[dradernh]

Originally Posted by antzcrashing

What are other people doing/thinking?

1) Nothing (aka Sitting Tight).

2)

[chassis]

Originally Posted by RickFLM4

As I understand it, SIPC insures against the risk of a broker going under and not having access to your securities and cash. I don’t think SIPC insures against risk of loss of the investment, like a money market fund or other mutual fund. So while you are protected if the broker goes under and the risk of a money market fund holding short term investments is very low, there is still incremental risk vs. an FDIC insured deposit account, hence the higher return.

OK. What is your quantification of the incremental risk? You are saying it comes from the possibility of a money market fund breaking the buck, correct? You accept that risk of insolvency of the fiduciary is an SIPC-insured risk, correct?

[antzcrashing]

Originally Posted by dradernh

1) Nothing (aka Sitting Tight).

2)

I too have popcorn, my “netflix movie” is CNBC halftime and closing bell

[RickFLM4]

Originally Posted by chassis

OK. What is your quantification of the incremental risk? You are saying it comes from the possibility of a money market fund breaking the buck, correct? You accept that risk of insolvency of the fiduciary is an SIPC-insured risk, correct?

Correct. I am referring to the very low risk of breaking the buck, which is an acceptable trade off relative to return for most people. But it is not quite the same as an FDIC insured deposit and our exchange started about differences between MM fund and bank accounts and then SIPC vs. FDIC. I’m not saying or implying a MM fund is a bad idea or a high risk proposition, just that it is a security, which is different than an FDIC insured deposit.

[dradernh]

Originally Posted by antzcrashing

I too have popcorn, my “netflix movie” is CNBC halftime and closing bell

Yeah, as of today (still), I was probably a bit too flip with the popcorn meme.

We'll be lucky if the bailout doesn't have unpleasant ramifications at some point down the road. I may have missed it, but I'm still looking for a rationale the average American can buy. I don't expect that to happen; the players must all be hoping the issue just goes away.

At the risk of bringing politics into it, I was disturbed by yesterday's piece in The Intercept detailing what's now known about the nexus between CA Gov. Newsom, S.V.B., and the White House. Not surprised, though, unfortunately. Details here for those interested in the piece: https://theintercept.com/2023/03/14/...-hes-a-client/.

[chassis]

Originally Posted by NickyC

What?

https://www.cnbc.com/2023/02/03/us-c...-billion-.html

The consumer is employed, with improving sentiment.

Strong cash deposits.

DELQ and late payment data is at pre-pandemic levels or better.

The consumer is fine.

FRED has all the data for fact-checking purposes.

[ZHP to B58]

First Republic Bank was beat up way too much initially. Among other things, their lending practices & policies are some of the most conservative. I.e., our CRE policy dictates max LTV of 65% while theirs is something like 50%, if not even lower.

The rebound after the drop on the first day was nice.

Aside from that, just sitting tight on my allocations. Not keeping much liquidity. I see this as another buying spree.

Source: am a SoCal middle market banker

[NickyC]

Originally Posted by chassis

The consumer is employed, with improving sentiment.

Strong cash deposits.

DELQ and late payment data is at pre-pandemic levels or better.

The consumer is fine.

FRED has all the data for fact-checking purposes.

We’ll just agree to disagree. Rampant inflation at 40 year highs, wages not keeping pace, and record debt levels. The vast majority are seriously hurting.

In December 2022, consumer credit report found that total US consumer credit increased by just $11.565Bn, which was not only a huge, 65% drop from November's upward revised $33.1Bn print, but also a massive 50%+ miss relative to consensus expectations of $25BN, the biggest miss since August 2020!

Fast forward one month when consumer credit just stumbled for the second month in a row: in January, consumer credit rose just $14.8BN, a modest increase from last month's downward revised $10.7BN, but a huge miss to the median consensus estimate of $25.4BN.

This was the second consecutive big miss in a row, similar in size to the collapse observed in March and April 2020 at the height of the Convid scam. (Stats grabbed from ZH)

Banks are tightening lending standards and credit is drying up. Auto repos are rising, people are increasingly using CCs to pay rent, I could go on and on.

