Sanrith Descartes
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Investing General Discussion
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TheBeagle
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There will be a giant glut in RVs next year as people realize how much of a beating they can be using and maintaining them. Friend of mine has bought three of them this year and rents em out on Outdoorsy. Constantly booked, one is already paid off and the other two should be paid off by the end of the year. He plans on selling all three next spring because of how much work goes into keeping them up.
Next year will be a great time to buy RVs that have only been used three or four times. I'm betting airlines/cruise lines come roaring back next year as people will be desperate to go back to easy vacations and normalcy. Wuflu won't have any legs left by then, especially after the election. Still pissed I didn't get in on CWH at $8 or $9 after I missed my limit order by $0.25.
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TJT
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No he's a prima donna faggot I knew in the Army. Zero technical skill of any kind. Not really sure what he does there.
Sanrith Descartes
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Sanrith Descartes
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Sanrith Descartes
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And here comes the airline bounce...
White House says Trump could act unilaterally to avoid U.S. airline layoffs
REUTERS 9:58 AM ET 8/26/2020
WASHINGTON (Reuters) - President Donald Trump could take executive action to avoid massive layoffs at U.S. airlines, while an impasse on a new coronavirus stimulus package continues in Congress, White House Chief of Staff Mark Meadows said on Wednesday.
"We're looking at other executive actions," Meadows said in an online interview with Politico. "If Congress is not going to work, this president is going to get to work and solve some problems. So hopefully, we can help out the airlines and keep some of those employees from being furloughed."
White House says Trump could act unilaterally to avoid U.S. airline layoffs
REUTERS 9:58 AM ET 8/26/2020
WASHINGTON (Reuters) - President Donald Trump could take executive action to avoid massive layoffs at U.S. airlines, while an impasse on a new coronavirus stimulus package continues in Congress, White House Chief of Staff Mark Meadows said on Wednesday.
"We're looking at other executive actions," Meadows said in an online interview with Politico. "If Congress is not going to work, this president is going to get to work and solve some problems. So hopefully, we can help out the airlines and keep some of those employees from being furloughed."
Gravel
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Posted that in the Politics thread yesterday and no one seemed to comment.They broke the off switch to the money printer.
Powell set to deliver 'profoundly consequential' speech, changing how the Fed views inflation
Powell, who will speak Thursday during a virtual version of the Fed's annual Jackson Hole, Wyoming, conference, will outline what could be the central bank's most active efforts ever to spur inflation back to a healthy level.www.cnbc.com
I honestly can't make sense of what it is, although the statement obviously hasn't come yet. But it sounds like they want...more inflation? Than what was already coming, no less?
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Flobee
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I'm no expert, but as I understand the situation the real impending problem that the Fed is scared of is deflation. There are two massive deflationary pressures on the market right now. First, technology consolidates services and makes them cheaper, this lowers asset prices. Second, the boomer's are retiring and we have a large demographics problem with an increasingly large proportion of society no longer providing economic value. Those same boomer's are relying on ever increasing asset prices in order to retire. You can look at Japan's economy for an example, they're about ~10 years ahead of us in regard to demographic age.
Fed is much more concerned about asset prices dumping and an entire generation going completely broke (well, more broke since 2008 really fucked them). The fear of inflation comes from the almost guaranteed result of them overshooting on inflation, or at least the fact that all of that liquidity is going to move eventually. This is obviously ignoring the fact that 95% of USD value has already been inflated away.
Fed has over meddled in the economy and its on the point of breaking on an international scale. Our monetary policy is largely causing all of the inflation issues in smaller countries. You could make a convincing argument that true inflation won't hit the US while we remain the world reserve currency, but I've seen that idea challenged recently. I don't think anyone knows for sure.
Please correct me if I'm misstating any of this pals.
Flobee
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Also worth adding to the above:
www.marketwatch.com
While the right hand may be trying to save boomer 401k's the left hand appears to be trying to loot them. I think 401k investments are like 41% of US GDP.
Private-equity crowd wants your 401(k) money — ‘yikes!’
New regulations look like more risk than opportunity
www.marketwatch.com
While the right hand may be trying to save boomer 401k's the left hand appears to be trying to loot them. I think 401k investments are like 41% of US GDP.
Furry
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Yep, gonna be the early 80s over again. When you take on this much debt the next natural step is to drive up inflation some. Main reason I'm trying to pump the max into market. Stocks ride inflation well usually.
Flobee
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They're opening up the definition of an accredited investor as per:
Definitely a step in the right direction IMO. I would personally prefer that it just be a situation where you waive protections and you're allowed to invest in private equity but this is something at least
Definitely a step in the right direction IMO. I would personally prefer that it just be a situation where you waive protections and you're allowed to invest in private equity but this is something at least
The amendments to the accredited investor definition in Rule 501(a):
- add a new category to the definition that permits natural persons to qualify as accredited investors based on certain professional certifications, designations or credentials or other credentials issued by an accredited educational institution, which the Commission may designate from time to time by order. In conjunction with the adoption of the amendments, the Commission designated by order holders in good standing of the Series 7, Series 65, and Series 82 licenses as qualifying natural persons. This approach provides the Commission with flexibility to reevaluate or add certifications, designations, or credentials in the future. Members of the public may wish to propose for the Commission’s consideration additional certifications, designations or credentials that satisfy the attributes set out in the new rule;
- include as accredited investors, with respect to investments in a private fund, natural persons who are “knowledgeable employees” of the fund;
- clarify that limited liability companies with $5 million in assets may be accredited investors and add SEC- and state-registered investment advisers, exempt reporting advisers, and rural business investment companies (RBICs) to the list of entities that may qualify;
- add a new category for any entity, including Indian tribes, governmental bodies, funds, and entities organized under the laws of foreign countries, that own “investments,” as defined in Rule 2a51-1(b) under the Investment Company Act, in excess of $5 million and that was not formed for the specific purpose of investing in the securities offered;
- add “family offices” with at least $5 million in assets under management and their “family clients,” as each term is defined under the Investment Advisers Act; and
- add the term “spousal equivalent” to the accredited investor definition, so that spousal equivalents may pool their finances for the purpose of qualifying as accredited investors.
Jysin
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I don't read this as a bounce, but a drag on the company. Without any kind of gov bailout, being forced to keep employees on payroll is a massive cost to the airlines while they are at a fraction of previous service demand. Layoffs would reduce the cash burn and help the airlines keep afloat. Should be interesting to see how it plays out.
Sanrith Descartes
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Ill try to keep this short and simple. Yes the fear is deflation. Consider what is inflation? First consider a bunch of factors are interconnected. First jobs and wages. As wages go up we have more to spend. But as wages go up things cost more to produce. Since we are making higher wages we have more money floating in the economy. As more money is in the economy people are willing to pay more for a good. So as long as wage increases and price increases stay close to each other its all good. The economy is humming. When price inflation outweighs wage increases things get bad. This will happen as an economy overheats. Your raises arent covering the increased cost of groceries anymore. Now throw in borrowing costs (interest rates) as another variable. How does the Fed take cash out of the economy? By giving it a better place to be put and at the same time disincentive borrowing/spending. They raise interest rates (borrow costs). This is what Volcker did when he ran the Fed in the 80's. Inflation was running rampant so he spiked interest rates. Like Empire State Building spiked them. Imagine putting your cash into a CD and getting 18% return. Imagine buying a house or a car and paying 20+% interest.
So the savings rate increases, spending decreases and prices (inflation) decrease. This is the ballet dance the Fed performs (assuming you agree with Keynesian Economic theory).
Now lets see the opposite. Deflation. Deflation occurs when the costs to produce goods (materials, wages etc) decrease but the actual sell price of the goods doesn't always follow. Doesn't sound all that bad on its face. But it doesn't impact all sectors of the economy equally. Especially the Financial sector. A borrower can borrow money and end up having to use money to pay it off that ends up being more valuable than the money he borrowed. It also impacts the psyche of the investor. They become less inclined to invest if they think the odds are that their investment will lose value. Also, it becomes more difficult to use debt financing (people, businesses, and governments) and it promotes more savings financing type activity. For an economy to continue to grow the consumers need to keep consuming. Its the biggest single component of GDP (C+I+G+(Ex-Im) where C is consumer. When people are saving and not spending GDP stalls and eventually shrinks.
Easy-Peasy.
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Big Phoenix
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Inflation is the perfect way to erase the shitload of debt you just created in the past 6 months and will create in the next uh who knows how long.
People(bankers and government) hate deflation because it increases their debt.
Sanrith Descartes
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Agreed. but remember back when the fed tried raising interest rates above 2%? The markets vomited. To set interest rates back where they belong is going to require a true independent Fed who is willing to do what they need to do, raise rates and say fuck the market. Aka another Volcker.
Big Phoenix
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Sanrith Descartes
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QQQ up 2% today. FB 5%, MSFT 2.5%, TSLA 5%, AMZN 2.5%
Everything is normal.
Everything is normal.
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