The Stock Market thread

[Hammer]

Originally Posted by sovereignstar v2

Do people believe they are able to time the ups and downs? Why liquidate at this moment?

No doubt its possible to time the market, even make a living out of it. For professionals, 99% of the population, no.

I have followed Eric Krown crypto on YouTube for 2 years. Every day he puts out a video of around 10 minutes. He is a legit TA trader, very successful.

He uses TA only. You can see on chain buy and sell walls. Otherwise known as support and resistance levels.

He concentrates solely on Bitcoin, nothing else.

I do think in general terms an amateur can swing trade a market somewhat. Most felt the covid liquidity bubble couldn't last. Every economist I follow was calling it. On the flip side, I believe companies like Google, Amazon, and Tesla will likely be good buys right now if you can hold for 3-5 years. No certainties, if Putin drops a nuke all bets are off.

[sterlingice]

Been some noise on social media (particularly everyone's favorite degenerates at Reddit) about Credit Suisse being close to insolvent and now it's starting to spill over to the financial media. Seems like that would be less than ideal and is drawing some uncomfortable comparisons to 2008 and Lehman.

SI

[NobodyHere]

Not sure what the market loves today but I'm all for it.

[Edward64]

Originally Posted by NobodyHere

Not sure what the market loves today but I'm all for it.

Futures are positive.

Let's hope it's 2 steps forward, 1 step back for rest of year.

[Edward64]

Good news I guess and markets are loving it.

https://www.cnbc.com/2022/10/04/jolts-august-2022.html

The level of job openings plunged by more than a million in August, providing a potential early sign that the massive U.S. labor gap is beginning to close.

Available positions totaled 10.05 million for the month, a 10% drop from the 11.17 million reported in July, according to a Bureau of Labor Statistics release Tuesday. That was also well below the 11.1 million FactSet estimate.

The number of hires rose slightly, while total separations jumped by 182,000. Quits, or those who left their jobs voluntarily, rose by 100,000 for the month to 4.16 million.

The job openings numbers are watched closely by the Federal Reserve, which is trying to reverse runaway inflation.

One primary area of interest for the central bank has been the ultra-tight labor market, which had been showing about two job openings for every available worker. That ratio contracted to 1.67 to 1 in August.

[Edward64]

TBH I don't really understand the legal wrangling over this. I've read reports of failed mergers/acquisitions where the company that backed out had to pay a fee to back out. I assume this is a normal clause in any negotiations.

Apparently, this situation is different and Musk was going to be forced to do this. He should fire his M&A team.

https://www.cnbc.com/2022/10/04/twit...0-a-share.html

Twitter shares surged 15% on Tuesday after Bloomberg reported that Tesla CEO Elon Musk plans to go forth with his deal to acquire the company for $54.20 a share. The stock was halted after the report.

Musk agreed to the deal earlier this year, valuing Twitter at $44 billion, but he quickly changed course and tried to back out of the agreement. Twitter sued Musk to force him to go through with the purchase. The two sides were scheduled to go to court on Oct. 17.

According to Bloomberg, which cited people with knowledge of the matter, Musk made his latest proposal in a letter to Twitter. CNBC has independently confirmed Musk’s renewed offer.

[flere-imsaho]

Break up fees are standard in M&A and can apply to the buyer, seller, or both.* You can be liable for break up fees even for circumstances nominally beyond your control (such as the FTC not allowing the merger).

They are usually found in the Letter of Intent, which is the point where both entities have reached the stage of "yes, we agree to do this, here are the guardrails, now let's sort out the details".

While I'm sure we'll find out, in the fullness of time, what actually happened, my money is one Musk deciding he didn't need a break up fee because either a) he was gung ho about the acquisition or b) he decided to ignore his lawyers' advice and figured he could sue his way out of any problem. Either would fit his public personality well.


*Both is a little more rare, and typically has language around who would be responsible for what type of failure. Like buyer has responsibility if they fail to secure financing, seller has responsibility if they misrepresent financial statements, etc....

[JPhillips]

So the good news for me is I have less to declare now for my daughter's FAFSA. I guess that's good.

[GrantDawg]

Elon just agreed to buy Twitter at the orginal sale price. So, goodbye twitter I guess.

[Ksyrup]

This is a few days old, but yikes...

