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Thread: The Automation Spiral (obligatory loleconomics thread v2)

  1. #1081
    Kai's Avatar
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    Quote Originally Posted by Stormus View Post
    Repo markets seizing up is what caused the GFC to become such a big deal. Late last year there was another hiccup in the repo markets where interest rate on repos went from ~1.5% to ~10% in the space of 2 hrs and stayed there until the Fed said they would be the lender of last resort.

    Given the importance of repos and the repo market I'm not surprised that they are stepping in to ensure stability. The concerning thing is that they need to step in at all.
    Everything is fine.

  2. #1082
    Liare's Avatar
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    Quote Originally Posted by Keckers View Post
    I guess the biggest question is what this is all a symptom of
    low to zero interest rates driving increasingly risky investment and associated bubbles that are getting wobbly.
    Viking, n.:
    1. Daring Scandinavian seafarers, explorers, adventurers, entrepreneurs world-famous for their aggressive, nautical import business, highly leveraged takeovers and blue eyes.
    2. Bloodthirsty sea pirates who ravaged northern Europe beginning in the 9th century.

    Hagar's note: The first definition is much preferred; the second is used only by malcontents, the envious, and disgruntled owners of waterfront property.

  3. #1083
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    https://www.marketwatch.com/story/us...ond-2020-01-16

    WASHINGTON—The U.S. government will begin issuing 20-year bonds in the first half of 2020, the Treasury Department said Thursday.

    The Treasury said in October it was considering several possible new debt products, including a 20-year bond. The government has been looking for ways to attract additional investment, as budget analysts expect years of continued growth in federal budget deficits.

    “We seek to finance the government at the least possible cost to taxpayers over time, and we will continue to evaluate other potential new products to meet that goal,” Treasury Secretary Steven Mnuchin said.
    USA is at 104% debt to GDP ratio. Italy is at 134% and everyone has been speculating how long before their banking sector collapses for years now.

    Of course, then you have propaganda pieces like this claiming the debt is actually "nearly 2000% due to medicare and other entitlement programs". So of course, people with brains made of soft boiled eggs will believe it.

  4. #1084
    Keckers's Avatar
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    Interest rates are low so if you have the government borrowing to fund actually socially useful activity it's a no brainer.
    Look, the wages you withheld from the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord of Hosts. You have lived on earth in luxury and self-indulgence. You have fattened yourselves for slaughter.

  5. #1085
    Approaching Walrus's Avatar
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    Quote Originally Posted by Keckers View Post
    Interest rates are low so if you have the government borrowing to fund actually socially useful activity it's a no brainer.
    And who set those interest rates? The point I was making is that the US debt is unsustainable and the 20 year bond is another example of that. And we both know it's not like its being effectively used to fund things that will pay back to society like schools, healthcare, infrastructure, etc. Plus any money that goes towards those things gets embezzled away or vastly overspent due to corruption.

    Anyways I'd have some serious concerns about 20 year bonds if I was investing in that. The status of the US has been nosediving since 2000 and who knows where it will be in 2040?
    Last edited by Approaching Walrus; January 18 2020 at 12:01:52 PM.

  6. #1086
    Liare's Avatar
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    Quote Originally Posted by Approaching Walrus View Post
    Quote Originally Posted by Keckers View Post
    Interest rates are low so if you have the government borrowing to fund actually socially useful activity it's a no brainer.
    And who set those interest rates? The point I was making is that the US debt is unsustainable and the 20 year bond is another example of that. And we both know it's not like its being effectively used to fund things that will pay back to society like schools, healthcare, infrastructure, etc. Plus any money that goes towards those things gets embezzled away or vastly overspent due to corruption.
    no it's not unsustainable as long as you hold it in a currency you control.

    public debt is literately how money enters the economy, the government gets a service and issues a IOU that also counts as currency (namely government bonds), de-facto that means you are demanding a lowering of that ratio means shrinking the available money supply.
    Viking, n.:
    1. Daring Scandinavian seafarers, explorers, adventurers, entrepreneurs world-famous for their aggressive, nautical import business, highly leveraged takeovers and blue eyes.
    2. Bloodthirsty sea pirates who ravaged northern Europe beginning in the 9th century.

    Hagar's note: The first definition is much preferred; the second is used only by malcontents, the envious, and disgruntled owners of waterfront property.

  7. #1087
    Approaching Walrus's Avatar
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    The announcement posted on instagram by Steve Mnuchin

  8. #1088
    Approaching Walrus's Avatar
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    Quote Originally Posted by Liare View Post
    Quote Originally Posted by Approaching Walrus View Post
    Quote Originally Posted by Keckers View Post
    Interest rates are low so if you have the government borrowing to fund actually socially useful activity it's a no brainer.
    And who set those interest rates? The point I was making is that the US debt is unsustainable and the 20 year bond is another example of that. And we both know it's not like its being effectively used to fund things that will pay back to society like schools, healthcare, infrastructure, etc. Plus any money that goes towards those things gets embezzled away or vastly overspent due to corruption.
    no it's not unsustainable as long as you hold it in a currency you control.

    public debt is literately how money enters the economy, the government gets a service and issues a IOU that also counts as currency (namely government bonds), de-facto that means you are demanding a lowering of that ratio means shrinking the available money supply.
    Then go ahead and buy 20 year bonds if you're that confident, I think they will be worth jack shit in 20 years with how things have been going (because the value of the dollar is going to go down a lot)

  9. #1089
    Liare's Avatar
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    Quote Originally Posted by Approaching Walrus View Post
    Quote Originally Posted by Liare View Post
    Quote Originally Posted by Approaching Walrus View Post
    Quote Originally Posted by Keckers View Post
    Interest rates are low so if you have the government borrowing to fund actually socially useful activity it's a no brainer.
    And who set those interest rates? The point I was making is that the US debt is unsustainable and the 20 year bond is another example of that. And we both know it's not like its being effectively used to fund things that will pay back to society like schools, healthcare, infrastructure, etc. Plus any money that goes towards those things gets embezzled away or vastly overspent due to corruption.
    no it's not unsustainable as long as you hold it in a currency you control.

    public debt is literately how money enters the economy, the government gets a service and issues a IOU that also counts as currency (namely government bonds), de-facto that means you are demanding a lowering of that ratio means shrinking the available money supply.
    Then go ahead and buy 20 year bonds if you're that confident, I think they will be worth jack shit in 20 years with how things have been going.
    this is what pension funds do for a living, so i already have trough those. (or rather, the domestic equivalent)
    Viking, n.:
    1. Daring Scandinavian seafarers, explorers, adventurers, entrepreneurs world-famous for their aggressive, nautical import business, highly leveraged takeovers and blue eyes.
    2. Bloodthirsty sea pirates who ravaged northern Europe beginning in the 9th century.

    Hagar's note: The first definition is much preferred; the second is used only by malcontents, the envious, and disgruntled owners of waterfront property.

  10. #1090
    Movember 2011Movember 2012 Nordstern's Avatar
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    Oh, look. Someone gave voice to some of my concerns: https://www.reuters.com/article/us-d...-idUSKBN1ZJ1XX

    Question (Q) - Which countries do you find value in currently? Do emerging markets look appealing to you?

    Answer (A) - Absolutely. Our fund is currently net short the U.S. market, not because we don’t like the United States as a country, but rather, because we find twice the growth at half the multiple in Europe and emerging markets.

    Last year, the earnings of the S&P 500 .SPX were flat. Yet its price-to-earnings multiple (P/E) expanded from 14 times earnings to 19 times by year-end. People are paying more for less there today.

    As value investors, we are interested in paying less for more and are agnostic as to where we look for that opportunity.

    Q: What is your view on the FAANG group (Facebook, Amazon, Apple, Netflix and Google) of stocks, and in general, on U.S. tech valuations?

    A: Things can be popular or safe, but in my experience, they are rarely both. FAANG is popular, but it is expensive, which makes it dangerous.

    Today, the emerging market consumer is the “anti-bubble” to FAANG. For the market cap of Apple, you can buy every company in the four largest southeast Asian economies.

    It is not normal, nor rational, to believe one company has a brighter future than several countries combined.

    Q: What are your thoughts on quantitative easing’s (QE)impact on value investing?

    A: QE has distorted all valuations, not just in the public markets. With cheaper money, higher P/Es can be justified. But should they when you can still buy other markets at a discount with more growth and better yields?

    You might have to look farther and work harder to uncover value today, but the harder we look the luckier we get.

    Q: What is your view on the gradual fund flow from active investing to passive investing? Will passive flows eventually create more bubbles?

    A: Today over 50% of the market is held by passive investors; three companies comprise 80% of that market share. I worry that this is eroding price discovery. I worry that more and more people are crowding into a room, but the exit door is still the same size. We have seen them indiscriminately buy, but we have not seen them sell.
    Last edited by Nordstern; January 21 2020 at 06:10:20 AM.
    "Holy shit, I ask you to stop being autistic and you debate what autistic is." - spasm
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    WTF I hate white people now...

  11. #1091

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