Is There a New Dotcom Bubble?

[Exit]

Let's hope for the ECB to raise interest rates next week.

Otherwise, companies will have to raise salaries by 10% this year to make up for rampant inflation.

Juan, looks like your rants finally went through

Powell said they should have done something sooner before it was too late

 

[Juan]

Juan, looks like your rants finally went through

Powell said they should have done something sooner before it was too late

The FED is well behind the curve.

I think Powell will not act fast enough. He is too late. And the ECB is even worse. Lagarde is useless as a central banker.

Lagarde has a long track record of screwing up at all roles she's taken. She was a disaster as French Finance Minister and did not know how to deal with the Falciani list. She was a complete disaster as IMF director, and she is now icing the cake ruining the whole Europe as ECB chief.

As for her second-in-charge, Luis de Guindos, the guy worked for Lehman Brothers (the company went bankrupt and its collapse contributed to the 2008 crisis), then went on to work as Finance Minister for Spain. Spain was in fact bankrupt too and was bailed out by the EU, and Guindos made all the taxpayers take up European loans for hundreds of thousands of million euros.

Now as a prize this useless person is appointed ECB Vice Presidentesident to help Lagarde ruin Europe.

 

[Juan]

The war keeps driving markets down:

U.S. stocks under pressure as Russia-Ukraine conflict intensifies following fire at Ukrainian nuclear plant

 

[Joeseph Stope]

Duh. Does anyone recall that a few pages back I wanted your opinion on that story from the Apocalypse. You know, the three or four riders... the one on the red horse represented war, the one with the pale face represented disease and the one carrying weighing scales calling out "four quarts a penny" represented famine...

Well looks like you got'em. I really hope I'm wrong here -- I live over in Yurrup.

But the Krauts have changed their policy and have decided to give the Ukrainians some weapons.

Disease? Well you got your COVID-19, ain't you? All we need is the next variant.

And then the lad carrying the weighing scales? Well that's inflation ain't it? That'll bring along hunger and famine.

In market technical terms... you might want security... but banks? They've suffered a lot with the low interest policy.

Small caps. Make sure you pick the right one.

Maybe supermarket shares? People gotta eat. Right?

An interesting article I just got hold of today. From a Kraut newspaper. It was in German... and I'm a language major. Correction! make that a language minor. But the jist of it was that someone posed the astute question: "What do the Rooskies produce/export?" Beyond arms and oil, gas & coal not very much.

The uncomfortable conclusion came that the Germans by relying on the Rooskies for their oil, gas, coal were effectively bankrolling Putin's war-effort. If they wanted to stop the war, they effectively had to cancel the trade with the Russians... Ouch that's gonna hurt.

Quite a distance from chart analysis and such...

But it's interesting all the same.

 

[Juan]

Maybe supermarket shares? People gotta eat. Right?

In Spain, DIA supermarket is owned my Mikhail Fridman, a Russian oligarch. Luxury yachts owned by Russians are leaving Spain for the Caribbean or exotic destinations in Africa.

And Russia is banning American Big Tech, Facebook, YouTube etc are going to be banned.

AirBnb is going to leave the Russian market. It is just 150 million people...

 

[Juan]

RUSSIAN STOCKS REMOVAL: S&P DJI now announces that it will remove ALL stocks listed and/or domiciled in Russia from standard equity indices at a price of ZERO, effective prior to the open on 3/9/22.

https://www.spglobal.com/spdji/en/d...drussiamarketaccessibilityresults3-4-2022.pdf

 

[Exit]

Zara closed sales in Russia. 8.5% of total profits according to the news.

When do we stop buying his oil?

Will the sanctions cease when he gets all of Ukraine?

Will American and Asian markets tumble like they should have done a year ago?

Putin got a perfect storm for us.

 

[Juan]

When do we stop buying his oil?

Norway does not need Russian oil, but Germany does.

The UE is designed around Germany... so it's unlikely that Europe stops purchasing Russian oil. What for? To purchase oil from more expensive producers?

 

[Exit]

Norway does not need Russian oil, but Germany does.

The UE is designed around Germany... so it's unlikely that Europe stops purchasing Russian oil. What for? To purchase oil from more expensive producers?

Under today's circumstances, Russia needs to be hit the only place we can afford, their wallet!

So I'd say USA should send their oil reserves and so should Saudi.

The extra cost should be divided amongst us all in the West based on a couple of fair principles.

Of course this will never happen because no one really gives a shit about Ukraine...