Wow. As part of this Twitter suit, here are some texts to Elon Musk from a redacted recipient and sender.

One talks about letting back on "the boss himself" — likely Trump — and creates a strategy for making a "Blake Masters type" a "VP of enforcement."https://t.co/QqczyfOtB8

— Ben Collins (@oneunderscore__) September 29, 2022

[Lathum]

I think we are just touching the surface on what a monster social media is. It will be our downfall one way or another.

[Ksyrup]

And then there's this. LIV Twitter?

In conclusion, Elon Musk's Twitter purchase will have to be heavily financed by someone else in order for him to complete it.

In May, according to an SEC filing, Musk's Twitter buy was most heavily subsidized by Saudi Prince Al Waleed bin Talal Al Saud.https://t.co/No1jArAmbA pic.twitter.com/j4bVpSVO8F

— Ben Collins (@oneunderscore__) October 4, 2022

[GrantDawg]

Of course he also just tweeted out his very pro-Russian "peace plan" for Ukraine. I imagine he has raised good capital with Russian money as well.

[sterlingice]

So with Facebook and Twitter starting their death spirals, where are people going? Chinese-compromised TikTok? Or is this just going to be even more splintering, getting rid of any sort of common ground? Want right-leaning stuff, you go find Truth Social or whatever. Want something left-leaning, go to, I dunno, Instagram? But everything is an echo chamber- no consensus among the populace - even if one of the echo chambers is, ostensibly, more fact-ish-based while the other is just total fabrications?

SI

[Atocep]

Originally Posted by sterlingice

So with Facebook and Twitter starting their death spirals, where are people going? Chinese-compromised TikTok? Or is this just going to be even more splintering, getting rid of any sort of common ground? Want right-leaning stuff, you go find Truth Social or whatever. Want something left-leaning, go to, I dunno, Instagram? But everything is an echo chamber- no consensus among the populace - even if one of the echo chambers is, ostensibly, more fact-ish-based while the other is just total fabrications?

SI

Tik Tok is killing both Twitter and Facebook right now. Tik Tok is left leaning, but the algorithm for a user's FYP leaves room for the right to use it as well.

Outside of Tik Tok I think you're seeing more splits divided among political ideology as the right has kind of broken off to do their own thing on Parler and Gab and then to a far lesser extent Truth Social.

[Hammer]

I thought America was built around freedom of speech? Doesn't seem right banning Trump from twitter. Can't be one rule for one and one for another. Otherwise before you know it someone you will agree with will be getting banned.

If he is inciting violence that's one thing, but to ban someone just because you don't agree with them is a dangerous path. Can't stand the guy myself, but that besides the point.

[Hammer]

Originally Posted by NobodyHere

Not sure what the market loves today but I'm all for it.

I heard there is pressure coming in from the UN to stop raising rates. Plus the credit suisse thing. If they go down that will be 2008 scale meltdown. The FED are playing a dangerous game, fine line.

[NobodyHere]

Originally Posted by Hammer

I thought America was built around freedom of speech? Doesn't seem right banning Trump from twitter. Can't be one rule for one and one for another. Otherwise before you know it someone you will agree with will be getting banned.

If he is inciting violence that's one thing, but to ban someone just because you don't agree with them is a dangerous path. Can't stand the guy myself, but that besides the point.

Twitter isn't the government, at least not yet. It's a private platform and business who gets to decide what content and user behavior is allowed on their site. Trump is subject to Twitter's rules just like anyone else.

It's funny that conservatives who cry out for "free enterprise" and against "state regulation" are now suddenly for government regulation in regards to Twitter.

[Lathum]

Originally Posted by Hammer

I thought America was built around freedom of speech? Doesn't seem right banning Trump from twitter. Can't be one rule for one and one for another. Otherwise before you know it someone you will agree with will be getting banned.

If he is inciting violence that's one thing, but to ban someone just because you don't agree with them is a dangerous path. Can't stand the guy myself, but that besides the point.

Except he was inciting violence and literally a few days ago on his own site made a death threat to the senate minority leader while using a slur against his wife, so, yeah...

[Edward64]

Originally Posted by Hammer

I thought America was built around freedom of speech? Doesn't seem right banning Trump from twitter. Can't be one rule for one and one for another. Otherwise before you know it someone you will agree with will be getting banned.

If he is inciting violence that's one thing, but to ban someone just because you don't agree with them is a dangerous path. Can't stand the guy myself, but that besides the point.

I think the argument is that he was inciting violence (or just on the edge). You're right there is a slippery slope and a grey area. But specifically for Trump, I'm okay with the ban.

“After close review of recent Tweets from the @realDonaldTrump account and the context around them we have permanently suspended the account due to the risk of further incitement of violence,” Twitter said.

“In the context of horrific events this week, we made it clear on Wednesday that additional violations of the Twitter Rules would potentially result in this very course of action.”

[Edward64]

Originally Posted by Hammer

I heard there is pressure coming in from the UN to stop raising rates. Plus the credit suisse thing. If they go down that will be 2008 scale meltdown. The FED are playing a dangerous game, fine line.

Haven't heard about the UN thing but honestly, they don't get a vote.

Credit Suisse is interesting. I've read they are too big to fail. Odds are they will be bailed out but there'll be some hurt spread out.

I think it's pretty clear the Fed is prioritizing inflation > recession. Yes, they want a soft landing, but inflation is #1 and they'll let the pieces fall where they may.

[molson]

Originally Posted by Hammer

I thought America was built around freedom of speech? Doesn't seem right banning Trump from twitter. Can't be one rule for one and one for another. Otherwise before you know it someone you will agree with will be getting banned.

A private entity choosing who is on their platform IS free speech.

[JPhillips]

The argument is that he violated the terms of service. He was given far more leniency than anyone else as well as multiple opportunities to change his behavior. Saying he should have been allowed to stay on the platform is saying he should be above the rules set by the company for its users.

[RainMaker]

Originally Posted by Hammer

I thought America was built around freedom of speech? Doesn't seem right banning Trump from twitter. Can't be one rule for one and one for another. Otherwise before you know it someone you will agree with will be getting banned.

If he is inciting violence that's one thing, but to ban someone just because you don't agree with them is a dangerous path. Can't stand the guy myself, but that besides the point.

People have been getting banned from chat rooms, forums, and other social media sites for decades. What "dangerous path" are you talking about?

No different than a stadium kicking out an unruly fan or telling someone you don't like they are no longer welcome in your home. It's private property and the owners of that property have free speech rights too.

[GrantDawg]

Oops:
Exclusive: Apollo, Sixth Street no longer in talks to finance Twitter deal, sources say | Reuters

[sterlingice]

This deal isn't done until the ink is actually dried and maybe even a few months after

SI

[RainMaker]

Yeah, his word is not worth much these days. Feels like a delay tactic to get out of a deposition.

[Hammer]

Seems to me politics is very them and us in America right now. Team red and team blue. Not a lot of room to see past the relevant teams narrative. Shame to see such division.

Apart from the ethics of it, it only serves to make Trump more of a figure head anyhow. Push in to the dirty election narrative. Not that I think it was. But apparently 70% of Republicans do. Good chance they are back in power in 2024 the way things are going. If Trump gets back in charge I can see him punishing the left with a vengeance.

Back on topic, just got back in to Tesla after my selling spree a month or so ago. I missed the $925 local top, but 3 major selling points at $840, $880ish and $900 is good enough on reflection. $222 aka $666 factoring in the stock split was my buy price today.

[RainMaker]

There is no political narrative. It's private property and people can decide who they want on it. I'm guessing a Trump supporter would not want a Biden flag to be hung on their property just as a Biden supporter would not want a Trump flag hung on their property.

Genuinely don't understand where any of the political stuff comes from on the issue. Private property has been a staple of both parties beliefs and the Constitution for a very long time.

[Edward64]

Sigh.

What can I say other than I'm hodling. Really no choice. I don't have anything that I don't believe won't come back. But am a little concerned about some MF/ETFs that may have more than they should with FB and AMD.

Powell & Yellen and their transitionary inflation BS.

[Edward64]

Originally Posted by Edward64

I think the argument is that he was inciting violence (or just on the edge). You're right there is a slippery slope and a grey area. But specifically for Trump, I'm okay with the ban.

I don't agree with the Kanye ban. That does seem further down the slippery slope. Whereas Trump is a 10, this is like a 3. If he posts more continuously, then yeah, but not for a stupid comment.

