Evening lads. This is my first post on /biz but I am a frequent participant over at /pol. My background is in private finance (mainly mid-cap private equity as a deal principal/investor), but I have also worked on prop trading and as a MD at an international family office. As such, I have seen virtually all aspects of private assets, public risk and non-risk assets, standard and sophisticated credit instruments. My current thesis is very straightforward: The global cap markets on the verge of freefall, as well as several of the major reserve currencies.
-Corp debt is 2x what it was in 08 -Household debt is 2x 08 -Government debt globally is 3x -CB balance sheets are 5x 08 -Yield curves are flat and the Treasury has to have it's largest bond offering in Oct at the same time the Fed is increasing rates and the pace it's normalizing it's balance sheet -All the large global buyers of T bills have begun to normalize their balance sheets causing low bid-to-cover ratios in recent offerings (in March the dealers had to warehouse 1/3 of the offering to close it) -When the Fed inverts the yield curve, they will not be able to continue with BS normalization and the dollar will begin to go. -They will raise rates higher and that will knock over every bond market globally -22% of US equities will not be able to service their debt with a 200bp move in rates -Instead of investing their record earnings in PP&E, debt service, R&D, etc., they have invested heavily in levered buybacks and high-multiple transactions. -Japan is fucked, Russia is fucked, China is fucked -Emerging markets are currently going down the drain and the IMF can't bail out all the ones that will slide -Deficit to GDP is humongous in the US going into late cycle will
These should all start as fodder for the conversation. Currently, my calculations show asymmetric risk to the downside, and I didn't even mention the illiquidity that will happen instantaneously when the markets go because of derivative risk.
In a decade after the entire eurozone has been cannibalized economically to put off the economic seppuku of the US these calculations will still mean jack shit.
Buy crypto and stay in private finance.
Jacob Miller
crypto is a classic bubble man
Evan Baker
Also if you need a job in ten years, learn mandarin. If you are a millionaire or better in ten years, learn spanish.
Camden Jackson
you are just saying shit everyone has already known for years
Get over it, the economy is booming, china is irrelevant
Gabriel Sanders
I've never had a job and never will
Caleb Morales
reads like a larp. should have proof read before posting.
thoughts on gold and silver? other precious metals?
Jacob Cruz
>"yield curves will invert" >>"reads like larp" >ok fagit
gold = good. the only real insurance plan.
Turkey was the canary in the coal mine, Argentina went today with a 60% rate increase. Brazil, India, Russia are next.
Carson Hernandez
i have a bunch of noob questions. i have a minor in finance, CFA level 1, but don't understand many of the things in the post
what are your sources? did you calculate all of this stuff yourself?
where can i read more about yield curves and their effects on the market? >yield curves are flat aren't they rising, the 10yr yield rose to above 3% a few months ago? >normalizing it's balance sheet >inverts the yield curve what do each of these mean and how do they signal an economic collapse?
>CB balance sheets >CB what acronym is this? >balance sheets which part of the balance sheet? total assets? how is increasing total assets bad?
the yield curve will invert meme is pretty well known and has been referred to in the economist and other print media lately.
but what specifically stands out for me is the grammatical errors and exaggerations, such as: >At the same time the Fed is increasing rates and the pace it's normalizing it's balance sheet >Currently, my calculations show asymmetric risk to the downside >in the US going into late cycle will
at best you probably read zerohedge. but i could be wrong, say something specific and interesting that only you know.
Gavin Powell
B-but we're due for a crash. We have to relive the apocalyptic good old days of 2008. I need excitement in my meaningless life!
Levi Howard
All I know is that the US will be fine after the rest of the world collapses
Josiah Wilson
>Japan is fucked, Russia is fucked, China is fucked >Russia is fucked
Lol. No kid. They are not. They have one of the lowest government debts in the world and as long as Europe needs oil and gas, I'm pretty sure Russia is gonna be okay.
CB = central bank CBs adding to their balance sheet is a function of a market not functioning properly and needing central bank support to asset prices and monetary supply. an example is the Fed engaging in QE1-3 and buying bonds through the FOMC to prop up the Treasury issuances and mortgage-backed securities. The fed ballooned its balance sheet in an effort to support prices in these markets because there wasn't sufficient demand. If they have not, it would've been financial Armageddon. CBs only step in with asset purchases if there is a problem. The fact that virtually every CB has 5-6x their balance sheet in the past 9 years and dropped rates through the floor shows A) fundamental weaknesses in the global economy, and B) creates huge risks for their local economies if they go into a recession... The fed can't buy another $5bn in assets if we go into a recession because it will destroy the dollar.
Brayden Wood
its a gold shill thread guys Sage and hide Sage and hide OP is a faggot commie
short the Swiss Franc. their balance sheet is 127% of GDP and they have $100bn of their balance sheet in US equities (15% of GDP) and in super high multiple stocks. Ex: They own more of the publicly-traded stock of FB than Zuck.
James Bell
you should've kept reading, he didn't mention Hitler or the Jews even once.
Zachary Murphy
Actually gold will be a pretty good buy next year earlyish.