 

[Juan]

The extra cost should be divided amongst us all in the West based on a couple of fair principles.

That's the point that the US will not honour.

The US just wants to destabilise the whole world and specially Europe - as always - and come out of this economic crisis as the country that lost the least, this is, the winner of the crisis.

The US is the most selfish country in the world and ironically many people think the Americans are great. But the Americans parked all those Afghan refugees in my backyard in Spain instead of taking them by plane to Washington DC to live near Joe Biden.

 

[Exit]

@Juan, let's agree that all politicians are corrupt and that Putin is the only one with balls?

I hope the world wakes up and shuts Putin down before it's too late...

Spring is coming to Europe, probably a heat wave or two!

We'll live perfectly fine without his oil and gas. Money used on extreme energy prices will be money well invested for everyone, and push forward the need for green energy.

The cost of war is already starting to look steep.

Will Russia rebuild Ukraine and clean up another nuclear disaster?

 

[Juan]

We'll live perfectly fine without his oil and gas. Money used on extreme energy prices will be money well invested for everyone, and push forward the need for green energy.

I think the "green" transition in Spain will not mean people purchasing expensive electric cars they cannot afford, but instead turning to using bicycles and walking more, and cutting spending on petrol.

It will also mean less consumption, since the country is going through a deep economic crisis, that is just starting to unfold.

Will Russia rebuild Ukraine and clean up another nuclear disaster?

It is probably going to work like in Irak... foreign private companies will be assigned the reconstruction of the country, funded with public money. The usual sharks. Business as usual.

 

[Juan]

This is an interesting read, today in the Financial Times:

Opinion US Equities
'Tech wreck' looks more like another dotcom bubble bursting
Relative resilience of some big companies is obscuring the extent of wealth destruction

https://www.ft.com/content/74171839-0892-4270-b4b4-abea037ea0c4

 

[Juan]

EU and UK open antitrust probe into Google and Meta over online ads.

It's about time the EU gets serious about all the laws Big Tech is breaking. It's time for sanctions and fines. Better late than never... it's also time to enforce our laws on privacy and data protection.

 

[Juan]

It's going to be a tough day for Boeing stock:

Chinese plane with 132 people onboard crashes in Guangxi province

State media reports that China Eastern 737 went down near city of Wuzhou, sparking mountainside fire

The China Eastern Airlines flight, a Boeing 737, crashed near the city of Wuzhou in Teng County, Guangxi province. It had departed from Kunming at 1pm but did not reach its scheduled destination in Guangzhou. Flight tracking data shows the plane dropping from the radar signal to the south-west of Wuzhou shortly before 2.30pm local time.

https://www.theguardian.com/world/2...hes-guangxi-province-china-eastern-737-wuzhou

 

[Juan]

The FED is way behind the curve. It has to make a bold move to contain inflation. 100-basis-point-raise?

 

[Ed209]

The FED is way behind the curve. It has to make a bold move to contain inflation. 100-basis-point-raise?

100 basis points would hardly do anything, though, and that's the problem. As I said pages back, Paul Volcker raised the rates to 18/20% to fight inflation back when they could afford to (when their debt-to-GDP was like 32% and not 126% like it is today).

Imagine if he raised it by 25 or 50 basis points like what's happening today? He'd be laughed at.

They are currently inflating the dollar into oblivion. I have no idea if this is through sheer incompetence or whether it's their long-term strategy to steal people's money so the debt diminishes. This is ultimately the result of countries living beyond their means whilst reducing their productivity. It's the cycle that never stops repeating itself.

What the Fed has done so far has been highly predictable.

 

[Juan]

What the Fed has done so far has been highly predictable.

It is highly predictable if you take for granted that the market is completely manipulated, like it has never been before in history.

This will not end up well.

 

[Ed209]

It is highly predictable if you take for granted that the market is completely manipulated as it has never been before in history.

This will not end up well.

I told you way back in 2020 what was coming. The markets have always been manipulated and that will never change, but the problems we are facing now have nothing to do with that. This is years of bad money management that has been brought to a head by extreme money printing in the last couple of years, and supply chain issues. Governments continuously spend money that they don't have! We have artificially maintained our high standards by living way beyond our means; we've been living off other people's money and productivity my entire lifetime. What we should have done, many years ago, is scale up our own productivity to balance the books, and if that wasn't possible, then we should have taken a hit to our living standards.

Fiat money is also a massive problem and I've been critical of it for about 20 years.