I assume an Elon twitter will be more "forgiving".

The account was locked for violating Twitter's policies. This was in response to a post in which West claimed he was going to go "death con 3 on JEWISH PEOPLE." Previously, West was also banned from Instagram for sharing an anti-Semitic post.

On other news, I read that Elon wants to use twitter and build it up to be a "super app" for all things for all people (like the Chinese apps are). That would be great (if he can pull it off). Twitter is a one trick pony, shockingly so with all the money it has made.

[Lathum]

Twitter would be an absolute dumpster fire under Musk. Americans have already shown how easily manipulated we can be by social media. There are so many bad actors, both foreign and domestic, that would us the new freedoms the platform would provide to be even more divisive and further radicalize people. Removing the already flimsy guardrails would be throwing gas on the fire.

Kayne also absolutely got what he deserved. I was banned for telling someone they were an idiot for claiming sensory safe spaces at baseball games for autistic kids was "woke." Glad to see some equal treatment for people who have an actual voice.

[Ksyrup]

You know Kanye is stupid enough not to know it's def con and not death con. I'm sure plenty of people see that as intentional. I see it as proof of his stupidity.

[Edward64]

Don't really understand UK's problems. It sounds serious.

But FTSE is only down -6.56% YTD. I'm sure there is a logical explanation but makes me wonder why its so different from the US with our bear market.

https://www.cnbc.com/2022/10/11/bank...olatility.html

The Bank of England on Tuesday announced an expansion of its emergency bond-buying operation as it looks to restore order to the country’s chaotic bond market.

The central bank said it will widen its purchases of U.K. government bonds — known as gilts — to include index-linked gilts from Oct. 11 until Oct. 14. Index-linked gilts are bonds where payouts to bondholders are benchmarked in line with the U.K. retail price index.

The move marks the second expansion of the Bank’s extraordinary rescue package in as many days, after it increased the limit for its daily gilt purchases on Monday ahead of the planned end of the purchase scheme on Friday.

The Bank launched its emergency intervention on Sep. 28 after an unprecedented sell-off in long-dated U.K. government bonds threatened to collapse multiple liability driven investment (LDI) funds, widely held by U.K. pension schemes.

[Hammer]

We haven't raised rates as much as you guys. Plus our weak pound helps the FTSE. It does seem to me American media is vastly over reporting UK economic issues. In real terms everything is real solid.

We had some very generous tax cuts recently which caused a wobble. But a pivot from QT to QE has calmed the waters. It was a pretty dumb move on the part of the government but nothing earth shattering. Our debt to GDP is under control, so QE is an option. When you are Greece or Italy a cock up like this would of been more of an issue.

[Edward64]

Good to hear UK is doing well.

Had to look up Debt to GDP

List of countries by public debt - Wikipedia

#3 Japan 259%
#4 Greece 212%
#7 Italy 155%
#8 Singapore 152%
#14 Portugal 135%
#16 US 134%
#20 Spain 120%
...
#32 UK 102%

I knew the US was high and not surprised by Greece, but was surprised to see the others were also so high.

[flere-imsaho]

Interest rates have been at historical lows for the past decade. Why wouldn't you load up on debt?

[Edward64]

Some debt is good. Excessive debt is bad. Don't know what "excessive debt" is. I'm sure there are a ton of for/against arguments based on multitudes of but this/that factors.

I remember reading a while ago that US was fine because it was < 100% of GDP. We've clearly exceeded that now.

[Hammer]

Originally Posted by Edward64

Some debt is good. Excessive debt is bad. Don't know what "excessive debt" is. I'm sure there are a ton of for/against arguments based on multitudes of but this/that factors.

I remember reading a while ago that US was fine because it was < 100% of GDP. We've clearly exceeded that now.

Yes, and that is why the ability for the U.S. to raise interest rates is limited. Raising rates pushes GDP down, which increases the debt to gdp ratio. The only way to get out of jail then is to print more money, which raises inflation.

Greece were bailed out when they defaulted on their debt by the EU. Nobody will bail out the U.S., or the U.K. for that matter. The secret weapon is always to print more money but the covid money printing is exactly why we have this inflation problem.

Fiat money is a ponzi scheme IMO. Constantly being devalued by printing more of it. Most crypto currencies are doing the same thing. Same problem with gold, more sophisticated mining increasing the supply and putting downward pressure on price.

