How are your trend recognition skills, /pol? What do you see in this picture?
>>73712567
i see lines
>>73712567
>How are your trend recognition skills, /pol?
You tell me.
>>73712567
I see the S&P 500 growing as the money supply grows and i see it going down when the flow of cheap money stops. And i see it becoming more and more volatile as QE goes on and confidence in the economy decreases.
>>73712567
I've always believed that cheap debt is raising the price of shares through share buybacks, and when the cheap debt ends, share prices will collapse down to its actual values, while the Corporation remains indebted forever. But I've never been able to get the hard data to definitively prove this case.
>>73712567
You need catalyst for a sell off. There are none. Yes, stocks have been going up. Nobody believed the rally from the beginning. It will probably collapse when shit will make sense. Right now people still hate this market. Will go much higher.
> btw the scale is wrong. Look at the log scale. This is nothing compared to 1990s.
>>73713249
The catalyst is when Lenders stop lending money to Corporations so that they can buyback their own shares. Of course, that assumes that the theory above is right.
>>73713091
Looks like some sort of trend
>>73712567
Collapse in late August.
>>73713359
Everyone is selling hands over fist. They claim it's just the corporations are buying. It's just not how things go down. You can't have this negative sentiment, people scared shitless and the market still near the top, and it will collapse how? By magic? Somebody is wrong. It's not like earnings are unexpectedly bad. I don't get it, but this looks like another leg up is forming.
>>73713249
The market won't go any higher. It will collapse this year. We are in recession for a year now.
>>73713564
this.
the "market" has been propped up by cheap money for years. it's only a matter of time...
>>73713465
Not all of those trends are related to each other. Student Loans and Healthcare costs are two different trends. The Federal Debt is another trend. Labor Force + Food Stamps + Median + Home Ownership is a seperate trend.
It all points to 'DOOOOOM,' but solving these problems first requires understanding them. Ive always been down on humanity in the year 2016, but like Kafka, there is always hope that Humanity in the year 20XX will gets shit together.
>>73713580
Corps are buying because when they buy, the share disappears. This is how Corporate CEOs 'exit' from the market. So if I own a company that's going to die soon, I need to buy as much as my own shares back so I can get away on my golden parachute. Corps buying shares =/= Investors buying shares.
>>73713675
And the market anticipates the recession 6 to 9 months ahead. We are in a recession for a year. If you still don't get it, nothing will help you.
>>73713820
And to have a collapse you need sellers. Where will those sellers come in if they are all let out near the high? If you can sell the top, maybe its not the top, no?
>>73712567
>using a linear instead of a logarithmic scale
This is an interesting one.
>>73713917
Our crisis is different. Google Share buybacks first though.
>Nobody wants to buy Corp Shares
>Corp uses cheap credit to buy back Corp Shares
>Corp Shares rise in price
>Cheap Credit runs out
>Corps can't buyback their own shares.
>Collapse happens.
>>73714259
Thank you based Canadian.
I called this shit correctly months ago.
>>73713465
Yeah the US and world economy is going to shit and the FIAT system is about to crash.
And? This isn't news, its been planned a long time.
>>73714425
Ok, so you are saying the corporations will sell their cancelled shares? Then you will see a wave of secondaries. There are no secondaries and or IPOs to speak of.
If we would have collapsed, we would have already collapsed. We usually reach the high and roll over. We didn't roll over. 2 years the market has done nothing. Why would it collapse now? Now it will go higher when moneyflow resumes, and I can assure you it will resume. All the smart money will chase it higher.
You need a boom, to correct from a boom. There was nothing resembling the boom in the recovery post 2008. No excesses. No excesses, no correction. What's the bubble that will burst that will cause liquidations? It's a hated rally, and it will stay hated until there is actual boom that will result in bust.
>>73714845
No. Not at all. Google Share Buybacks. Understand them first, and then try again.
>>73714752
>"I'm the real casualty of this crisis, Sven."
>>73712567
A bubble that has yet to pop
>>73715164
10/10.
>>73712567
Well... I see a stock market rising at the same pace as commercial borrowing.
Worrisome. Yea.
