Investing General Discussion

Sanrith Descartes · Aug 8, 2023

Forgot to mention I added another tranche of 6-month Treasury notes expiring 2/1/24. 5.44% yield.

Blazin · Aug 8, 2023

Sanrith Descartes said:
I didnt mention whether it was overdue or not. I posted that its an all-time and high and it is combined with an all time high in average interest rates. I totally get that it doesn't seem relevant to you, but I do look at it as something to consider. Especially since I am long V and MA.

What's makes those two items fake? Is the debt not over $1T or the average interest rate on it not at 20.5%?

Why would it go down especially when you aren't even adjusting for inflation. If GDP grows would you not expect to see larger credit card debt? Wouldn't a more important stat to watch be the consumers ability to pay that debt. Or that debt vs their available cash flow? Or we don't want to look at those because it paints a very different picture.

I honestly can't understand how its so low, its actually an oddity given the inflation we have seen it should be pushing 2-3T just to be on the level of previous periods of credit extension. Consumers became more disciplined through the pandemic (hate that words because it's bs there was no pandemic but whatever whenever I say pandemic I mean the govts response not reinforcing it actually being a thing) . That is wearing off and the US consumer should at some point return to it's glory days of overextension. Don't even get me started on the ridiculous amount of home equity consumers are sitting on way beyond historical levels.

Kiroy · Aug 8, 2023

Blazin said:
Don't even get me started on the ridiculous amount of home equity consumers are sitting on way beyond historical levels.

Because of this, we're selling our ranch and downgrading our life. Probably gonna bank 800k+. Gonna just strait up pay off a normie house and shoot for a 50-55 retirement.

OU Ariakas · Aug 8, 2023

Blazin said:
Why would it go down especially when you aren't even adjusting for inflation. If GDP grows would you not expect to see larger credit card debt? Wouldn't a more important stat to watch be the consumers ability to pay that debt. Or that debt vs their available cash flow? Or we don't want to look at those because it paints a very different picture.

I honestly can't understand how its so low, its actually an oddity given the inflation we have seen it should be pushing 2-3T just to be on the level of previous periods of credit extension. Consumers became more disciplined through the pandemic (hate that words because it's bs there was no pandemic but whatever whenever I say pandemic I mean the govts response not reinforcing it actually being a thing) . That is wearing off and the US consumer should at some point return to it's glory days of overextension. Don't even get me started on the ridiculous amount of home equity consumers are sitting on way beyond historical levels.

This is like when politicians always talk about RECORD PROFITS(!!!) or DEBT LEVELS without putting them in context. What is the profit margin? What is the debt level in relation to GDP or total tax receipts? It is all scare tactics.

Blazin · Aug 8, 2023

FRB: Charge-Off and Delinquency Rates on Loans and Leases at Commercial Banks

The Federal Reserve Board of Governors in Washington DC.

www.federalreserve.gov

peruse that a little for a proper consumer strength boner some of the strongest numbers we have seen in our life times across the board. I'm so glad people struggle with understanding the dynamics around them as it sure has made life easy for me, I should be thanking social media everyday for feeding the ignorance monster.

Jysin · Aug 8, 2023

NVDA crazy price action. News hit:

NVDA nveils Next-Generation GH200 Grace Hopper Superchip Platform for Era of Accelerated Computing and Generative AI

Share price spikes on the news, then immediately gives it all back and then some. Closing in on $440 now.

PS. Been away a bit. Seems like the BTFD crowd is a bit rattled. I've got some reading and catching up to do.

Jysin · Aug 8, 2023

Sanrith Descartes

Blazin

For full context of that 1T news:

11:00 (US) NY Fed Quarterly Household debt and Credit report:
Q2 delinquencies flat q/q but remain at 11-year high; Credit card balances surpassed $1T for the first time ever
- Credit card balances rose by $45 billion to $1.03 trillion in the second quarter
- Household debt ticked up 0.1% to $17.06 trillion, as mortgage balances
- Auto loan balances continued their long-term increase, rising by $20 billion to $1.58 trillion in the second quarter

11 year high on delinquencies. Perhaps Blazin's chart is a bit out of date? (sourced Fed release from 11am today)

Blazin · Aug 8, 2023

OU Ariakas said:
This is like when politicians always talk about RECORD PROFITS(!!!) or DEBT LEVELS without putting them in context. What is the profit margin? What is the debt level in relation to GDP or total tax receipts? It is all scare tactics.

Selectively looking at information makes poor conclusions easy. Some people do it willfully some is just a human weakness towards confirmation bias and struggling with two many variables causing us to gravitate towards simpler answers even if based on hogwash.

Blazin · Aug 8, 2023

Jysin said:
Sanrith Descartes Blazin

For full context of that 1T news:

11:00 (US) NY Fed Quarterly Household debt and Credit report:
Q2 delinquencies flat q/q but remain at 11-year high; Credit card balances surpassed $1T for the first time ever
- Credit card balances rose by $45 billion to $1.03 trillion in the second quarter
- Household debt ticked up 0.1% to $17.06 trillion, as mortgage balances
- Auto loan balances continued their long-term increase, rising by $20 billion to $1.58 trillion in the second quarter

11 year high on delinquencies. Perhaps Blazin's chart is a bit out of date? (sourced Fed release from 11am today)

11 yr looks about right , which is still at the bottom of a very low trough . Mist is right direction matters, so will this now accelerate and grow 2 to 300% higher and into a range that could be real trouble. Just saying 11yr high is the same as "Highest TEMP EVER RECORDED! *ps we just started recording" Are the levels of the last 11 yrs higher or lower than the previous 40yrs?

Sanrith Descartes · Aug 8, 2023

Blazin said:
Why would it go down especially when you aren't even adjusting for inflation. If GDP grows would you not expect to see larger credit card debt? Wouldn't a more important stat to watch be the consumers ability to pay that debt. Or that debt vs their available cash flow? Or we don't want to look at those because it paints a very different picture.

I honestly can't understand how its so low, its actually an oddity given the inflation we have seen it should be pushing 2-3T just to be on the level of previous periods of credit extension. Consumers became more disciplined through the pandemic (hate that words because it's bs there was no pandemic but whatever whenever I say pandemic I mean the govts response not reinforcing it actually being a thing) . That is wearing off and the US consumer should at some point return to it's glory days of overextension. Don't even get me started on the ridiculous amount of home equity consumers are sitting on way beyond historical levels.

I dont agree that consumers became more disciplined at all. I think a combo of shit being closed so they couldnt spend on that stuff combined with "some" people using stimulus checks to pay down cc debt.

Blazin · Aug 8, 2023

Sanrith Descartes said:
I dont agree that consumers became more disciplined at all. I think a combo of shit being closed so they couldnt spend on that stuff combined with "some" people using stimulus checks to pay down cc debt.

Whether you agree or disagree with facts is kind of irrelevant. Paying down debt with a stimulus checks which they did do, it's not an opinion, is fiscal discipline.

Blazin · Aug 8, 2023

I think what people have trouble squaring is the dmg being done to the middle class and the strength of the consumer they seem incongruent, two ideas opposed to each other. Aren't people being hurt by rising food and energy prices, etc.

Hard to discuss keeping it totally on Economics and not a FJB rant, but I'll try. The people who "matter" to S&P profits is shrinking. The two above ideas are not in conflict they are talking about two different sets of the population. We continue to struggle with workforce participation, and there is such a growing gap between the halves and the have nots. For people who have capital investments and high earnings power the current economic back drop is having little affect upon them. The rise in their investments and pay is offsetting increased costs. People at the lower spectrum will still give 100%+ of what they earn to the S&P 500 even if their income is not keeping pace with inflation. We can have recessions for the poors and things just keep humming right along. None of this is to say that only one group matters, it just matters more within the realm of this discussion. People with purchasing power are the ones who can really swing economic activity levels. People totally get this if we were discussing wealth disparities in this country but then they forget to apply that exact thing to their view on markets

If you listened to my daily kill (sorry hug) all the commies rants you would think I'm super bearish on the market but you have to step back and consider flows of monies and the dynamics that are at play. A lot of money is moving, where is it going and how do you position to take advantage?

Inflation is theft. Who is being stolen from and who is gaining...

Sanrith Descartes · Aug 8, 2023

Blazin said:
I think what people have trouble squaring is the dmg being done to the middle class and the strength of the consumer they seem incongruent, two ideas opposed to each other. Aren't people being hurt by rising food and energy prices, etc.

Hard to discuss keeping it totally on Economics and not a FJB rant, but I'll try. The people who "matter" to S&P profits is shrinking. The two above ideas are not in conflict they are talking about two different sets of the population. We continue to struggle with workforce participation, and there is such a growing gap between the halves and the have nots. For people who have capital investments and high earnings power the current economic back drop is having little affect upon them. The rise in their investments and pay is offsetting increased costs. People at the lower spectrum will still give 100%+ of what they earn to the S&P 500 even if their income is not keeping pace with inflation. We can have recessions for the poors and things just keep humming right along. None of this is to say that only one group matters, it just matters more within the realm of this discussion. People with purchasing power are the ones who can really swing economic activity levels. People totally get this if we were discussing wealth disparities in this country but then they forget to apply that exact thing to their view on markets

If you listened to my daily kill (sorry hug) all the commies rants you would think I'm super bearish on the market but you have to step back and consider flows of monies and the dynamics that are at play. A lot of money is moving, where is it going and how do you position to take advantage?

Inflation is theft. Who is being stolen from and who is gaining...

You didnt say a single thing I disagree with. Economic downturns always disparately impact the mid/lower classes. Even the great depression had little impact on the Rockefellers of the world. High interest rates dont matter to those (on an individual level, not companies) who can not have credit card debt or buy houses/luxury items for cash.

Those who can afford to be invested in the markets are going to continue to experience wealth increases, even if the economy craters, over the long haul.

Sanrith Descartes · Aug 8, 2023

1200 employees

EV Parts Maker Proterra Files For Bankruptcy

Seeking protection from creditors while continuing to operate, EV parts supplier Proterra filed for Chapter 11 bankruptcy. The company's stock fell more than 65% in pre-market trade on Tuesday.

www.investopedia.com

Blazin · Aug 8, 2023

Sanrith Descartes said:
You didnt say a single thing I disagree with. Economic downturns always disparately impact the mid/lower classes. Even the great depression had little impact on the Rockefellers of the world. High interest rates dont matter to those (on an individual level, not companies) who can not have credit card debt or buy houses/luxury items for cash.

Those who can afford to be invested in the markets are going to continue to experience wealth increases, even if the economy craters, over the long haul.

The next step of the conversation goes to civics. If the non participating group grows larger, societies can hit a tipping point that causes disruption to the entire system. Now that, I am concerned about, is it right now a year from now a decade from now. It's the direction we are headed, the poors don't matter to a point and then at some point it matters more than all.

So my olive branch to zero hedge is that we do need to be watching for acceleration of material decline in consumer economic welfare . Things can cascade, my problem with them is they leave you blind to dangers by screaming fire non stop. Can we bring back the tweets about the china real estate company missing payments and world wide depression was what 3 days away I believe? Their are nuggets of real concerns out there but we here at least should try to make sure we don't dull our senses by overloading them with noise.

I'm the most negative person here, maybe Gravel can compete. So to make it clear, if we don't change course we are completely and utterly fucked AND I think S&P 500 earnings could be up next year more likely that not.

Sanrith Descartes · Aug 8, 2023

Blazin said:
The next step of the conversation goes to civics. If the non participating group grows larger, societies can hit a tipping point that causes disruption to the entire system. Now that, I am concerned about, is it right now a year from now a decade from now. It's the direction we are headed, the poors don't matter to a point and then at some point it matters more than all.

So my olive branch to zero hedge is that we do need to be watching for acceleration of material decline in consumer economic welfare . Things can cascade, my problem with them is they leave you blind to dangers by screaming fire non stop. Can we bring back the tweets about the china real estate company missing payments and world wide depression was what 3 days away I believe? Their are nuggets of real concerns out there but we here at least should try to make sure we don't dull our senses by overloading them with noise.

I'm the most negative person here, maybe Gravel can compete. So to make it clear, if we don't change course we are completely and utterly fucked AND I think S&P 500 earnings could be up next year more likely that not.

I think I have mentioned it before but my view on things is I like to keep a broad swath of info available. Is some of it less valuable than others? Absolutely. I have to parse through it all.
That being said I also dont like to read something and say "I read this and you need to do X". I prefer to post something and let it spark a discussion. I think you are also aware I am pretty far along the bull side of the bear/bull spectrum. The only reason I am sitting on a pile of cash now is uncertainty if I would need it for the new house. Now that I dont, I am looking for entry points to get it back to work.

Gravel · Aug 8, 2023

Blazin said:
The next step of the conversation goes to civics. If the non participating group grows larger, societies can hit a tipping point that causes disruption to the entire system. Now that, I am concerned about, is it right now a year from now a decade from now. It's the direction we are headed, the poors don't matter to a point and then at some point it matters more than all.

So my olive branch to zero hedge is that we do need to be watching for acceleration of material decline in consumer economic welfare . Things can cascade, my problem with them is they leave you blind to dangers by screaming fire non stop. Can we bring back the tweets about the china real estate company missing payments and world wide depression was what 3 days away I believe? Their are nuggets of real concerns out there but we here at least should try to make sure we don't dull our senses by overloading them with noise.

I'm the most negative person here, maybe Gravel can compete. So to make it clear, if we don't change course we are completely and utterly fucked AND I think S&P 500 earnings could be up next year more likely that not.

Not sure why you think I'm negative. I turn 40 next year and retired into probably one of the worst periods in history. I didn't go back to work and have no plans to. Seems pretty bullish an attitude to me.

Tmac · Aug 8, 2023

Gravel said:
Not sure why you think I'm negative. I turn 40 next year and retired into probably one of the worst periods in history. I didn't go back to work and have no plans to. Seems pretty bullish and attitude to me.

I don't think he meant it as a criticism, lol.

Blazin · Aug 8, 2023

Gravel I'm saying I think our mindset is most similar. Not particularly bullish on societal trends but still understanding where the best bet for our money is.

Blazin said:
I'm hating the set up but always say trade the chart in front of you and right now things are improving. More and more charts starting to look healthier. I'm not ready for a go all in capitulation of caution but the moving averages turn up and stack from fastest to slowest only people who hate money fight it at that point. So while buying 400 may feel dangerous, if the bulls win this inflection point better be ready to buy 410-420 .

People will keep wanting to fear 08 and dotcom analogies but those bear markets never had strong breadth thrust that cleared and righted the moving averages. If that's what we get then no matter how we feel about, this bear period is over.

Blazin said:
I’m looking for golden cross and a close above previous peak. Probably a week yet. Fed , big earnings week huge tech setup , by next Friday bears will either show up or a new uptrend is born

Blazin said:
Thats the TLDR good news of my charts and posts, we are going to get an answer and we are going to get it soon.

Blazin said:
I’m looking for golden cross and a close above previous peak. Probably a week yet. Fed , big earnings week huge tech setup , by next Friday bears will either show up or a new uptrend is born

Blazin said:
Very bullish behavior yesterday and today. We are pushing the resistance level. I'll be making a capitulation buy at EOD Friday if we are above the resistance level. My "feelings" do not align with the price behavior we are witnessing. