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Is a recession coming? Sell stocks? (1 Viewer)

waddadonk said:
Key inverse indicator on options plays here
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Reminds me of when I quit playing in the underground clubs in NYC: right after I saw at the club the most dbaggy, indiscreet person I knew. That was it for me. The club was raided not too long after.
 
I'm selling a paid-off house to liquidate cash to be ready to invest in the market when it crashes. This Virus is going to inject instability for the next year and the effects on our economy, like turning an oil tanker, will take months to manifest. I am gambling on much worse ahead for the markets. Especially with such a divided Presidential election ahead. Pure chaos and instability ahead. I want to be sitting on a lot of cash to be able to jump in on the other side of the drop. It will fall fast and rise slowly but I need to sell my home now before it happens and there is still a seller's market in real estate.
 
dajebriza said:
I'm selling a paid-off house to liquidate cash to be ready to invest in the market when it crashes. This Virus is going to inject instability for the next year and the effects on our economy, like turning an oil tanker, will take months to manifest. I am gambling on much worse ahead for the markets. Especially with such a divided Presidential election ahead. Pure chaos and instability ahead. I want to be sitting on a lot of cash to be able to jump in on the other side of the drop. It will fall fast and rise slowly but I need to sell my home now before it happens and there is still a seller's market in real estate.
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Wow. That's hugely bold.
 
Any other silver bugs here??

381EDCD2-716F-412F-A205-82C8BE96EA28.jpeg


Hi-yo, Silver! Away!!
 
The markets are in amazing shape. The Nasdaq hit another record high this week. The S&P 500 is within 1% of its all time high. Keep in mind we saw just under a ten percent contraction in the economy in the second quarter. Unemployment might be going down, but it is still at 1930's levels. Yet the markets are unphased.

It isn't just the equity markets. We see similar strength in the treasury market. And as @justsomedude noted above, the metals are also at record highs. Gold is over $2,000 per oz and silver is over $28 per oz. Even the crypto currencies are showing strength though not records yet.

So what gives? I think we are witnessing a titanic test of strength. On one side we have the economy in free fall and on the other side we have the US treasury / Federal reserve. So far the US government is winning. It seems that enough money can float the equity and debt markets. And there is enough "leakage" to run up other asset classes as well. Not only metals and crypto currencies but even residential real estate.

I must admit I was oh so wrong about how that fight would work out. I thought the free market was more powerful than the Fed. So far that isn't the case. It may well turn out that the US government can hold assets afloat until the economy recovers. We can hope the total cost to doing this will not be too high, but i fear it will exceed ten trillion dollars in 2020 alone.

If this effort runs out of political will, the result will not be pretty. The government dumped so much money into the US economy that disposable household income in the USA actually ROSE in the second quarter. No matter the ten percent economic contraction and 10% - 15% unemployment. I have a hard time imagining what happens if the federal government pulls the plug on this much aid. Or worse, if the rest of the world stops lending money to the USA so it can prop up its markets and economy.

My money is feeling very left out at the moment. I am getting essentially zero percent on my short term cash investment. The feared recession / depression is upon us. But so far, the markets don't seem to care.

DrStrange
 
DrStrange said:
If this effort runs out of political will, the result will not be pretty. The government dumped so much money into the US economy that disposable household income in the USA actually ROSE in the second quarter. No matter the ten percent economic contraction and 10% - 15% unemployment. I have a hard time imagining what happens if the federal government pulls the plug on this much aid. Or worse, if the rest of the world stops lending money to the USA so it can prop up its markets and economy.
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We are of very similar mind. It's amazing how the supply of money is currently winning the day.
 
dajebriza said:
I'm selling a paid-off house to liquidate cash to be ready to invest in the market when it crashes. This Virus is going to inject instability for the next year and the effects on our economy, like turning an oil tanker, will take months to manifest. I am gambling on much worse ahead for the markets. Especially with such a divided Presidential election ahead. Pure chaos and instability ahead. I want to be sitting on a lot of cash to be able to jump in on the other side of the drop. It will fall fast and rise slowly but I need to sell my home now before it happens and there is still a seller's market in real estate.
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Great plan. Being cash rich in what are uncertain times seems like a good strategy. If the markets do tank (again) you want to be poised to buy large positions in quality companies that are not going anywhere.
 
I am not an economist but agree with the statement that "The government dumped so much money into the US economy" and wonder if this increase in money supply is a major factor behind asset price inflation and, if so, if it is somewhat permanent in the medium to long term.
 
We’re witnessing massive asset price inflation in front of our eyes. The little guy with his small cash savings and no home is getting annihilated. Generations will suffer for those that are not part of this rigged game. RIP the future generations that don’t inherit meaningful wealth.
 
While US debt continues to be sold (read bought) at stupid low interest rates, I can’t see the money printer being turned off any time soon. It’s so cheap to borrow money, why would they stop?
 
mummel said:
Biden originally called to raise cap gains tax to 49%. I see his latest plan is around 40%.

This is absurdly high. It’s nearly double the current rate.

If his plan goes through, it’s going to be horrid for the market.

https://taxfoundation.org/joe-biden-tax-proposals/
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increase the top marginal income tax rate on long-term capital gains to 39.6 percent for taxpayers earning more than $1 million annually
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And I wonder where rich people would put their money other than the markets?
 
Darson said:
And I wonder where rich people would put their money other than the markets?
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That’s just people. Think about the trillions made by hedge funds and Wallsteet. There’s going to be carnage after the cash flow models get adjusted.

Germany has a 25% cap gains rate. We’ll see massive outflows because people will be chasing better returns. And a weak dollar.
 
mummel said:
That’s just people. Think about the trillions made by hedge funds and Wallsteet. There’s going to be carnage after the cash flow models get adjusted.
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The don’t pay capital gains tax...
 
mummel said:
Hedge funds don’t pay cap gains tax!?????
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A hedge fund is another form of pass-through entity, allowing the fund itself to operate free of taxation.

