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Credit deflation and the reflation cycle to come (part 2)


spunko

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Talking Monkey
1 hour ago, Castlevania said:

The Frankfurt secondary listing for GameStop is at €230. Up 142% from yesterday’s German close. This is the most obvious short. Just how long can the market stay irrational.

 

37 minutes ago, Noallegiance said:

This isn't meant as a slight against anyone. Just shining a torch in a corner.

All the chatter (not just here) about high flying stocks, happiness among potentially tens of thousands across the world at unexpected parabolic moves in surprise stocks, more people piling in, more people expecting more debt to pile in even more...

The only people who win will be the realisers of gains which is when the selling starts.

Yes, it's happening bigger and faster because of the tech involved but strip away the fancy exterior and this, to me, looks like any other mania that's sucking in the most number of people possible before it hurts them.

I think only a fraction of the kids long on Gamestop will come out ahead, many will be burnt as the thing eventually comes back to reality. With all the attention the stock has gained how many new players will jump in on the return trip thinking they're buying the dip, or jump back in after having taken profits. 

Still that fraction of the kids that do come out ahead, good on them. 

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7 minutes ago, Talking Monkey said:

I think only a fraction of the kids long on Gamestop will come out ahead, many will be burnt as the thing eventually comes back to reality. With all the attention the stock has gained how many new players will jump in on the return trip thinking they're buying the dip, or jump back in after having taken profits. 

Still that fraction of the kids that do come out ahead, good on them. 

As with all these things, it's the lateral stuff to be watching and learning from.  Look beyond the dazzle and flashing lights.  Oh, and only the paranoiac survive!

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Talking Monkey
Just now, Harley said:

As with all these things, it's the lateral stuff to be watching and learning from.  Look beyond the dazzle and flashing lights.  Oh, and only the paranoiac survive!

The paranoid in me suspects somewhere at the core of this there is some smart money hiding behind the kids, money that will make huge both on the ride up and the way down.

 

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21 minutes ago, Talking Monkey said:

The paranoid in me suspects somewhere at the core of this there is some smart money hiding behind the kids, money that will make huge both on the ride up and the way down.

 

Most definitely, institutional backing smelling blood and following the tide, algos included. Butterfly effect in action.

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Democorruptcy

This might be one for those who short to bear in mind, if they think the market might be going down.

Lower credit rating = larger fall & slower recovery. It seems a bit perverse that the lower credit ratings were valued highest before the falls.

 

crsp.jpg

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39 minutes ago, Talking Monkey said:

The paranoid in me suspects somewhere at the core of this there is some smart money hiding behind the kids, money that will make huge both on the ride up and the way down.

 

Its just the robin hood / square generation, millions of young people with "free" stock apps and a bit of money and time chasing things that are cool (like tesla). US wanted a stock owning democracy and this it what that looks like.

Dumb money on an unprecedented scale you may say, but of course if there is enough dumb money then that becomes the smart money ...

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2 hours ago, Castlevania said:

The Frankfurt secondary listing for GameStop is at €230. Up 142% from yesterday’s German close. This is the most obvious short. Just how long can the market stay irrational.

https://www.ft.com/content/0a58b63a-4294-3e07-8390-c3aabef39a26

Short squeezes can get very nasty, especially if you need to buy and everyone holding doesn't want to sell!

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2 minutes ago, Majorpain said:

https://www.ft.com/content/0a58b63a-4294-3e07-8390-c3aabef39a26

Short squeezes can get very nasty, especially if you need to buy and everyone holding doesn't want to sell!

This why I dont understand the demonising of those shorting someting - you are promising to buy the stock in the future so what is bad (ethically) about that ?.

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geordie_lurch
5 minutes ago, Majorpain said:

https://www.ft.com/content/0a58b63a-4294-3e07-8390-c3aabef39a26

Short squeezes can get very nasty, especially if you need to buy and everyone holding doesn't want to sell!