>>73712567
Looks like QE doesn't work.
>>73715361
>Looks like QE doesn't work.
What are you talking about? Its awesome.
Aaaaaaaaaaand lift off
>>73712567
Is there supposed to be a correlation here? The time scales don't match. The left graph bottoms out in 2007-2008, where the right graph is at a peak. Unless you include a mysterious 2-3 year delay, there's no obvious correlation.
>>73715361
That's the trillion dollar answer right here.
>"Don't worry guys, I got this. I'm totally smarter than Keynes and of superior intellect in every way."
>"That's why I invented Quantative Easing. To blame Keynes for my bad idea."
>"Take that Keynes!"
>>73714971
I understand shares buybacks. You have to understand cause and effect. In 2008 the market collapsed because people were forced to sell. People were forced to sell because they were overexposed. They were over exposed because there was a boom.
Will pension funds sell equities? No, they are not overextended.
Will banks sell equities? No, the no longer have prop trading to speak of.
Will retail sell equities? No, they are only exposed to equities in their retirement funds.
Will corporations sell equities? No, those stocks are cancelled.
You are confusing cause and effect. Just because every expansion has corporate buybacks doesn't mean that they cause every expansion. It also doesn't mean they cause collapses.
The collapses are cause by the forced sellers. That's it. That's the only thing that causes a collapse. If you can spot a forced seller, you can spot a collapse. Please explain who will be forced to unload their equity portfolio at any price?
I'm illiterate from economic point of view. Give me some reads. As non-biased as possible pls.
>>73715698
You are talking about a crisis in 2008 that has no relation to this crisis in 2016. I am 90% sure you have no idea what I've been trying to say. So let me repeat it.
>Nobody wants to buy Corp Shares
>Corp uses cheap credit to buy back Corp Shares
>Corp Shares rise in price
>Cheap Credit runs out
>Corps can't buyback their own shares.
>Collapse happens because share prices decline from lack of buybacks..
>>73715843
road to serfdom
>>73715643
Reserve currencies should be pegged to energy. (Crude, nat gas, etc)
When one energy commodity rises too high, or falls too low, you peg the currency to an energy commodity that falls within a threshold that is less volatile.
This only works if nuclear and fusion became more prevalent.
Thoughts? I usually hate resource based currencies, but I see this as the only eventuality.
Energy=work.
Work=wealth.
Less developed nations can back their currency with the work of their people, which would be less expensive than most energy commodities.
This allows for a cheap labor force.
>>73715843
QE is like a Steroid. It made the market feel good short term but it fucked it up long term.
>>73716088
QE was invented Milton Friedman, who was best buds with Hayek. The fact that you don't know of the Mont Pelerin Society means you are among the fools as well. The "NWO" is just an invention to confuse you from the actual players who wanted free money.
>>73716210
That's an interesting idea. I need alot of time to think about it. I have my own 'plan B' for reserve currency because I'm a nobody so nobody cares.
>>73716060
Shit doesn't collapse because it's not bought. You need sellers. Sellers drive the price down. Shit doesn't go down because it's rich or cheap. Shit goes down because people sell. For the prices to collapse, there need to be active sellers. If there are no sellers, market drifts up, because there is a natural moneyflow into the stocks. The only time shit goes down is when there are active sellers. People have to sell for asset prices to go down. Not buying =/= collapse. No liquidity =/= collapse.
>>73715843
all economics is biased. No one has to publish papers to give evidence for their position like how physicists to or any other field you can think of. That's why so many schools of thought that directly oppose each other still exist. It's all about convincing people to agree with you despite there being no more evidence for your viewpoint than for any other. you might as well stay away from economic books because they are all written by people devoted to convincing you of their ideology.
>>73712567
>Canada
http://www.bloomberg.com/news/articles/2016-05-09/alberta-fires-worse-for-canadian-insurers-than-katrina-for-u-s
>>73716319
Are you a Supply-Sider?
>>73716386
This. I know more about economics than most economists on the virtue of being a former small businessman.