Just wait until the layoffs, the additional two trillion the Fed just pumped to save the latest round of gambling losers (ie their friends) won’t be enough. Then there’s the inevitable commercial real estate disaster which should start popping up any day now.

[antzcrashing]

Originally Posted by chassis

The consumer is employed, with improving sentiment.

Strong cash deposits.

DELQ and late payment data is at pre-pandemic levels or better.

The consumer is fine.

FRED has all the data for fact-checking purposes.

This isn’t a consumer issue, but the consumer is very very important. The consumer is less implied than the numbers show especially in California whicch is big GDP contributor. I think controlling inflation is the number one issue, and I think the Fed will use the wrong plan (not aggressive enough) causing inflation to become entrenched. The market will lag in realizing that, but the result will be downward marlet pressure. I am heavy in cash for those reasons.

Not a financial analyst nor any kind of expert.

I do not endorse my way of thinking, I just share it for discussion purposes

[chassis]

All ya'll realize inflation is trending lower, right?

NickyC agree on the disagreement. Lots of numbers floating around and it's important to know which are important.

ECB showed some cajones with the most recent rate increase. We will see what happens in two weeks.

[antzcrashing]

[antzcrashing]

Originally Posted by chassis

All ya'll realize inflation is trending lower, right?

NickyC agree on the disagreement. Lots of numbers floating around and it's important to know which are important.

ECB showed some cajones with the most recent rate increase. We will see what happens in two weeks.

Yes it was lower (6 percent) , but it will go up. And that is not anticipated by the broader market. Imo

[tgrundke]

Originally Posted by chassis

All ya'll realize inflation is trending lower, right?

Inflation in energy and goods has dropped. Inflation in services, however, is through the roof: 7.3%. Inflation has moved into the sectors of the economy which are really sticky.

Services is a huge part of the economy.

Long term trends that are not in our favor:

1. Credit will continue to tighten
2. Government debt costs are going to increase
3. Labor will continue to be tight with retirements, especially highly skilled trades
4. Government mandates will make energy production increasingly costly
5. Reshoring of manufacturing is accelerating, and is obviously more costly.

This is a small subset that doesn't even take into account what a small disruption in energy production would cause: supplies are running very tight, the US is exporting a lot of LNG and other distillates, and our foreign producers are striking new deals with China. One disruption and fuel costs will skyrocket overnight.

Never bet against America, but we've got a lot of long term trends that are not our friend that are going to keep inflation elevated longer for higher. I suspect rates will go higher than most expect.

So, rate of increase has slowed, but it's still more than double the target for "stability".

[antzcrashing]

Originally Posted by tgrundke

Inflation in energy and goods has dropped. Inflation in services, however, is through the roof: 7.3%. Inflation has moved into the sectors of the economy which are really sticky.

Services is a huge part of the economy.

Long term trends that are not in our favor:

1. Credit will continue to tighten
2. Government debt costs are going to increase
3. Labor will continue to be tight with retirements, especially highly skilled trades
4. Government mandates will make energy production increasingly costly
5. Reshoring of manufacturing is accelerating, and is obviously more costly.

This is a small subset that doesn't even take into account what a small disruption in energy production would cause: supplies are running very tight, the US is exporting a lot of LNG and other distillates, and our foreign producers are striking new deals with China. One disruption and fuel costs will skyrocket overnight.

Never bet against America, but we've got a lot of long term trends that are not our friend that are going to keep inflation elevated longer for higher. I suspect rates will go higher than most expect.

So, rate of increase has slowed, but it's still more than double the target for "stability".

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Love you bro, but you can’t just cherry pick the service inflation and say 💥 inflation is currently hot.

[tgrundke]

Originally Posted by antzcrashing

Love you bro, but you can’t just cherry pick the service inflation and say 💥 inflation is currently hot.

I get your point, but here's the thing with inflation: it's a very personal/emotional thing that changes behaviors.

If you need a new washer and goods inflation is up - inflation is hot. If your plane ticket to Orlando with the kids is 20% more expensive than last year - inflation is hot.

Services accounts for more than 70% of the economy and as a result its felt by a broader swath of the population: insurance, travel, hotels, movies, theme parks, dentists, veterinarians, etc.