There will never be any more Bitcoin. More and more cash enters the world, so if demand stays flat the price still goes up. But I see it as a new and improved gold, not a new reserve currency. But we will see.

[sterlingice]

That sounds a lot like being on the gold standard, which had huge implications for the economy as well, many of which were significantly negative.

SI

[PilotMan]

Originally Posted by Edward64

Some debt is good. Excessive debt is bad. Don't know what "excessive debt" is. I'm sure there are a ton of for/against arguments based on multitudes of but this/that factors.

I remember reading a while ago that US was fine because it was < 100% of GDP. We've clearly exceeded that now.

The question is 'why' are we borrowing money.

If it's to pay today's bills. That's clearly bad. If it's to invest in infrastructure and make capital improvements, that's good. The US stopped spending massive amounts for capital improvements decades ago. Regan cut taxes, made the rich richer, drove money from the public sector to the private sector that emphasizes profits. Public sector investments are not seen as profitable enough in the short term for private sectors to have any interest in them and the government now lacks the resources and will for them. That's why things like the last major airport (Denver) were built almost 30 years ago, despite the growing need and expansion nationally in demand.

[JPhillips]

Japan has been basically fine. The biggest pressure is debt service and that's still at historical mid-levels in the US.

I still think we should deal with the structural deficit, but the only realistic way to do that is to raise taxes and that's not gonna happen.

As for currency, the dollar is a measure of the strength of the U.S. economy not just the price of a single asset. That approach has been very stable over the past 75 years.

[Hammer]

The strong dollar is wrecking multinational companies in the U.S. I would argue it is a very bad thing for the U.S. economy. So if you mean a measure of the strength of the economy in an inverse way, then yes, I agree. American retirement saving are being wrecked by the strong dollar. There are upsides, but I believe they are outweighed.

[flere-imsaho]

Originally Posted by Edward64

Some debt is good. Excessive debt is bad. Don't know what "excessive debt" is.

The amount of debt service is the important consideration, IMO, which is why I mention interest rates. I think this is where most of the populace gets tripped up, by just looking at the topline number, which is kind of immaterial because servicing, say, $1B debt at 1% is quite different from servicing $1B debt at 5%.

Originally Posted by PilotMan

The question is 'why' are we borrowing money.

If it's to pay today's bills. That's clearly bad. If it's to invest in infrastructure and make capital improvements, that's good.

Which is a separate and, IMO, more important question.

[Hammer]

Originally Posted by flere-imsaho

The amount of debt service is the important consideration, IMO, which is why I mention interest rates. I think this is where most of the populace gets tripped up, by just looking at the topline number, which is kind of immaterial because servicing, say, $1B debt at 1% is quite different from servicing $1B debt at 5%.

Right, in combination with the raising of rates pushing GDP down its a double whammy for the FED. They simply can't raise rates as much as they would like to fight inflation as the debt would become unmanageable.

They will have a tipping point in mind, and wherever inflation is then they will have to back off regardless. Most likely scenario is inflation sticking around 5% or so I suspect for the medium term and there won't be anything they can do about it.

I see them as bluffing and talking tough to try and create fear and slow demand, thus bringing inflation down with words. Mathematically they simply cannot do what they are implying (we won't stop until its 2%) if inflation remains sticky. They end up in the top 10 along with Greece, Italy and Japan. Inflation at 5% is a far more palatable alternative.

[Edward64]

Inflation is the gift that keeps on giving. Transitionary inflation my ass.

11:18am - nice swing back into the black!

Excluding volatile food and energy prices, core CPI accelerated 0.6% against the Dow Jones estimate for a 0.4% increase. Core inflation was up 6.6% from a year ago, the biggest 12-month gain since August 1982.
:
Thursday’s CPI data likely cements a fourth consecutive 0.75 percentage point hike when the Fed next meets Nov. 1-2, with traders assigning a 98% chance of that move.

[Edward64]

Nice for retirees. Bad for national debt I assume.

Social Security recipients will receive an annual cost-of-living adjustment of 8.7% next year, the largest increase since 1981, the Social Security Administration announced Thursday.

The spike will boost retirees’ monthly payments by $146 to an estimated average of $1,827 for 2023.