>>73716460
I'm a trader. You buy the stuff people buy because it goes up and you sell shit that people sell because it goes down. It's very simple. You can make an argument why buyers or sellers will collapse, but asset prices only move on buyers and sellers, and nothing else. You can have shit goes up because people buy and good stuff go down because people sell. This is how the market works. It has nothing to do with what economic theory you subscribe to. I don't even know what a supply-sider is.
>>73716303
Thanks anon.
Granted, it's not completely fleshed out, but I think it could work as long as fusion becomes viable for well developed countries.
I borrowed a lot from post Weimar germany. They had no capitol and only their work as a resource, and they managed to build an industrial empire.
The problem was that because they had no capitol, they couldn't sell their "work" globally, and it eventually lead to war.
This way you don't leave underdeveloped nations in the dust, while using the labor of your people to compete globally.
We kind of already do this, manufacturing and dumb labor is relegated to mostly underdeveloped countries, I'm merely suggesting we cut out the middleman of fiat currencies that arbitrarily need to be manipulated in order to produce and consume effectively.
I'm interested in hearing your plan b as well.
>>73716644
Good. I needed to check to see if you were part of that cult.
The value of the share prices are only high because the Corporations are willing to buy their shares at that price. When the Corporations can no longer buy their own shares at that price, the price of the shares will collapse, causing the speculative bubble to pop. And the reason WHY Corporations are paying so much for their own shares, is because management owns those very shares and wants to get out of owning the company as quickly as possible. What this means, in the long term, is that corporations will become zombies from high debt, and low demand will mean that corporations won't be able to grow even further.
It's not a 'Holy shit our Real Estate is worthless and we can't pay our loans back.' It's a 'welp. We can't buy our own shit anymore at a high price, time to let the price of sink back to what private investors are willing to buy it for.'
IDK how else this can get through.
>>73716834
Also, if we're not scrapping fiat altogether, in order to promote technological growth and reducing, or at the least predicting student loan bubbles, we could allow STEM graduates to default on their loans. Only STEM though.
Not sure how it works in other countries but in the US student loans are one of the few loans you cannot default on.
>>73716952
I understand what you are saying. You are not understanding what I'm saying. Smart money is short. Nobody will be selling equity. If corporate buying stops =/= sellers come in. It mean there will be less buying. There is always net buying for money management purposes unless the people take some position on the market. What is sold gets bought. You will have forced buyers, not sellers the way I see it. Absence of buying =/= selling. Short selling into a situation that will not result in new sellers = forced buying in the end. Valuations has nothing to do with it. You only sell when anticipating other sellers. No buyers is simply not good enough.
>>73717262
We need to stop guaranteeing student loans. But what's far harder is figuring out how to save those who are already in heavy debt and cannot repay those very loans. That's a taller order for me than even monetizing Climate Change solutions.
>>73716210
Currencies already are kinda pegged.
Floating currencies are best for the institutional speculators and OMOs.
>>73717388
Why do you even think businesses do share buybacks in the first place? According to your argument, there would be no reason to buyback your own shares, because it wouldn't increase shareholder value. Correct?
>>73717388
You are confusing trading volume with the price of each share. Just because something trades more frequently, doesn't mean that share is more valuable.
You know its Happening when CNBC becomes watchable again.
>>73717406
This is true. Allowing a national default on current student loans will fuck the market.
Maybe some sort of process where payments are frozen until the amounts are renogtiated. Education is very overpriced, and has never had a market correction.
Even then, you'd still need to adjust the current system. The problem is that state institutions could easily accommodate readjustments, but private institutions will hold on to profits as long as possible.
This is just my very basic understanding at least.
>>73717539
I understand. I was advocating a system that accurately reflects the work of a nation, without relying on currency manipulation, and promoting technological advancement in energy production.
I could be completely wrong though.
>>73718743
>Maybe some sort of process where payments are frozen until the amounts are renegotiated
Well done. You are smarter than me to figure out the first step. The rest is just up to the crucial details.
>>73719046
I really hope some government agency is actually monitoring threads and thinks, "hey, this is a good idea. I'm gonna let someone know."
Other than that, I'm just some asshole on 4chan.
>>73719387
"Where'd you get that idea, agent johnson?"