[antzcrashing]

Originally Posted by tgrundke

I get your point, but here's the thing with inflation: it's a very personal/emotional thing that changes behaviors.

If you need a new washer and goods inflation is up - inflation is hot. If your plane ticket to Orlando with the kids is 20% more expensive than last year - inflation is hot.

Services accounts for more than 70% of the economy and as a result its felt by a broader swath of the population: insurance, travel, hotels, movies, theme parks, dentists, veterinarians, etc.

This is exactly the explanation I was looking for, 👍

Agreed.

Imo, service inflation is high, but I feel that goods inflation is just taking a short back seat. At some point the two inflation types will both be up and that will be a drag on the overall market

[ASAP]

You guys are aware that if the RATE of inflation slows... that doesn't decrease the prices, right? It just decreases the rate of growth... unless deflation happens (which is typically thought of as a bad thing), we are all poorer than we were a year ago, 2 years ago or 3 years ago... that is unless somehow your wage growth kept up or outpaced inflation. In most people's cases across the country, wage growth fell way back... so we are going to always be stuck with higher prices than before unless some mass contagion happens with layoffs, a total banking crash or something else.

[NickyC]

Originally Posted by ASAP

You guys are aware that if the RATE of inflation slows... that doesn't decrease the prices, right? It just decreases the rate of growth... unless deflation happens (which is typically thought of as a bad thing), we are all poorer than we were a year ago, 2 years ago or 3 years ago... that is unless somehow your wage growth kept up or outpaced inflation. In most people's cases across the country, wage growth fell way back... so we are going to always be stuck with higher prices than before unless some mass contagion happens with layoffs, a total banking crash or something else.

Or the best of all, stagflation. The most likely scenario unfortunately.

Inflation is transitory.

It's not a bailout.

2 quarters of negative GDP is not a recession.

The lies never stop.

[bagekko]

For luxury goods (cars, tvs, etc) yeah the old prices are never coming back, but if the economy craps out promos & sales will be larger. My buddies complain how much Milwaukee tools have gone up, some double in 4yrs, I tell them yeah its never going back.

Groceries are pretty stable but only because of shrinkflation; ice cream < 1/2 gallon, canned goods < 16oz, cereal boxes shrank, chip bags OMG theres nothing in there, waiting for 12oz & 2L soda shrinking.

Real estate has been dropping more in some markets than ever. Really hope nothing close to 2007-10 happens where 1/2+ of housing values gone.

Lower income wages have gone up a ton while others have not, 4ish years ago supermarkets, gas stations, fast food, very few started $10/hr. Now they can not hire people unless its $16-20/hr. With all the service wages going up a lot, then the price of everything will stay high, cause it will be very hard to ever lower those wages.

Plus you have to many dummy millennials living in their parents basement working some gig economy job on an irregular basis with no money.

But I think the economy is going to be very interesting once 1/2 the boomer population is gone, as the boomers generation starts to disappear I think the economy is going to struggle, thats in what 15 years? Part of what drove some of the luxury spending during the pandemic was all the old people dying of covid and then their kids spending the inheritance, my theory at least.

Originally Posted by ASAP

You guys are aware that if the RATE of inflation slows... that doesn't decrease the prices, right? It just decreases the rate of growth... unless deflation happens (which is typically thought of as a bad thing), we are all poorer than we were a year ago, 2 years ago or 3 years ago... that is unless somehow your wage growth kept up or outpaced inflation. In most people's cases across the country, wage growth fell way back... so we are going to always be stuck with higher prices than before unless some mass contagion happens with layoffs, a total banking crash or something else.

[srybicki]

Originally Posted by antzcrashing

I have moved to a more conservative 33% cash position in my portfolio.

I am just sitting waiting for SPY to go to 358, for my scoop move (SPY l, MSOFT, NVDIA)

What are other people doing/thinking?

Long spy via short put spreads
Long vix April 28/40 spread (spy hedge)
Short vxx as of yesterday (58 area)

About to sell some more UNG puts out in June.

[chassis]

The fear and gloom on this thread is a buy signal.

[eluded]

FRB at 19 and change the other day. Should have sold already?