Sucks to be poor eh!
 
DrStrange said:
I have a hard time imagining what happens if the federal government pulls the plug on this much aid. Or worse, if the rest of the world stops lending money to the USA so it can prop up its markets and economy.
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These are my fears as well. And I think we're about to knock on hell's door.

DrStrange said:
My money is feeling very left out at the moment. I am getting essentially zero percent on my short term cash investment. The feared recession / depression is upon us. But so far, the markets don't seem to care.
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Hang in there. It's coming.
 
The real estate market has been crazy as well. It's still, somehow, a seller's market. The current crisis seems to be driving a deeper wedge between the haves and the have nots. There is still no shortage of willing and able buyers out there.

But we are likely just months, if not weeks, away from some major collisions. There are tens of millions of Americans who are currently either in foreclosure proceedings or facing eviction. The number of renters who will soon be evicted, likely without "consequence", is going to hit us like a tidal wave. Someone has to foot the bill here. I don't know what's going to happen when this all goes down, but I can't imagine the consequences aren't severe. It may not even take place in the real estate market though. It's really strange. Also, commercial real estate properties are beginning to see a large exodus as well. Numerous large corporations are breaking/not renewing their leases because they are now realizing they can just save a shit ton of money allowing everyone to work from home. This will have a ripple effect on local businesses, many of which are strategically placed in commercial zones.

I don't know what is coming our way or when it's going to happen, but it's coming. Get ready.

I've been selling the farm... converting everything to gold/cash/crypto/etc. Be safe out their folks. And don't get greedy.
 
I've been thinking about this regarding the real estate market. With a disproportionately high number of elderly dying from COVID, it means a much higher than normal elderly death rate. Those folks are already of a bubble (baby-boomer) generation that owns a lot of real-estate wealth. High dollar retirement and vacation homes, which will pass on to their next of kin. If their inheritors need to cash out, rather than hold onto and pay high property tax bills on these homes, they may need to discount them heavily to hope to sell them. Will there be a lot of buyers for these higher priced homes in crowded, expensive cities? If the economy tanks and people need cash, and a lot of these homes hit the market at once, well that's even worse for the real estate market.
 
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There are lots of push/pull factors impacting the real estate market, for example:
- Interest rates at an all time low making borrowing cheaper than it has ever been
- Low interest rates also make it less likely for investors to hold cash
- The equities markets being unstable with a lot of sectors depressed
- Work from home allowing people to move from urban areas to more rural locales
- Work from home allowing corporations to downsize their office space
- Unemployment and consequential mortgage defaults
- Corporate bankruptcies and resulting impact on commercial real estate
- Real estate obligations (debt/equity) being structured into trade-able funds

Who knows that the dominant factors will be?

Real estate is currently at an all time high but is also highly location dependent. For example, Dallas house prices didn't increase much before the 2006 bubble but also didn't drop much after the crash and are now comfortably higher than their bubble values. Las Vegas prices skyrocketed during the bubble, crashed hard and haven't yet recovered.
 
RainmanTrail said:
I've been selling the farm... converting everything to gold/cash/crypto/etc. Be safe out their folks. And don't get greedy.
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I am in the same boat and have most of my liquidity in bitcoin right now. What is your method for "converting to gold" do you buy physical gold? I like gold but my only hesitation is that it seems like a pain to get in and out. Bitcoin is so easy as you can just buy/sell with the click of a button.

I only own 2 stocks right now which are NVIDIA and Microsoft and I view those as long term plays as there is no other option for humanity except a technological future (for better or worse). I won't sell these at a loss regardless of the price just going to ride it out.

https://www.coindesk.com/microstrategy-ceo-michael-saylor-bitcoin

“We just had the awful realization that we were sitting on top of a $500 million ice cube that’s melting,” Saylor said. MicroStrategy has settled on bitcoin as the treasury alternative.

“This is not a speculation, nor is it a hedge,” said Saylor. “This was a deliberate corporate strategy to adopt a bitcoin standard.”
 
Lemonzest said:
I am in the same boat and have most of my liquidity in bitcoin right now. What is your method for "converting to gold" do you buy physical gold? I like gold but my only hesitation is that it seems like a pain to get in and out. Bitcoin is so easy as you can just buy/sell with the click of a button.

I only own 2 stocks right now which are NVIDIA and Microsoft and I view those as long term plays as there is no other option for humanity except a technological future (for better or worse). I won't sell these at a loss regardless of the price just going to ride it out.

https://www.coindesk.com/microstrategy-ceo-michael-saylor-bitcoin

“We just had the awful realization that we were sitting on top of a $500 million ice cube that’s melting,” Saylor said. MicroStrategy has settled on bitcoin as the treasury alternative.

“This is not a speculation, nor is it a hedge,” said Saylor. “This was a deliberate corporate strategy to adopt a bitcoin standard.”
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I just bought ETFs for my gold and silver. Not sure how wise that decision was, but it was easy to do from my brokerage account.
 
RainmanTrail said:
I just bought ETFs for my gold and silver. Not sure how wise that decision was, but it was easy to do from my brokerage account.
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From my rather minimal research I have always heard gold bugs criticize buying "paper gold" versus owning physical gold. I like the idea of owning some physical gold but just haven't pulled the trigger yet. Seeing the price of gold skyrocket also didn't make it seem like a good time...:)
 
RainmanTrail said:
I just bought ETFs for my gold and silver. Not sure how wise that decision was, but it was easy to do from my brokerage account.
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Inflation is likely to rise, which historically leads to higher gold prices as the dollar weakens. Seems like a good thing to have in a portfolio at this time.
 

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