"Uhhh...the...uhh...I read it...somewhere..."
>>73719387
IDK. I always assume "No" unless I figure out otherwise, which is extremely unlikely for me to know.
There's also the $$$ factor, because this shit is valuable and not found anywhere else. I really need a girl and without the money I'm SoL.
>>73719813
Just work at Wendy's.
I'm 6'5" and make 75k a year as a chef.
>>73719983
>>73712567
>he doesn't show a picture of the dollar index
>>73713091
>money supply growing
>in an increasing rate enviroment
>>73718969
Pegging a currency can be dangerous if true value depreciates. It can create a black swan tsunami scenario once taken off the teet of the pegg and everything could be lost in an hours time.
Pic is Jan 15 last year when the swiss unpegged their currency. I could hear the stop loss casino all day.
Speculation has been the bread and butter of the ruling class time immemorial. The more people that understand speculation, then the greater value people can create in the labor market, otherwise they're just cattle... and no currency will be able to accurately represent the work of slaves. Before, we were all farmers and had the ability to speculate, and ever since 1929 cities used to be mainly full of speculators.
>>73720278
This is true, except I'm not pegging the currency to a finite resource. ( or rather a much less finite resource.)
The goal will always be production, and for that you will always need energy, whether it comes from the backs of laborers or a nuclear reactor.
>>73720278
>>73720580
Also, to be clear I would not be removing speculation entirely. They system would take into account the changing prices of commodities and will repeg after reaching a certain threshold of value.
>>73720887
I don't think it's very smart to try and intermittently peg currencies, they will eventually run on you by those looking to profit elsewhere. It is not so comfortable to surrender to a calculator.
Japan is just hedging the entire economy, seems like a better solution than trying to force price action.
>>73713832
The market doesn't anticipate shit, because it's being manipulated by the Fed.
>>73722001
That's the aim though. By intermittently pegging the currency and allowing speculation, the end result would be a global shift to energy potential.
Even if speculation drives prices too high, it makes more expensive methods of energy production more viable.
For example, fraccing became much more viable when oil was $100 a barrel.
Investors will make their profits until the price is no longer sustainable, then move on to other methods, such as nuclear and hydro.
Not a big fan of solar and wind because of the materials required, but it may be viable in certain circumstances such as a lack of other natural means of energy production based on cost.
I just realized that improved energy storage would become an eventual necessity as well. This could also become a major factor in long term viability.
>>73712791
You can't create as many jobs when the economy is doing well
>>73723464
Is the goal to make energy consumption more efficient or to increase the integrity of the currency? These are two very broad strategic objectives that can conflict.
>>73712791
jobs created =/= employment rate
>>73724072
The goal is twofold.
Immediate stabilization of currencies (present-viable fusion and battery tech) because of how ingrained our economic system is, then a transition to proliferation of a completely energy based economy after the technology becomes viable.
Future goals (established energy abundance/proliferation) would be eventual extra terrestrial mineral and colonization speculation. Specifically for rare (earth?) elements, and extraplanetary habitation technology.
I will admit, short term would be chaotic and will probably lead to a few crashes.
I would say long term is actually quite viable.
>>73724072
>>73724998
Keep in mind this is just a basic outline of an idea I had which is still evolving and changing.
I really appreciate your input and questions for this reason.
>>73724998
That seems like well-beyond the threshold of reasonable ambition, especially regarding one particular reform. I'm a dreamer too, but it's best to focus on clear-cut parallel reforms rather than tying everything together in one grand maneuver. Otherwise things tend to break down if they aren't compartmentalized, because of a lack of anti-fragility.
Not even saying the idea is bad, rather concerned about the strategic objectives.
>>73725218
My only suggestion at the moment is just to focus on ONE clear Strategic goal because there will be moments where both your strategic goals will conflict with each other (energy efficiency vs Currency integrity.)
>>73725266
>>73725370
I completely agree with you. They will conflict eventually, and a lot of my ideas rely on tech that we currently do not have.
I guess the only real option is to use current energy sources as a model, but as we both know it's far too volatile for any semblance of currency stability.