Juan Bennett
not a gold thread. I don't have much gold. I prefer to make measured investments short on assets I think will sink and value invest LT in companies that will create value over 10+ years.
Daniel Hughes
thats a fucking ballsy call, the swiss franc has been a go to for safety historically...then again, so was housing in 08
Joseph Morales
>largest debtor nation in history will be fine
lol good meme friend
Cameron Johnson
When there's a thread on Jow Forums and other boards daily going "MUH ECONOMIC COLLAPSE!" it means there isn't one coming. These threads point out "knowns". Knowns don't crash markets, unknowns do----black swans.
Ethan Lewis
it's a straightforward position in my opinion. to win in investing, you must bet against the mainstream and be right. the mainstream is not there. investing 20% of a CBs balance sheet in equities and half of that in high-multiple US equities is assinine and will destroy the Franc if we have a recession. Instead of exiting much of their positions this year, like the few other CBs with equities, they have doubled down.
Adam Thompson
If debt accumulation simply DECELERATES the economy will enter recession, if it merely STOPS, we enter a depression, if it REVERSES we enter a deflationary hyper-collapse
get fucked eurocuck How mad are you that the spx is at all time highs
Easton Anderson
bad logic meme m8. you ever read any basic logic or philosophy?
Jordan Gomez
What market crash was expected by MOST people? Not a minority in the know.
Luke Miller
ok ill bite. is crypto a new asset class or is it just a meme? be real, I can see it being a second type of commodity type of asset class and see its potential but how long would a new bubble take to form and for things to take off? also how soon will it take for the equities market to crash? I'm 29 and made 50-100k off of crypto last year but feel unsafe leaving it in cash/crypto if crypto wont be bullish for another year or so.
Jonathan Williams
to be honest, I dont see that playing out just yet. First i see EM's getting crushed and a flight to safety in the US dollar/equities, which may cause a further pump to mania levels.
But good to know that the swiss are over exposed to US equities, I'm just not sure US equities are just at the point of vulnerability yet. EM's though are for sure going to have a tough time this year, and next.
Jason Garcia
this.
back to Jow Forums faggots
Levi Kelly
> I read zero hedge and im fucking smart yet another episode of this austrian bullshit
Cooper Baker
there won't be. even with rising rates Japan, Russia, China, Canda, Mexico, the Fed and a few of the other largest Treasury bond holders have been selling their position, not buying more. When the US goes, there isn't going to be a flight to the USD.
Jordan Morgan
where's the value-creation of cryptos other than an unregulated tool for speculation?
Jayden Martinez
Meme creation
Nathaniel Morris
I'm a noob with no finance knowledge.
1. Where do I start to verify that the franc is actually exposed to the risks that you say it is?
2. Assuming your facts are correct, that the cb holds too many US stocks, what's your argument for why that will be bad for the franc?
3. How the hell does a normal person short the franc?
I know how that if I want to buy some individual stocks I can go to Robinhood. I don't because I'd rather hold an index fund in my 401k, but I know that's where to go.
Where do I go to short the franc and how do I do it in a way that will give me exposure to massive upside and limited downside if the franc tanks?
Should I just try to find a place that sells options and buy put options? Never traded options before.
Andrew Evans
storing and transfering value all over the world almost freely and instantly with no kike oversight, the ultimate store of value inb4 >hurrr durr store of value doesn't lose its value by so much he he because it's still new, gold uses its value too if you buy at the wrong time
also buy LINK and never worry about muh collapses again
Jonathan Ortiz
sigh....
ok i'll bite...how much are you selling gold for? what's the spot price of the gold you sell.....
>bubble Doesn’t understand crypto. Fuck off to plebbit and Jow Forums
Ayden Ortiz
>took a 75% price reduction in under 12 months and thinks its a viable asset class lol next
Angel Diaz
Wow, you weren't kidding. They really are holding a ton of big US tech stock.
So I guess if the SNB holds US equities and the price of those equities falls... The franc is worth less because? Is the franc theoretically backed by it's reserve currencies, of which the USD is one, with a significant proportion of their USD reserves being in US tech stocks? So a fall in tech stock prices is, in theory, a fall in the value of (one of?) the currencies backing the franc, which implies the franc itself will be worth less, possibly proportionally to the decline of the reserve value?
Joseph Hernandez
most of the serious funds and asset managers already exited. why do you think there's no price support? and no I don't ever see it becoming viable. CBs and Govs won't ever let it become the main currency so it will always be highly volatile. Volatility = death for a currency
Kevin Flores
We had a near-recession in 2016. Trump winning bailed out the system. Once the high of a multi-trillion dollar tax cut wears off, there is going to be a major reckoning.
2018 might be the last "normal" year. We're going to see some shit.
Dylan Johnson
agreed on both
Ian Phillips
>he he it went from $10 to 50c, see? I was right? >oh what do you mean it went to 20k after that? it's a speculative evil bubble! I'm too smart and too proud to participate in it, instead I will pretend like I'm a smartass calling for a financial collapse every month
I hear lunatics calling for the worst global crisis every day, housing bubble, stock bubble, fiat collapse, yea sure gonna happen
Brody Gomez
if there's a further correction in US equities, the SNB will accumulate losses. as the central bank of their currency accumulates losses, there will be a flight of money from their currency to more sound currencies.
