and your thesis above highlights the problem "total return". Peruse any of the bond total return indices or funds reveals a bond market making losses. Chuck in inflation and real returns into the equation... and indeed other structural anomalies and you have a bond market at the precipice of the abyss.While it’s true that as interest rates rise, longer dated bonds with lower interest rates will have their price drop. Bond holders with longer term outlooks will be spared from any carnage simply by the fact that if they hold their bonds until maturity they will get the face value of the bond back.
So the shorter dated bonds aren’t really at risk of big capital losses, because the bond fund or insurance company or who ever owns it can just be hold until maturity and feel confident of getting the face value back, while the longer term bonds will see some capital losses as interest rates rise, however these losses will evaporate as time passes and they get closer to maturity.
Over all the bond owners will probably be happy that interest rates are rising, because even though initially they will see some unrealised paper losses across their portfolio of bonds, actual income will rise as the capital is recycled into new bonds with higher interest rates, and the paper losses will disappear as the older lower interest bonds move closer to maturity.
The large insurance companies, pension funds, endowment funds etc etc aren’t buying bonds to make large returns, mostly it’s just a way of having some capital stability for funds that they need to pay out over the next 5 years or so, and most of them would be planning on holding the bonds till maturity and would be holding bonds across a wide range of maturities.In a normal cycle that may be true, but these are different times and your thesis above highlights the problem "total return". Peruse any of the bond total return indices or funds reveals a bond market making losses. Chuck in inflation and real returns into the equation... and indeed other structural anomalies and you have a bond market at the precipice of the abyss.
There's plenty of macro analysis out there from credible sources (Jim Bianco for eg) which details the possibilities, so DYOR there.
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People attempting to trade in and out of the bond market can offcourse get hurt, but the long term holder can only be hurt if the bonds are defaultedTime will tell VC. This is the thing, there are several competing theses regarding a whole host of macro factors and anything can come from left field at any time.
It's gonna be interesting either way.
...and currency debasementPeople attempting to trade in and out of the bond market can offcourse get hurt, but the long term holder can only be hurt if the bonds are defaulted
Yep, but the big bond holders have already factored that in, in general institutions that hold a lot of bonds would be doing so because they are holding the capital to meet future fixed dollar costs....and currency debasement
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