Best we can do is keep the current system and hope for a breakthrough in fusion and energy storage.
Fingers crossed.
>>73725837
Forgot to mention that proliferation of fusion would be somewhat close to free energy and would bankrupt a large section of the energy market. (Nat gas, oil, etc.)
I would say this would be the tipping point where my model becomes viable, and you can start falling away from our current economic model, at least in energy commodities.
I'd assume it (fusion reactors) would be state owned, and in a perfect scenario, selling energy at cost+maintenance and expansion.
Be honest. Am I pipe dreaming?
>>73725837
Well. That implies you are in a position to seriously implement reform on the Greenback, which I'm pretty sure the guys at the Fed have little interest in anything but more rounds of QE.
Ambition, for me, is trying to salvage SOMETHING from the clusterfuck that will be the aftermath from this election. And even then, I've found out that oddly non-profit law is somehow the actual obstacle to fixing the system. Can't do shit about that. gg America.
>>73726376
Yes but it's alright because all the cool kids have pipedreams.
>>73717906
Companies buy back the stocks to improve performance metrics. The earnings and sales are shared across fewer shares outstanding, thus increasing their value.
The thing you are missing is taxes. Its more advantageous to buy back shares than to issue divvies or to repatriate cash held abroad. This is really what started the trend.
Even assuming you are right and there is a crisis coming from corps buying back stock with the debt. Where do you think it will manifest itself? Not in the stock market. The spreads will blow out before the contangion sets in.
You maybe right, but you stll need a capital hole to appear, thus you still need the catalyst. Your reasoning is a form of a valuation call. Those only work when the reckless buyers can sell. The reckless buyers are corps. They cancell stocks after they buy them
The other problem you ignore is crazy demand for yield. There is more demand than supply. Which means you need losses to hit those people before they stop lending. That could be a catalyst.
Bears argument now is that growth is shit and nothing good is happening. Its not an argument. Its a feel good stance. Path of least resistance is never a feel good position.
>>73717406
It actually is more valuable. All else being equal the heavier traded issues are more valuable.
Not sure how you read that into my argument.
>>73726691
Ok, thanks for being the only other guy in the thread who knows a little about economics.
I'll take what you said and try to focus on more immediate goals within my model.
I was toying with another idea that would involve an orchestrated global crash in order to force policies, but it's not done yet.
Here's hoping I see more people like you when it's ready to be posted on 4chan. Ha.
>>73712567
time for a new crash oy veyy.
goyim u got those shekels ready to bail me out? hehe
>>73727260
Correlation =/= Causation. All else being equal doesn't cut it for me.
>>73727091
Alright. These are some more serious points. For starters, I see the stock market correcting itself down to lower share values once the demand for shares decreases because corporations cannot buyback their own shares. Why the fuck is a share priced at any value, if neither the corporation nor the investor demand sets the price in the first place? This argument is just so weird to me I can't address it correctly, even if it's right. (If a share's price is too high, it's just traded less? What?) Corps raise the price by buying back their own shares, they do so with debt, and there is only a certain amount of debt the corporation can take on.
The catalyst is when Corporations default on their bonds or can't secure more debt to purchase back their shares. At this point, the Corp's ability to buyback will be much less effective, causing the price to fall down toward a 'realistic' price. For the first time in American History, the Shareholder Revolution is going to create a crisis.
>"Bears argument now is that growth is shit and nothing good is happening."
>"I don't need to prove ANYTHING good is happening."
>"Therefore something good must be happening."
How did you even get away with that train of thought?
>>73727562
Ideas only matter when they are matched with potential action. People take my ideas seriously because they are extremely feasible (or unfeasible only because someone is being retarded.)
>>73728062
True.
I look at the current insolvency on a global scale and make the assumption that the system as it is today is no longer viable without major corrections.
Here's hoping good ideas are more viral than bad ones.
>>73728875
It's about people. It has been. And it always will be. Getting the right people in the right places is most of the battle for mankind.
>>73712567
Big Ben and Lady Yelen hard at work
>>73712567
i see wasted opportunity on my part. i wish i had money 5 years ago, and was older