The hefty increase, which follows a 5.9% adjustment for this year, is aimed at helping Social Security’s roughly 70 million recipients contend with the high inflation that’s been plaguing the US since last year.

[Solecismic]

I've been ticked off at myself for years because I set up my largest retirement account specifically to handle inflation pressure.

For years, I'm not sure I've seen the growth some others have. And now in the last year, it's just about breaking even. Probably means I'm in the same spot now I would have been if I had just left it alone in the first place.

As soon as the laundry switches in Washington, I'll mess with the account again.

We've gone around this free speech/private enterprise issue so many times here. It makes me uncomfortable for many reasons.

As Hammer said, we are too polarized as a society right now. And as someone who can't stand either pole, I feel like every move either side makes these days ends up hurting the country.

For at least the last ten years, the answer to complaints from the right about tech censorship has been "well, you don't want restrictions on private enterprise, don't be hypocrites and set up your own social media."

So they tried. But the tech world is so integrated and entrenched in Silicon Valley that their attempts have been opposed and ineffective.

I remember when I started Solecismic, it was impossible to find a bank willing to let me set up a payment processing system online. I had to get an 800 number and hire a company to take orders over the phone. The banks that recognized the future became very large and very powerful very quickly. And now they are powerful enough to eliminate new competition. Even that idiot Kanye, who richly deserves to be told he's an idiot 24/7, was cut off by his bank along with Twitter. Paypal tried (and backed off for the moment) to insert a clause fining customers for "misinformation," which sounds like something Putin would have come up with.

How was this all possible without Section 230? But simply repealing it doesn't solve the problem. It's a new world with everything online, and perhaps we need to examine just what human rights look like from an online perspective.

That said, I think humanity would be vastly improved without Facebook and Twitter.

[Edward64]

From what I gather, there's not real US equivalent to the UK Chancellor as those responsibilities are shared between Congress & Treasury Secretary.

I'm guessing Kwarteng should have been fired based on the miscalculations of the past several weeks (regardless if he was hung out to dry or not by Truss). Kinda would be nice if there was that one fall guy that we can blame our problems in the US on also. If had to pick that one person, I'd pick Powell. The markets will, of course, freak out but I'd backfill him with newly minted Nobel laureate Bernanke which should help calm things down.

Live Updates: British PM Liz Truss fires finance minister Kwasi Kwarteng | CNN

Kwasi Kwarteng was fired as Britain’s chancellor on Friday morning, a senior source inside Downing Street has confirmed to CNN, after it had been determined that speculation over his political future had become a distraction that was not in the country’s interest.

Kwarteng has been fired just weeks into the job, after he and Prime Minister Liz Truss unveiled a disastrous financial plan that tanked UK markets and alarmed global financial agencies.

The move means Truss has ousted one of her closest allies and admitted defeat on the economic vision she touted throughout the summer and in the first weeks of her premiership, after she succeeded Boris Johnson.

Kwarteng was seen as a darling of the Conservative Party’s economic right wing, and he has defended his agenda as the only way to boost Britain’s economy in the long term.

Britain will soon have its fourth chancellor in as many months. But it remains to be seen how much of Kwarteng’s plan Truss will attempt to salvage, and whether the dismissal is enough to save her own premiership.

[Hammer]

Originally Posted by Solecismic

IAs Hammer said, we are too polarized as a society right now. And as someone who can't stand either pole, I feel like every move either side makes these days ends up hurting the country.

As an outsider I see a country who now talk in absolutes a lot more than they used to. A lot of people who have picked a side and have let that get in their head. Their opinions are dictated by the opinions of team A/B with no compromise. It has become a sort of religion. No room for words like probably or perhaps. No room to think you may be wrong and the opposing side may be right, or even more likely the truth is somewhere in the middle.

I am slightly left leaning but all things considered Trump did a lot better than I expected. On the flip side Biden hasn't been what I hoped and I am not convinced by some of his lines of thinking. That's not to say Trump was better overall, just that my perhaps my dislike for him as a person threw off my judgement of how effective he could be.

Maybe what Trump did do is contribute to this divide. Hopefully it 10% loonies on either side creating a lot of noise with 80% of the smarter people in the middle watching on. But take those percentages with a pinch of salt. I'm not convinced.