Menu
Sister Sites

Options

Bookmark Thread

First Page First Unread Last Page Last Post

Print Thread

Similar Threads

securitiesNfinances - mostly equity/bonds/Taxes/Investments talk 17 replies

Global Macro Strategy 10 replies

Let's talk about gold - XAUUSD 42 replies

Attachments: Macro Talk
Exit Attachments

Macro Talk

Quoting auricforecas
BTW assuming you are correct, imagine you are a politician with a term of 4 years and KNOW what is happening. What do you do?
That's a really good question... If I were POTUS and trying to boost the economy, I'd probably look at some of the following:

  1. Pass legislation expanding the Fed's powers to buy securities. Right now this is a legally gray area that needs to be cleared up.
  2. National high-speed rail. (hyperloop, maglev, etc.)
  3. Rebuild the airports. (US airports are nowhere near as nice as many airports in Asia.)
  4. Subsidies for clean energy projects.

R&D investment boosts productivity which is really what we should be striving for. Some sort of Federal angel investment program could pay off big in the long run, but I have no idea how it would be implemented.

What would you do auricforecas?

Quoting auricforecas
{quote} It feels like markets do not know how to react to it... About the expansion... You could ask yourself what expansion would be really had for the last 10years if the DEBT would stay nominal... BTW assuming you are correct, imagine you are a politician with a term of 4 years and KNOW what is happening. What do you do? Take some more debt and kick can down the road, handling the problem to the next guy... Or SOLVE the situation aka preventing potential disaster down the road, for future generations and become the fall guy and hated by the most...
Debt really isn't a problem unless interest rates go up. If they go up then the US and other nations will have to greatly curtail their spending.
Self-sufficiency is the greatest of all wealth. - Epicurus
Quoting EF5
That's a really good question... If I were POTUS and trying to boost the economy, I'd probably look at some of the following: Pass legislation expanding the Fed's powers to buy securities. Right now this is a legally gray area that needs to be cleared up. National high-speed rail. (hyperloop, maglev, etc.) Rebuild the airports. (US airports are nowhere near as nice as many airports in Asia.) Subsidies for clean energy projects. R&D investment boosts productivity which is really what we should be striving for. Some sort of Federal angel investment program could pay off big in the long run, but I have no idea how it would be implemented. What would you do auricforecas? {quote} Debt really isn't a problem unless interest rates go up. If they go up then the US and other nations will have to greatly curtail their spending.
Probably, at current conditions (or "options") and everything, I would spend/"stimulate" it but not in some abstract form like giving money to banks (for example) for speculation but as NEWDEAL2. So "worst case", there would be new roads and bridges instead of maybe money wasted in some scheme/speculation In the long-run would probably stimulate BABYBOOM2 But.. if we are talking 4-term, I believe NEWDEAL2 would bring fast and seen effect At the tools available I think that could be made/sold/accepted best .

Because from what I observed... If you do "austerity", people do not like... Yeah, "some" do not like increased debt, at least in the long run.... So what I have observed is that people seem to tolerate increased debt, if they SEE (directly, "obvious" instead of in some abstract form) how it was spend (like new stadium - for games, new bridges, roads, buildings (public)) etc .
Can you afford to take that chance?
Quoting auricforecas
{quote} Probably, at current conditions (or "options") and everything, I would spend/"stimulate" it but not in some abstract form like giving money to banks (for example) for speculation but as NEWDEAL2. So "worst case", there would be new roads and bridges instead of maybe money wasted in some scheme/speculation In the long-run would probably stimulate BABYBOOM2 But.. if we are talking 4-term, I believe NEWDEAL2 would bring fast...
Good idea on the investment scheme. All great ideas actually.

I forgot to mention this earlier, but lower taxes. Lower taxes + higher spending would blow up the budget, but it should revive the economy for the mess we're getting into.
Self-sufficiency is the greatest of all wealth. - Epicurus
Unemployment claims jumped by 70k today! Game over guys, we are in a recession.
Self-sufficiency is the greatest of all wealth. - Epicurus
Quoting EF5
Unemployment claims jumped by 70k today! Game over guys, we are in a recession.
Well but this corona totally distorted the reality now so the question is how many of this was due to corona and which continent will suffer more because of it and how long... Meanwhile central banks are slaughtering rates, stimulating as crazy (we do not talk about billions anymore, just trillions) and people like it this time, since counter measures to corona are expected.
Can you afford to take that chance?
Quoting EF5
Game over guys, we are in a recession.
Exactly what you've been talking about for a few months now has happened! Nice one EF!!

I was a lot more optimistic, i didn't expect things to go south this fast.

It's very interesting how a natural event like a pandemic occurs "at just the right time" when the market is at a critical point, this has been happening throughout history, nature's very interesting.

As for my outlook right now, I'm not quite sure what to do, we're getting so much stimulus and so much money "is being printed", but the pandemic in the US will likely be much worse then we expect.

The cruise line companies look like a lucrative deal, especially Carnival which dropped almost 75%. It's the biggest of the bunch and has the best financials. Carnival has already begun to finance an additional 7B to get thrhough this time, it also has a 43% debt ratio, not bad. They still have a very good balance sheet with an additional 7B in additional debt.

As for the economy as a whole, this will probably not have as long lasting effects as we might imagine. I'll be monitoring china to make conclusions, even though that might not be the best idea considering that half of their data is made up. This will be an interesting experience in 10 years time, i wonder what we'll be saying about it then.