I've posted some links on the separate thread @goldbug9999 set up for this detailing the guy who "took an $50K long position and has been long ever since. That's right, he turned $50K into $22MM+ so far" :o It's fascinating but I don't want to derail this great thread more :Beer:

 

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Yadda yadda yadda
2 minutes ago, goldbug9999 said:

Its just the robin hood / square generation, millions of young people with "free" stock apps and a bit of money and time chasing things that are cool (like tesla). US wanted a stock owning democracy and this it what that looks like.

All these apps do democratise investing and trading. There is no lower limit for the amount you can invest. No transaction fee. Anyone can play.

Hedge funds shorting deserve all they get.

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Flicker of realisation on PM Twitter this morning, as the idea of doing the same thing to PMs on Comex pops up on WSB ...

... now that *would* be truly interesting. Love to be a fly on the wall in a bullion bank this morning

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1 hour ago, jamtomorrow said:

Flicker of realisation on PM Twitter this morning, as the idea of doing the same thing to PMs on Comex pops up on WSB ...

... now that *would* be truly interesting. Love to be a fly on the wall in a bullion bank this morning

I am not sure how they could do it to precious metals though, as there is effectively no free market as I understand it for paper bullion - it's 'set' by a cartel every day?

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I've just taken 10k off the table of BP.

If this is the BK, of something like it, I think BP will go down more than other oilies.  If it does, I'll be happy to use that 10k to buy back in at 19 or so again (av for my BP is 18.78).  Note, ADR, so USD price.

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geordie_lurch
27 minutes ago, wherebee said:

I've just taken 10k off the table of BP.

If this is the BK, of something like it, I think BP will go down more than other oilies.  If it does, I'll be happy to use that 10k to buy back in at 19 or so again (av for my BP is 18.78).  Note, ADR, so USD price.

It seems I sold 50% of my BP about the same time as you this morning as I don't like the direction on them and the general 'feel' of things but was going to wait until it dropped below 271 :ph34r:

As I have said previously though, I'm fully prepared to be wrong and have to buy in again for slightly more if they look like they are going to blast through 300p but I bought most of the other 50% below today's price anyway so all good  :Beer:

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50 minutes ago, wherebee said:

I am not sure how they could do it to precious metals though, as there is effectively no free market as I understand it for paper bullion - it's 'set' by a cartel every day?

Technically they can print to order as most don't demand physical, although things got tricky earlier in the year when physical supply got disrupted and demand didn't.

Gold is probably too big a market, Silver however is relatively tiny and a horde in that would cause JPM problems.

https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/

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The case for oil is still bullish out to 2028 imo - we will see the real profits on the way there.

My average on BP is ~255, I think that's an ok entry point for buy and hold for several years, as such I'm not tempted to trade dips at all.

I save the trading for the gambles like Bitcoin, tech stocks, reddit jokes etc. 

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2 hours ago, goldbug9999 said:

This why I dont understand the demonising of those shorting someting - you are promising to buy the stock in the future so what is bad (ethically) about that ?.

Sometimes the Funds short and then put out hit pieces on the company, it has a function in the market but it can get quite dirty sometimes.

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10 minutes ago, Majorpain said:

Sometimes the Funds short and then put out hit pieces on the company, it has a function in the market but it can get quite dirty sometimes.

Right but thats no different going long and then talking it up ? - completely fine if the positions are known.

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3 hours ago, Talking Monkey said:

 

I think only a fraction of the kids long on Gamestop will come out ahead, many will be burnt as the thing eventually comes back to reality. With all the attention the stock has gained how many new players will jump in on the return trip thinking they're buying the dip, or jump back in after having taken profits. 

Still that fraction of the kids that do come out ahead, good on them. 

I find it most amusing the kids are using their printed fed money checks and student debts (read that as stimulas money) to pump stock the same way the fed and wallstreet have been doing for decades :Jumping:

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