Nathan Thompson
all you guys investing in crypto are stupid. money wont meant anything. the near future is just who has the child sex slaves and who has the guns. pro tip its the same guys. every one else pays them food in america or your chilrens are taken
Are Turkey and Argentina the first dominos to fall?
Also what are your thoughts on the chances of a hard Brexit just flushing the system? Democratic win in November?
Henry Richardson
> well written post regarding actual world business and finance > disregarded because they're scared of potentially being exposed to thoughtcrimes and "muh raycisms" Imagine being this much of a spineless little rat. Go drink some drano.
Nathan Ortiz
In your opinion, is Gregory Mannarino's youtube channel reliable?
Andrew Taylor
Thank you for this, btw.
Looking for places where the mainstream is wrong and betting against them is what I have been trying to sk but I only see crypto as an opportunity to do that. E.g., everyone - even almost everyone who thinks Bitcoin is legit - thinks altcoins are shit and scams. So if I can find altcoins goals that seem like they could drive demand for the coin very high and a team that seems to have a reasonable level of competence (and funding) then I could be looking at returns similar to what Bitcoin provided to early adopters back when even internet crazies thought Bitcoin was a joke without value.
Sadly, I don't know where to look for other things. E.g., I have no idea what kind of background knowledge would have led to me to look at central bank reserves to try to suspect the Swiss franc might be vulnerable.
So thank you again, this is super cool to think about.
Mason Bailey
Live in a third world shithole, but fortunately my local currency hasn't been hit as bad as the other ones. Should trade everything to USD asap?
careful and DYOR. its not as rare of a position as you think.
Hudson Wright
This makes sense. Thank you!
Brayden Rogers
whats that pic getting at?
Ryan Ramirez
Were there FT articles like this about the US housing market leading up to the 2008/2009 housing crash?
Dylan Bell
>"CBs and Govs won't ever let it become the main currency" I don't think this /pol fag knows the origins of cryptocurrency and why it is a thing to begin with......
This board needs more thread like this and less bullshit r9k tier larping and coin shilling
Xavier Fisher
if they don't become the predominant currency they hold no value. they're just a tool for speculation.
Joshua Robinson
I bought swaps on a currency that's a large % creditor nation and trading under valued to Franc
Carter Bailey
This.
To expound on yield, inverted curve means imvestors have lower confidence in the future. Hence why they end up accepting lower returns, even tho typically they wud demand higher return with uncertainty oftime.
Juan Fisher
You sound like a Bible thumper
Nicholas Williams
How do you not see value in being able to freely transact outside of traditional methods? Methods controlled by banks and governments?
Colton Anderson
Its up to you to determine how much of it is legit vs anons just wanting to see the world burn.
Julian King
because no takes it as a method of payment and never will because it's too volatile
sorry man. even though you seem well versed on traditional finance topics, you have a pretty dim and almost boomerish ignorant view on cryptos. i was expecting a much more solid argument
Kevin Jackson
So I'm about to get a 200k inheritance. Where do I park it
typical crypto cunt response. no rebuttal of fundamentals - straight to ad hominems!
Noah Cook
ok whatever you say Anton
Benjamin Howard
You talk a big game but there is only maybe a 70% of you being right. You are one of yhose guys who pretend to be super confident and talk like everything is 100% guaranteed but everything you talk about is only conaidered an indicator with no real evidence of a direct correlation.
Asher Nelson
I'm having a panic attack I can't even get a job now
Brandon Hernandez
Thoughts on Russia supposedly buying a shitload of Gold? Also answer this pls:
So what i'm taking away from OP's brainlet post is
* forex Short the swiss franc * buy gold (OP is prob gold shill) * expect recession 2019 - 2020 just in time for election season
Jose Russell
>What is Newegg
Ethan Kelly
So spell it out for me i cash out my mutuals and stocks and sit in gic? Or straight cash while.it crashes then scoop.the indexs like it was march 9th 2009 all.over again. Helpful advise please for m someone w only 60k invested
Anthony Rogers
>i don't hunt: the post
Xavier Cox
You're the same kind of small mind that would have said the internet was useless outside of porn and criminal activities in 1994
I went to the hospital for a panic attack once in uni now I'm marked. I never should have trusted them but it was the first one and I thought I was having a heart attack.
Camden Walker
>he doesn't have a significant other with funs Don't you have a crazy uncle or something?
Nathaniel Mitchell
bet you have no idea that the bitcoin network consumes more energy than 1/3 of the worlds nations and will exceed the US entire electricity consumption in 18mo at current pace do you?
Chase Harris
>stupid bitcoins. >wont be used by anyone or accepted by merchants. >muh wasteful energy meme
>2018 might be the last normal year They've been saying this since trump got elected, i don't think saying this more times is going to make it any more true.
James Wood
Great, we can change that by going NUCLEAR or building fuckheug dams. Electricity is food for crypto, so the more electricity and the cheaper it is, the better for coins.
Connor Cooper
You sound like that was something you just learned
