Down goes the Dow

bitcoin price movement looking very unfavorable at the moment. Not sure how i would be taking that if i were a hodler.

Oh, snap! wrote:

butt fumble wrote:

https://imgur.com/a/F14NhJ0

Oh, snap!

Oh, you just crapped....

Ghost of Igloi wrote:

la gente esta muy loca wrote:

Where are you getting this $7 Trillion in QE number?

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

That's just their assets, where's their liabilities. I find it amusing you'll rave about MSFT and APPL's liabilities but not their assets and with the Fed it's the exact opposite. (Not to mention you talk about investing in XOM, a company who's destroying their balance sheet by slashing CAPEX and taking on more debt, just to save their dividend.)

I'll walk through this one more time. Here is the Fed's balance sheet from last Wed.

And from Feb 27 of this year

Assets, total factors supplying reserve funds increased from $4.206T to $7.291T; with securities held outright increasing from $3.848T to$6.638T. Liabilities, reserve balances with Federal Reserve banks increasing from $1.680T to $3.033T and total factors, other than reserve balances, absorbing reserve funds; $2.526T to $4.259T; $7.291T total (rounding). Of which, the Treasury General Account (Treasury's checking account) increased from $387.6B to $1.547T and currency in circulation increased from $1.800T to $2.060T were the main contributors. So, with factors other than reserve balances, most of which the Fed has no control over, increasing $1.733T, assets would have to increase by same amount. That would give us $4.206T + $1.733T ($4.259T-$2.562T) = $5.939. The Fed must have $5.939T in assets to offset their $5.939T of liabilities, liabilities of which they have almost no control. One might say than the increase in reserve balances with Federal Reserve banks of $1.353T is QE. However, while some of this might be construed as QE as implemented in the past, there is a new wrinkle, Basel III and Dodd-Frank. By increasing reserves, the Fed creates more High Quality Liquid Assets on bank balance sheets, thus, in theory, increasing the banks capacity to take on more loans.

Re XOM, before you start, what about APPL and MSFT taking on debt to buy back stock, there are some significant differences. First, they did not cut back on R&D and CAPEX. Second, they were undertaking tax arbitrage. Instead of "bringing home foreign profits" and paying US taxes, it was cheaper to take on debt (interest is tax deductible) to pay for SOME of their capital returns. After tax changes in 2017, this arbitrage became irrelevant. They, and others engaged in this practice, stopped increasing debt and many began reducing their long term debt.

QE in the past was basically the Fed signalling, by having skin in the game, their commitment to keeping SHORT TERM RATES low for an extended period of time.

Interesting take on how aaple and microsoft use debt resourcefully. in this age of historically low interest rates

Anyway, as for the evolving bitcoin trade: not for the faint of heart. Glad i missed this one. Down 13% in the last 24 hours.

gente > Igy

We’re just about to head out on our long run, and this thread came up.

I bought $100 of bitcoin through PYPL a few days ago as a test, now my balance is 89.77. Again, some bulls like Pal have been predicting a retracement to ~12k, so I’m eager to see if such a move might have started.

Fun-looking post by gente, will make some enjoyable reading tomorrow. Happy Thanksgiving!

The FED liabilities belong to you and me. I don’t find it strange that the Fed tried to reduce the balance sheet one time, and the market promptly dropped 20%. It is equally clear that the Fed is in a box, where they have to continue to manipulate policy in rising amounts, and ever twisted gyrations (Operation Twist, Junk bond ETF buying, or threat thereof) to generate a unit of GDP growth.

In regards to AAPL they have fractional revenue growth since 2015, and EPS growth driven by stock buybacks (thanks to the Fed). MSFT has a good cloud business, but has honed its financialization game under Nardella. Both are excellent at hyping a narrative. XOM biggest sin was paying too much for oil and gas assets that had to be written down with the fall in oil prices, those asset values moved the other direction the last few weeks.