 

[Juan]

Fiat money is also a massive problem and I've been critical of it for about 20 years.

FIAT money is fine if central bankers do their job. Now I miss Paul Volcker.

 

[Ed209]

FIAT money is fine if central bankers do their job. Now I miss Paul Volcker.

Your arguments make no sense at all, Juan. What would you expect Paul Volcker to do if you could bring him back now? It's ridiculous. It honestly astounds me how little a grasp you have on this subject. Do you think he'd raise the rates to 18% again? Anything past circa 3% would bankrupt the US government and financially ruin all of its citizens. Remember that Volcker was dealing with a very healthy debt-to-GDP of 32% and not the staggering 126% of today. That's a debt that cannot be repaid with all the money that's in circulation. It's nearly one a half times the size of the entire economy.

Fiat has always been controlled and manipulated by a select few, and it's also based upon a fractional reserve model of banking that is outdated and flawed because it is geared to serve the big banks and not the people. If you want to see how successful it has been, look at the last 50 years of international finance. It's objectively a horrific mess where no defensive argument stands up.

It's so bad now that it's led to obscene amounts of money printing which is always one of the last things to occur before a collapse. Do some research on the history of money and see how many times this cycle has repeated itself. The average person on the street would be much better off with a self-governing, decentralised monetary system, that cannot be controlled or manipulated by a few elite individuals or institutions.

We have given the banks ample time to sort this shit out that they created, and now it's time to try something new, in my opinion. I have no idea why you continue to be in a juxtaposition of attacking them whilst defending them.

There will be a financial revolution coming in the next few decades because the legacy system is FUBARed and has been for a long time. Just embrace the change because anything is better than the shit show we've got right now.

 

[Juan]

Your arguments make no sense at all, Juan. What would you expect Paul Volcker to do if you could bring him back now? It's ridiculous. It honestly astounds me how little a grasp you have on this subject. Do you think he'd raise the rates to 18% again? Anything past circa 3% would bankrupt the US government and financially ruin all of its citizens. Remember that Volcker was dealing with a very healthy debt-to-GDP of 32% and not the staggering 126% of today. That's a debt that cannot be repaid with all the money that's in circulation. It's nearly one a half times the size of the entire economy.

Fiat has always been controlled and manipulated by a select few, and it's also based upon a fractional reserve model of banking that is outdated and flawed because it is geared to serve the big banks and not the people. If you want to see how successful it has been, look at the last 50 years of international finance. It's objectively a horrific mess where no defensive argument stands up.

It's so bad now that it's led to obscene amounts of money printing which is always one of the last things to occur before a collapse. Do some research on the history of money and see how many times this cycle has repeated itself. The average person on the street would be much better off with a self-governing, decentralised monetary system, that cannot be controlled or manipulated by a few elite individuals or institutions.

We have given the banks ample time to sort this shit out that they created, and now it's time to try something new, in my opinion. I have no idea why you continue to be in a juxtaposition of attacking them whilst defending them.

There will be a financial revolution coming in the next few decades because the legacy system is FUBARed and has been for a long time. Just embrace the change because anything is better than the shit show we've got right now.

Ok, so now we will have to "invest" on the assumption that politicians and central bankers are actually working actively against the interest of 99% of the population, and only in favour of a handful of Silicon Valley billionaires

 

[Ed209]

Ok, so now we will have to "invest" on the assumption that politicians and central bankers are actually working actively against the interest of 99% of the population, and only in favour of a handful of Silicon Valley billionaires

Not at all; they have proven beyond all doubt how incompetent they are and I am only pointing out the circular nature of your arguments. You are obsessed with them raising the interest rates as you repeat the same post over and over again, but you fail to recognise why they are being so predictably slow. They have created an impossible mess.

The system stinks. It's geared towards screwing over average working people and this is especially true of banks with their extortionate fees and shitty interest rates (for both borrowing and lending). Most of the fees are hidden, so your average Joe doesn't even know how badly they are being screwed because they don't know any other way.

 

[Juan]

They have created an impossible mess.

The mess is easy to untangle. Those billionaires will have to take the pain, and create businesses that actually have a margin and do not depend on free-never-ending borrowing and issuing of debt.

This has to be done. Postponing it will only mean more pain.

 

[Ed209]

The mess is easy to untangle. Those billionaires will have to take the pain, and create businesses that actually have a margin and do not depend on free-never-ending borrowing and issuing of debt.

This has to be done. Postponing it will only mean more pain.

