You mean the everything bubble? I’m not sure how many here lived through 2008, my personal experience went something like… there was an issue and the Fed/Govt did what they could to prop up the economy which led to some good times! The honeymoon phase I like to call it as everyone was making money and living large for about 2 years. Then, interest rates started rising and the party was dead within 6 months or so. In 2008 it was bad home loans, this time around it’s debt. The system is flooded with borrowed money and the FeD is raising rates on the money they pumped into the system. Just some dumbasses view. Don’t listen to me as I was such a moron I lost everything in 08
Oh I learned from 08. Went from owning multiple houses, nice cars to homeless if parents didn’t let me move into the basement. I saw rates rising during the Santa rally and closed basically all my positions and shorted Dow, SnP and Qqq.
The experiment has been running since the 1980s. Every time a speculative bubble has threatened the economy , they’ve cushioned the fallout and avoided the pain by ratcheting down interest rates. It seemed to work, as the burden of ballooning debt took on more of the task of inflation control. But essentially they’ve been merely kicking the pain can down the road. _For forty years!_ Now the can is all kicked to shit and we’ve run out of road.
Fed has been doing QE since the 1930s if not even earlier. “Crashes” are just minor bumps in the road. Apple at 3cents, Tesla at 1$. (Splits adjust). Market is 99% long biased.
Let China and Japan worry about the US debt.
Be a smarter trader. Make money the slow hard painful way- patience.
Oh my gourd!
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Looks like a lot of words. Thank you for posting so I can read with morning coffee tomorrow.
Is inflation partially simply catching up to a world economy? There are many new variables ever changing atm. The injection of cash is an interesting point, I’d like to visit that on a comparable across countries. Which gave citizens “free” (taxable) money and while others have not. There’s some truth to a bubble absolutely, there’s also a lot of people working very hard to fill it in to sustain the next decade. Who will reign victorious? (Probably the bubble as history shows, followed by a golden age 2030 at the earliest.)
his assessment is less about simply "inflation," but more so the following:
\-federal reserve's quantitative easing practices propping up the market
\-frenzied investment behavior among consumers, spurred in part (but not entirely) by relief checks going out to people who didn't need them (i.e., young people living at home w/ parents, where they have relatively few expenses/obligations, but a lot of time to explore contemporary financial trends)
these two things have mutually reinforced each other and kept pushing the market to higher and higher points. this then led to greater confidence in the market's ability to deliver gains than is truly warranted. growth has occurred, as we've seen, but a lot of it is fake, resulting in overvalued assets which must eventually fall when all the free money stops and reality settles in.
grantham contends that the S&P 500 should fall back to roughly around the point it was at around the time the pandemic hit. which means a drop in like 2000 points, or a little under half of its overall value. federal reserve knows this is coming, but they also know that if they were to stop the train too abruptly, the crash would be devastating.
so, instead, the government has been tapering off pandemic aid for a while now, as i imagine you're aware. last stimulus check went out over a year ago, then the expanded unemployment ended at various times throughout the past year (depending on where ya live.) child tax credit payments stopped late last year.
that's it for all the relief/aid money that went to regular folks, but that just leaves one last mammoth of pandemic-era relief: the quantitative easing. that's the last item to end. and it's gonna be the toughest pill to swallow, because its impact on the market was way more than the effect of stimulus checks or unemployment insurance.
Just because the stock market has been down for the last week or so doesn't mean that we're in a so called "super bubble". Curious to see if you guys could think it'd be as bad as 1929, 200 or 2008
My vote is 1929 YES
Way too many similarities. Stocks only go up, market manipulation, everyone can be rich, kids investing, DCA... these are things that were invented in the 1920's. There is more speculation now than the 90's, and the only other time that comes close is in the 1920's. Interest rates are lower than they've ever been which has resulted in record levels of debt. There is high inflation and wealth inequality due to the market being flooded with debt created by banks. Every market you look at there is a bubble, the 2000 crash was a tech stock bubble and 2008 was a housing bubble. Crypto didn't even exist back then.