It cannot be denied that if the Fed stopped buying bonds the stock market would collapse. Equally so, an end would come to all the stock buyback program that survive only on cheap money. If a market price is applied to mortgage interest home prices contract. The same link exists to rising price of stocks and bonds. Of course it all works if one can continue peddle assets off to someone else at ever rising prices, which only works hand in hand with continued faith in Fed manipulation. That is the key, faith, the confidence in Fed control.

butt fumble wrote:

gente > Igy

^read and weep

Maserati wrote:

We’re just about to head out on our long run, and this thread came up.

I bought $100 of bitcoin through PYPL a few days ago as a test, now my balance is 89.77. Again, some bulls like Pal have been predicting a retracement to ~12k, so I’m eager to see if such a move might have started.

Fun-looking post by gente, will make some enjoyable reading tomorrow. Happy Thanksgiving!

Honestly, bitcoin commentary seems a good fit for Sven Heinrich. Both are unhinged.

Outside of that, not so much,

BTW bitcoin bumping the lows 16,000s as a few hours ago and not much off of that now. Seems strangely convenient that this happens over a holiday and while the Bitcoin trust is closed so that investors cannot react. May just see that 12,000 support level by the time the market open on Friday.

“The fool walk down stream, end in quicksand.”

—Wang Hung Lo

seattle prattle wrote:

Honestly, bitcoin commentary seems a good fit for Sven Heinrich. Both are unhinged.

Outside of that, not so much,

BTW bitcoin bumping the lows 16,000s as a few hours ago and not much off of that now. Seems strangely convenient that this happens over a holiday and while the Bitcoin trust is closed so that investors cannot react. May just see that 12,000 support level by the time the market open on Friday.

And the “investment” perfect for you.

Ghost of Igloi wrote:

seattle prattle wrote:

Honestly, bitcoin commentary seems a good fit for Sven Heinrich. Both are unhinged.

Outside of that, not so much,

BTW bitcoin bumping the lows 16,000s as a few hours ago and not much off of that now. Seems strangely convenient that this happens over a holiday and while the Bitcoin trust is closed so that investors cannot react. May just see that 12,000 support level by the time the market open on Friday.

And the “investment” perfect for you.

That was a particularly odd thing to say, Igy, I was going to word it more harshly but perhaps i am misinterpreting you.

seattle prattle wrote:

Ghost of Igloi wrote:

And the “investment” perfect for you.

That was a particularly odd thing to say, Igy, I was going to word it more harshly but perhaps i am misinterpreting you.

Seattle,

Sorry, just messing around. Hope you are having a good Thanksgiving. I just finished a five mile walk around a closed golf course.

Igy

seattle prattle wrote:

Ghost of Igloi wrote:

And the “investment” perfect for you.

That was a particularly odd thing to say, Igy, I was going to word it more harshly but perhaps i am misinterpreting you.

Stupid is as stupid does.

Ghost of Igloi wrote:

seattle prattle wrote:

That was a particularly odd thing to say, Igy, I was going to word it more harshly but perhaps i am misinterpreting you.

Seattle,

Sorry, just messing around. Hope you are having a good Thanksgiving. I just finished a five mile walk around a closed golf course.

Igy

You, too. Must be cold over there. Be safe for the big meal. You certainly know how that is not to be taken for granted.

-SP

Seattle,

As I mentioned to an earlier poster, if I was concerned about currency debasement I would rather be in commodities or precious metals.

Igy

With bitcoin - here's the rub: investors pour in becuase they think it is the digital currency of the future. But the market for it is so at the whim of a relatively small number of whales and other speculators that it gets played in epic fashion. . And when they see half their nest egg reduced in just a matter of days, they cut their losses and become the latest round of suckers.

Understood about other contrarian strategies but like bitcoin, those have never worked for me when i tried, so i don't.

BTW, yesterday was a good day for tech., and that's my hussle.