Message from @Deleted User
Discord ID: 396077146734460929
If I were to do that, I would want to hedge for a big crash
I think it's going to go up 10% on the year or nosedive hard.
but that and $4 will get you a coffee at (((Starbucks)))
@Zyzz here's a question, do you think we could say that even if the market goes up possibily, can we be confident saying it *won't* go up 10%? Maybe selling those OTM calls is a way to go on this
@Deleted User what catalyst do you see for a nose dive?
War is the most obvious thing, but a general bubble-popping correction seems overdue.
Nose dive not sure, but we could get interest rate hikes from the fed
@ThisIsChris i am seeing dec 2018 295 strike calls sell at ~2.6. i dont think thats enough premium for me to hold for a year with unlimited loss potential
I don't see things staying static is all I'm sayin'
@Deleted User war is a possibility with NK no question. What would pop the bubble?
I think a broad-scale pullback on credit
i am expecting rate hikes from the fed.. i think cadence of rate increases is key
too many rate hikes, too quickly will spell disater
IMO the american consumer is tapped out
agreed
The outstanding credit numbers are nuts, both in the consumer and corporate spheres
I think that's what is driving a lot of the increase in stock prices
@Zyzz agreed on the decembers, now I'm looking at chains for more near term (also included on the pdf)
lenders get frightened? i can see that happening. what would cause them to get frightened?
I'm saying that there will be a pull back on people seeking credit
i 100% agree that consumers are buying on credit rather than actual money they are earning
or rather, I'm saying that pullback would be the catalyst
I guess what always frightens lenders, if people default. @Zyzz you gave a pretty good analysis the other day on default rates for the largest asset classes. I actually wanted to ask where you find that data
gonna be AFK for a bit but I'll rejoin later and jump in if I have anything to say.
Hope you do!
i get a lot of my student loan info from zerohedge
@Zyzz Interesting. If I understand the process your analysis took: 1. You knew that understanding the size and eliinquincy rates of different asset classes was important to know, and then 2. you googled around for articles that talked to each asset class and its delinquincy rates. Is that correct? I'm just trying to understand process, I thought there might just be a single database where you go to get these types of facts, but I also wouldn't be surprised if such a database didn't exist and you just have to know the right question to ask and start googling
And the reason I'm trying to understand process is I'm also trying to learn how to do good research myself of course
Not trying to "question" or something
@ThisIsChris at work we talk about this stuff a lot. that seeking alpha link was something i knew intuitively (subprime auto defaults) but didn't know an actual %. there are a lot of people in SoFl with nicer cars than me and I know damn well they do not make as much money as I do.
student loans I knew about by reading zerohedge. i have also heard anecdotal stories of high debt loads and parent cosigners (you remember cannoliqueen?)
we understand recessions happen every 8 or so years.. the last one was in 2009
we are about due for one. i know the market is frothy and not just the stock market but the RE market as well
its not a question of if but when and what will trigger it
my position is the tax cut will kick out the possibility for a recession a few years. i dont think it'll happen until after trumps reelection
if we look at 2008's recession that was triggered because you had this massive asset class getting bid up in price with easy money (teaser interest rates, very high LTV (loan to value), no doc/no income loans, subprime borrowing, diversity programs for home loans, etc.). and of course you had some predatory practices such as adjustable rate mortgages amongst other things.
the financials crisis could have been avoided if they would have done: 1) require 20% down payment no matter what, 2) require documentation as to the borrower's job and current income. and of course forget about the other social engineering bullshit
poeple like to blame the financial sector for the financial instruments that were created. that only became an issue because the paper they were securitizing was worthless. if the loans were quality loans then that all would have been fine and you never would have had all the defaults and bankruptcies you saw
we are simply trying to kick around some ideas as to what will cause the next recession