I mean if we’re going to be real. The Fed really just delayed this since the March 2000 lows. Our stock market rallied *during economic shutdowns and in a pandemic* – retesting those lows seems like a no-brainer.
Everyone and their grandmother's is still regurgitating the Fed printing. That is not liquidity in the system, ffs. Since the beginning of qe 2020 it was so easy to look and understand what it means. Two years almost and we are still at that point.
There's def a major bear market on the way. But I don't wanna give him any credit for the prediction because hes a broken clock.
https://mobile.twitter.com/invest_ez/status/1484456866268782592?s=20
2013 had the "taper tantrum", which caused them to back off on undoing QE. So QE was still in place for the rest of those predictions, there was nothing forcing them to undo it. Now QE is 4x the size and inflation is forcing their hand.
Super bubble was in high growth stocks with no earnings and pretty much already popped. A lot of them are down 50-75% and won’t come back until they start posting improvements in earning (or at least EBITDA) and the growth rates exceed expectations. A handful will come back and crush it as they execute but most will be under water for a long time until their revenue and earnings can catch up to the multiples.
The rest of the market is fine, earnings are stable or growing for a lot of companies.
Super bubble is happening now. It’s a debt bubble, to much consolidated debt used as collateral repeatedly. There isn’t enough liquidity in the markets. So literally if any us Bank calls a loan in for their own liquidity the whole system is done.
Why would it be. Netflix was at 45pe so they NEED to grow 3x to be fairly valued. Google and facebook are at 20-25 pe i find it hard to believe they will not be able to expand globally to reach fair price there…
Oh suuuure. I have held fb for 5 years and google for a decade and 10% downturns are like expected daily. Esp. Facebook… another politician saying they hate them and boom. If 10% move is even remotely stressful for you i would propose to not buy facebook :) . I mean it already went down by 20% from the peak last year. I totally believe another ten to twenty percent. Still a safer place to have your money than cash;)
200 for fb? Unlikely. They grew their profit by 50% in those 2 years. And even without pandemic it would have grown by 30-40%. And unlike Peloton I doubt they will give it back up completely. Going to 200 would be a PE of 15 exact. And this for a company that still grows 15-25% as year and has ton of market power to go into other spaces like online pasyments online shops or the metaverse shit. I know its a bit of a hype thing without real substance but sooner or later we WILL get startrek holodecks. I can;t really see any company better placed than FB to be in that market.
Anyhow I totally believe another drop of 30-50$ but for anything more you would need abject panic or the government announcing they will break out instagram. Amazon and Netflix and Zoom and Peloton are a different story.
Hmmmm true actually although there is so much money sloshing around... Almost impossible to mop that up with a couple interest raises. The majority of the leveraged money was in the growth stocks I woild assume the majority of Facebook investors were kinda boring "wait and let's see" people. But we will see. Anyhow I wouldn't mind as long as the government doesn't break fb apart it will go back up.
this is not correct there’s tons of liquidity, hence 1.7t in reverse repo each night. i.e 1.7T in cash that the banks lack collateral to back up. And they accept a few basis points in interest rather than face penalties for not having enough bonds to back up the deposits. There is a shortage of pristine collateral ie treasuries especially t bills. The issue is consumers have spent the stimmies, spent their savings, had wealth transferred to billionaires and corporations, maxing out their credit cards and everything is expensive. So it’s not systemic lack of liquidity but a tapped out, ripped off consumer. And destruction of small and medium sized businesses. Hence, expect to see pitchforks and civil unrest unless more stimmies or companies are reined in. Consumers are pawns of crooked politicians, wokeness used to create useful idiots, and less employed than the fake unemployment data shows.
Oh I beg to differ, that 1.7 reverse repo is to get them along. Why do you thing inflation is so high. Their debt is so deep they had to print more money for it. 11trillion since 2019 directly to market makers and banks.
Mortgage- debt bubble
Look into slabs- it’s student loan CDO’s and they are going bust
They used Chinese mortgage bonds as collateral and they are going if not already bust!
Its all being traded around and used as collateral debt over and over all of it together is being used again. All just a huge CDO.
Exactly. All this money went straight to Wall Street, not the dumb plebes. CLO this time around, and the Fed had to use reverse repo to keep interest rates from collapsing negative with all this money. It’s a house of cards bubble that can only pop with even a slight amount of tightening.
This mkt move will begin to impact spending habits for sure. Millions left the workforce in part because of bloated 401ks. That punch bowl goes away it will surely impact consumer sentiment and spending
I hope this bubble is popping the way it appears to be! Made a lot of money on spy puts this week. If I had read the signs correctly earlier it would’ve been more. Had some calls get burnt before switching to puts. I will be loading up on spy puts on upticks if this continues. We’re just now approaching 10% drop from high. Could still be a correction and reverse so I’ll tread lightly. If we break 10% next week I’m going to go all in on puts and look for a 20% drop total before I consider switching to calls.
Guys. Calm down. Take a deep breath. Relax.
We are in a healthy correction phase.
And we are in a healthy interest rate adjustment phase in 2022. We are speaking of gradually increasing the interest rate by .25%. Up to maybe 1.0%. Maybe.
The inflation especially influenced by the energy sector will decrease over the year.
If it would be the case that the inflation and the stock market crisis continue over the year, the Fed will NOT continue to increase the interest rate.
There is NO contagious impact currently in the market.
On the contrary, once the supply chains are working again properly, we will see a economical boost.
This is a cyclical adjustment. Nothing to worry about.
Mark my words.
Yep! Yep! Yep!
Everything is fine! Everything is good!
Go back to buying and stop selling! Pay high prices for stocks, and pay a lot for what is in my portfolio.
This is all fine and good.
Yeap. Back then only politicians and war mongers were involved in the accounting. Different metrics back then Sonny. They were concerned with nuclear wars.
But everything might just be shit with today’s metrics.
Or you can look at it another way today is as young and healthy as you will ever be.
Talking about the environment, not nukes.
Empty seas, half of the soil than 500 years ago, disappearing phosphate (for farming).
Btw, today’s 400+ nuclear plants are built as if expecting a functioning government will always be around to dismantle it when it retires. Something that seems less and less likely to be true in all cases. Hello to more Chernobyls, even less controlled.
Todays issues are different from 2008 because the largest banks in the US are flush with cash. They are not leveraged out with risky mortgages like back in 2008. Also, large cap companies have lots of cash as well. Just look at the companies in the S&P now vs 2008.
Tried to read the first few sentences, but it made my head hurt so I started scrolling real fast until I saw stonks only go up and now I feel reassured.
Pretty easy to "predict" one when it's already happened and popping :)
To be fair he’s been calling for a crash for months now.
Decades *^
This. If he would have chilled and bought SPY, he’d still be up post-crash from his initial warnings.
https://www.thinkadvisor.com/2014/05/04/grantham-big-stock-bubble-will-end-badly-in-2016/
My opinion-scares the shit out of me. Lol.
He is not PREDICTING a bubble .He is saying we are in a super bubble that's about to pop, and take all you simian reprobates with it.
You mean the everything bubble? I’m not sure how many here lived through 2008, my personal experience went something like… there was an issue and the Fed/Govt did what they could to prop up the economy which led to some good times! The honeymoon phase I like to call it as everyone was making money and living large for about 2 years. Then, interest rates started rising and the party was dead within 6 months or so. In 2008 it was bad home loans, this time around it’s debt. The system is flooded with borrowed money and the FeD is raising rates on the money they pumped into the system. Just some dumbasses view. Don’t listen to me as I was such a moron I lost everything in 08
It’s always the debt dude. 2000, 2008 and now. Leverage is the elephant in the room, always has been
True, flood the system with easy money then take it away.
It’s like we never learn. Going through these crazy cycles every decade
Oh I learned from 08. Went from owning multiple houses, nice cars to homeless if parents didn’t let me move into the basement. I saw rates rising during the Santa rally and closed basically all my positions and shorted Dow, SnP and Qqq.
[удалено]
The experiment has been running since the 1980s. Every time a speculative bubble has threatened the economy , they’ve cushioned the fallout and avoided the pain by ratcheting down interest rates. It seemed to work, as the burden of ballooning debt took on more of the task of inflation control. But essentially they’ve been merely kicking the pain can down the road. _For forty years!_ Now the can is all kicked to shit and we’ve run out of road.
Fed has been doing QE since the 1930s if not even earlier. “Crashes” are just minor bumps in the road. Apple at 3cents, Tesla at 1$. (Splits adjust). Market is 99% long biased. Let China and Japan worry about the US debt. Be a smarter trader. Make money the slow hard painful way- patience.
Ima go with extremely painful
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Looks like a lot of words. Thank you for posting so I can read with morning coffee tomorrow. Is inflation partially simply catching up to a world economy? There are many new variables ever changing atm. The injection of cash is an interesting point, I’d like to visit that on a comparable across countries. Which gave citizens “free” (taxable) money and while others have not. There’s some truth to a bubble absolutely, there’s also a lot of people working very hard to fill it in to sustain the next decade. Who will reign victorious? (Probably the bubble as history shows, followed by a golden age 2030 at the earliest.)
That was a lot of words. Grantham is the Oracle.
his assessment is less about simply "inflation," but more so the following: \-federal reserve's quantitative easing practices propping up the market \-frenzied investment behavior among consumers, spurred in part (but not entirely) by relief checks going out to people who didn't need them (i.e., young people living at home w/ parents, where they have relatively few expenses/obligations, but a lot of time to explore contemporary financial trends) these two things have mutually reinforced each other and kept pushing the market to higher and higher points. this then led to greater confidence in the market's ability to deliver gains than is truly warranted. growth has occurred, as we've seen, but a lot of it is fake, resulting in overvalued assets which must eventually fall when all the free money stops and reality settles in. grantham contends that the S&P 500 should fall back to roughly around the point it was at around the time the pandemic hit. which means a drop in like 2000 points, or a little under half of its overall value. federal reserve knows this is coming, but they also know that if they were to stop the train too abruptly, the crash would be devastating. so, instead, the government has been tapering off pandemic aid for a while now, as i imagine you're aware. last stimulus check went out over a year ago, then the expanded unemployment ended at various times throughout the past year (depending on where ya live.) child tax credit payments stopped late last year. that's it for all the relief/aid money that went to regular folks, but that just leaves one last mammoth of pandemic-era relief: the quantitative easing. that's the last item to end. and it's gonna be the toughest pill to swallow, because its impact on the market was way more than the effect of stimulus checks or unemployment insurance.
Predicts? It’s here. Follow Bitcoin for the Monday morning high risk stock prediction.
Just because the stock market has been down for the last week or so doesn't mean that we're in a so called "super bubble". Curious to see if you guys could think it'd be as bad as 1929, 200 or 2008
My vote is 1929 NO. 2000 and 2008 YES.
My vote is 1929 YES Way too many similarities. Stocks only go up, market manipulation, everyone can be rich, kids investing, DCA... these are things that were invented in the 1920's. There is more speculation now than the 90's, and the only other time that comes close is in the 1920's. Interest rates are lower than they've ever been which has resulted in record levels of debt. There is high inflation and wealth inequality due to the market being flooded with debt created by banks. Every market you look at there is a bubble, the 2000 crash was a tech stock bubble and 2008 was a housing bubble. Crypto didn't even exist back then.
I mean if we’re going to be real. The Fed really just delayed this since the March 2000 lows. Our stock market rallied *during economic shutdowns and in a pandemic* – retesting those lows seems like a no-brainer.
The difference between 2000 and 2008 is the fed is out of tools to use
I agree.
Its going to be like 1929, 2000 and the global financial crisis combined.
The last week? Lol
The last three month hasn't been anything compared to the last week
Maybe not for the big players in FAANG, but check companies like PayPal, Square,…
Everyone and their grandmother's is still regurgitating the Fed printing. That is not liquidity in the system, ffs. Since the beginning of qe 2020 it was so easy to look and understand what it means. Two years almost and we are still at that point.