You have no idea what you are talking about. Economic growth is slowing down and inflation can't be controlled by measly 25 basis point rises. They can't raise the rates high enough to do anything meaningful (because of years of bad policy), and one has to keep a very close eye on the slow down in the economy because we are heading for stagflation. If we can't grow the economy then those enormous debts will become even larger as we head into a recession. Right now a recession seems unavoidable, but we don't want it to turn into a depression. High inflation is very much preferable to an economic collapse right now. It's the least painful route.

It wouldn't surprise me one bit if the Fed started up the printers again just like every other country and empire has historically done in these situations. Will we finally learn from history not to do this, or is the dollar on its last leg of being the world's reserve currency?

Raising taxes at a time like this would be the final nail in the coffin because it further slows down growth, discourages work, and it kills investment and innovation.

 

[Juan]

High inflation is very much preferable to an economic collapse right now.

Oh really? Preferable for whom? For those Big Tech billionaires? For the crypto billionaires? For the Winklevoss twins?

I think the guy next door and the girl upstairs are very much in favour of a big interest rate raise, considering their salaries do not increase at all, and have not increased at all for years and years...

 

[Juan]

You have no idea what you are talking about. Economic growth is slowing down and inflation can't be controlled by measly 25 basis point rises. They can't raise the rates high enough to do anything meaningful (because of years of bad policy), and one has to keep a very close eye on the slow down in the economy because we are heading for stagflation. If we can't grow the economy then those enormous debts will become even larger as we head into a recession. Right now a recession seems unavoidable, but we don't want it to turn into a depression. High inflation is very much preferable to an economic collapse right now. It's the least painful route.

It wouldn't surprise me one bit if the Fed started up the printers again just like every other country and empire has historically done in these situations. Will we finally learn from history not to do this, or is the dollar on its last leg of being the world's reserve currency?

Raising taxes at a time like this would be the final nail in the coffin because it further slows down growth, discourages work, and it kills investment and innovation.

On the e-CNY:

A new world of currency disorder looms | Financial Times (ft.com)

 

[Ed209]

Oh really? Preferable for whom?

For everyone. I'm not some snobby elitist trying to protect the ultra-wealthy. I'm talking about your average working people; they would be better off with a certain degree of inflation than a collapse of their currency, and that's a fact. The latter would have a considerable impact on the quality of life of working people far worse than what they are dealing with now. The flip side to this, of course, is that hyperinflation would lead to the end of the currency anyway, so the goal is to contain the inflation to within an arbitrary figure of like 25% or something. There is no room to raise the interest rates to fight it effectively, and raising them too much would kill off an already shrinking economy (because it's in a very fragile state) and this would leave us with inflation plus a recession. We should be attempting anything we can to keep the economy growing (other than printing more money). We need to find a way of becoming more productive and less reliant on Chinese labour.

You are ignoring all the nuances of what's happening in the world and just keep harping on about the interest rates like that's the only thing that matters. The central banks created this mess with their poor decisions, and now all of us, the working people, are bearing the brunt of the fallout as usual. If they hadn't have built up such a mountainous debt, then they could have gone full Paul Volcker and whacked the rates right up instead of talking about a few basis points.

It's a bad situation with little that can be done. There will be pain no matter what.

 

[Juan]

I'm talking about your average working people

Yes, I see my grandma investing in Bitcoin or other crypto bullshit

The average "investor" today is a pizza delivery boy trying to pay an iPhone in installments. That's the quality and resilience of our "economy"... or to put in another way... the casino central banks have created.

 

[Ed209]

Yes, I see my grandma investing in Bitcoin or other crypto bullshit

Who said anything about that?

The average "investor" today is a pizza delivery boy trying to pay an iPhone in installments. That's the quality and resilience of our "economy"... or to put in another way... the casino central banks have created.

Exactly, so why on Earth are you defending it? It's a shambolic mess. You are ripping on crypto, but at least that is helping poor people far more than the traditional financial system is. Those iPhone instalments could easily be paid with crypto interest. With the fees an average person would be saving from not being robbed by the banks, they'd have that iPhone for free, essentially.

I turned £3000 into circa £80,000 in something like 20 months. I continue to receive hundreds in interest every month plus free Netflix, Spotify, 3% card cashback on every purchase, and a free airport lounge pass on the debit card. What have the banks done for me? I'd have lost a fortune to the inflation they created if I had left all my money in a bank account. I made over $1000 on the Visa card cashback alone; it's miles better than the banks.

They can shove their basis points up their ass