In croatia over 20% of our GDP is tourism, so we will have it very hard in that sector, but i don't think it'll last. Some major tourist companies who've lost over half of their value will probably be my investment of choice in September (after this tourist season fails horribly).
Long term profits are inversely proportional to leverage
Quoting Vorenzd
{quote} Exactly what you've been talking about for a few months now has happened! Nice one EF!! I was a lot more optimistic, i didn't expect things to go south this fast. It's very interesting how a natural event like a pandemic occurs "at just the right time" when the market is at a critical point, this has been happening throughout history, nature's very interesting.
Thanks Vorenzd! I can't really take credit for calling this. I think we were going to have a recession with or without Covid-19, but it accelerated the timetable for everything. I was expecting a recession in h2 2020 so I wasn't positioned well for this.

Quoting Vorenzd
As for my outlook right now, I'm not quite sure what to do, we're getting so much stimulus and so much money "is being printed", but the pandemic in the US will likely be much worse then we expect. The cruise line companies look like a lucrative deal, especially Carnival which dropped almost 75%. It's the biggest of the bunch and has the best financials. Carnival has already begun to finance an additional 7B to get thrhough this time, it also has a 43% debt ratio, not bad. They still have a very good balance sheet with an additional 7B in additional...
I'm with you on not being sure what to do. Equities dropped 30% in a few weeks so it's very difficult to compare this to anything historically. Without history as a guide I don't have much of an edge here. Logically it should be awhile before the market finds a bottom, but this time is too unique to really have any conviction behind that premise.

Quoting Vorenzd
As for the economy as a whole, this will probably not have as long lasting effects as we might imagine. I'll be monitoring china to make conclusions, even though that might not be the best idea considering that half of their data is made up.
That's smart, China and South Korea are the furthest ahead so watching them could serve us well in accessing how the rest of the world will recover.

Regarding economics, policymakers as a whole have done a very good job so I'm optimistic on the economy. I'm still wary of the Eurozone since there's no mechanism for joint debt, but it I've underestimated their ability to manage a crisis in the past so they might be able to get through this one too. Regardless, its hard to see how there can be this big of disruption and everything just goes smoothly. Some nations with dollar denominated debt should be in a lot of trouble right now, there's a bank out there with a balance sheet problem, and somewhere else there's a ponzi-scheme about to unravel... There's going to be more collateral damage from this before its all over.

Quoting Vorenzd
In croatia over 20% of our GDP is tourism, so we will have it very hard in that sector, but i don't think it'll last. Some major tourist companies who've lost over half of their value will probably be my investment of choice in September (after this tourist season fails horribly).
Investing locally, I like it.

On a somewhat unrelated note, I heard you guys had a serious earthquake recently. Everything okay?
Self-sufficiency is the greatest of all wealth. - Epicurus
Quoting EF5
there's a bank out there with a balance sheet problem, and somewhere else there's a ponzi-scheme about to unravel... There's going to be more collateral damage from this before its all over.
Yeah, a lot will happen soon. It'll be pretty bad for some people, but i guess the system did need some purging of such institutions.




Quoting EF5
On a somewhat unrelated note, I heard you guys had a serious earthquake recently. Everything okay?
There was a series of earthquakes in Zagreb, with a few of them being around 5.4 richter, the highest in over 140 years. The problem is that it hit really close to the city, and in the city centre of Zagreb all the buildings are really old (19th century/beggining of the 20th century), and it's very hard to renew them since they are protected as historical heritage. So people didn't really invest in the buildings and the City itself didn't invest in it's property since any investment and maintance is very expensive as you have to obide really strict conservator rules.
Lots of buildings and cars were destroyed or deemed unsuable.

Around 5000 people were left homeless, one person died. The good thing is that this has happened during quarantine, so everyone was at home and didn't get burried on the streets or in Churches (most ceilings of churches collapsed). Luckily the government has also found a temporary home for all of these people.

There were even worries that a nuclear power plant in Slovenia (it's a joint project between Croatia and Slovenia, 50-50) has been damaged by the earthquake. That powerplant, Krsko, is also regarded as one of europe's worst kept reactors.

I'd also like to point out that the earthquakes in Zagreb have yet not stopped, even to this day there is a 2-3 richter earthquake every day, and that sparks worries that another large one might come soon. There have also been reports of large holes opening in the ground around Zagreb.

We will see how the situation develops, right now they are handling it very well.

I'm good,I didn't even feel the earthquake, i live on the Dalmatian Coast which is around 500km away. Over here we were not aware of it until we saw it on the news.
Long term profits are inversely proportional to leverage
  • Post #69
  • Quote
  • Last Post: Apr 7, 2020 10:36pm Apr 7, 2020 10:36pm
Quoting Vorenzd
{quote} Yeah, a lot will happen soon. It'll be pretty bad for some people, but i guess the system did need some purging of such institutions. {quote} There was a series of earthquakes in Zagreb, with a few of them being around 5.4 richter, the highest in over 140 years. The problem is that it hit really close to the city, and in the city centre of Zagreb all the buildings are really old (19th century/beggining of the 20th century), and it's very hard to renew them since they are protected as historical heritage. So people didn't really invest in...
Wow, that’s a lot worse than it sounded in the US media. I’m glad you weren’t affected by it!
Self-sufficiency is the greatest of all wealth. - Epicurus
0 traders viewing now