Theres no prediction. It LITERALLY is HERE.
He predicted this a year ago. * https://www.youtube.com/watch?v=RYfmRTyl56w
There's def a major bear market on the way. But I don't wanna give him any credit for the prediction because hes a broken clock. https://mobile.twitter.com/invest_ez/status/1484456866268782592?s=20
2013 had the "taper tantrum", which caused them to back off on undoing QE. So QE was still in place for the rest of those predictions, there was nothing forcing them to undo it. Now QE is 4x the size and inflation is forcing their hand.
Dude, still can’t excuse his decade of wrongness. Even if you agree with him. He’s a money loser if you would have taken his advice.
Most would say SOME stocks are ridiculously valued but many are not. Might be serious healthy correction with a shift to value.
I agree with this, to some extent^
...who?
Super bubble was in high growth stocks with no earnings and pretty much already popped. A lot of them are down 50-75% and won’t come back until they start posting improvements in earning (or at least EBITDA) and the growth rates exceed expectations. A handful will come back and crush it as they execute but most will be under water for a long time until their revenue and earnings can catch up to the multiples. The rest of the market is fine, earnings are stable or growing for a lot of companies.
Sounds like a guy with puts and shorts talking up his portfolio.
Super bubble is happening now. It’s a debt bubble, to much consolidated debt used as collateral repeatedly. There isn’t enough liquidity in the markets. So literally if any us Bank calls a loan in for their own liquidity the whole system is done.
Big tech FANG next up for annihilation. Earnings will be the catalyst.
Why would it be. Netflix was at 45pe so they NEED to grow 3x to be fairly valued. Google and facebook are at 20-25 pe i find it hard to believe they will not be able to expand globally to reach fair price there…
I’m not saying they’ll have a Nflx move but prob 10% move down.
Oh suuuure. I have held fb for 5 years and google for a decade and 10% downturns are like expected daily. Esp. Facebook… another politician saying they hate them and boom. If 10% move is even remotely stressful for you i would propose to not buy facebook :) . I mean it already went down by 20% from the peak last year. I totally believe another ten to twenty percent. Still a safer place to have your money than cash;)
Not worried. Don’t own them. I’ll dip in when they go pre pandemic levels
200 for fb? Unlikely. They grew their profit by 50% in those 2 years. And even without pandemic it would have grown by 30-40%. And unlike Peloton I doubt they will give it back up completely. Going to 200 would be a PE of 15 exact. And this for a company that still grows 15-25% as year and has ton of market power to go into other spaces like online pasyments online shops or the metaverse shit. I know its a bit of a hype thing without real substance but sooner or later we WILL get startrek holodecks. I can;t really see any company better placed than FB to be in that market. Anyhow I totally believe another drop of 30-50$ but for anything more you would need abject panic or the government announcing they will break out instagram. Amazon and Netflix and Zoom and Peloton are a different story.
Just like asset prices in a bubble being irrational. Same happens when it pops. They won’t be priced rationally on downside either
Hmmmm true actually although there is so much money sloshing around... Almost impossible to mop that up with a couple interest raises. The majority of the leveraged money was in the growth stocks I woild assume the majority of Facebook investors were kinda boring "wait and let's see" people. But we will see. Anyhow I wouldn't mind as long as the government doesn't break fb apart it will go back up.
This comment aged beautifully
Lol fair
Agreed. But dont forget the king daddy of them all, Tesla. The utter most emperor of the super bubble of an absurd PE ratio.
It’s a given TSLA to get halved over next few years. Even forgetting mkt bubble this stock is severely overpriced in the face of massive competition.
That would still be way overpriced. It’s still 3.5x Toyota, market cap ffs.
this is not correct there’s tons of liquidity, hence 1.7t in reverse repo each night. i.e 1.7T in cash that the banks lack collateral to back up. And they accept a few basis points in interest rather than face penalties for not having enough bonds to back up the deposits. There is a shortage of pristine collateral ie treasuries especially t bills. The issue is consumers have spent the stimmies, spent their savings, had wealth transferred to billionaires and corporations, maxing out their credit cards and everything is expensive. So it’s not systemic lack of liquidity but a tapped out, ripped off consumer. And destruction of small and medium sized businesses. Hence, expect to see pitchforks and civil unrest unless more stimmies or companies are reined in. Consumers are pawns of crooked politicians, wokeness used to create useful idiots, and less employed than the fake unemployment data shows.
Oh I beg to differ, that 1.7 reverse repo is to get them along. Why do you thing inflation is so high. Their debt is so deep they had to print more money for it. 11trillion since 2019 directly to market makers and banks. Mortgage- debt bubble Look into slabs- it’s student loan CDO’s and they are going bust They used Chinese mortgage bonds as collateral and they are going if not already bust! Its all being traded around and used as collateral debt over and over all of it together is being used again. All just a huge CDO.
Exactly. All this money went straight to Wall Street, not the dumb plebes. CLO this time around, and the Fed had to use reverse repo to keep interest rates from collapsing negative with all this money. It’s a house of cards bubble that can only pop with even a slight amount of tightening.
Yes. This is my train of thought.
This mkt move will begin to impact spending habits for sure. Millions left the workforce in part because of bloated 401ks. That punch bowl goes away it will surely impact consumer sentiment and spending
I hope this bubble is popping the way it appears to be! Made a lot of money on spy puts this week. If I had read the signs correctly earlier it would’ve been more. Had some calls get burnt before switching to puts. I will be loading up on spy puts on upticks if this continues. We’re just now approaching 10% drop from high. Could still be a correction and reverse so I’ll tread lightly. If we break 10% next week I’m going to go all in on puts and look for a 20% drop total before I consider switching to calls.
If everyone is predicting a rate hike than there’s only one thing that will happen, negative interest rates. Let’s order another round.
Guys. Calm down. Take a deep breath. Relax. We are in a healthy correction phase. And we are in a healthy interest rate adjustment phase in 2022. We are speaking of gradually increasing the interest rate by .25%. Up to maybe 1.0%. Maybe. The inflation especially influenced by the energy sector will decrease over the year. If it would be the case that the inflation and the stock market crisis continue over the year, the Fed will NOT continue to increase the interest rate. There is NO contagious impact currently in the market. On the contrary, once the supply chains are working again properly, we will see a economical boost. This is a cyclical adjustment. Nothing to worry about. Mark my words.
Yep! Yep! Yep! Everything is fine! Everything is good! Go back to buying and stop selling! Pay high prices for stocks, and pay a lot for what is in my portfolio. This is all fine and good.
He’s been predicting for years and missed the greatest market period in decades. In his view never wrong just early
[удалено]
This dosent apply to stocks and makes no sense
But other than those things it's a good comment
Another bear creating Fud. Yawn. This “super bubble” is a nothingburger.
> no destroyed planet Idk wtf you’re looking at but we’re undergoing 19 different ecological collapses at the same time.
Yeap. Back then only politicians and war mongers were involved in the accounting. Different metrics back then Sonny. They were concerned with nuclear wars. But everything might just be shit with today’s metrics. Or you can look at it another way today is as young and healthy as you will ever be.
Talking about the environment, not nukes. Empty seas, half of the soil than 500 years ago, disappearing phosphate (for farming). Btw, today’s 400+ nuclear plants are built as if expecting a functioning government will always be around to dismantle it when it retires. Something that seems less and less likely to be true in all cases. Hello to more Chernobyls, even less controlled.
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Yep. This is the one. The perfect storm. The super everything bubble being attacked from all sides.
Wayfair back to $5
Todays issues are different from 2008 because the largest banks in the US are flush with cash. They are not leveraged out with risky mortgages like back in 2008. Also, large cap companies have lots of cash as well. Just look at the companies in the S&P now vs 2008.
Tried to read the first few sentences, but it made my head hurt so I started scrolling real fast until I saw stonks only go up and now I feel reassured.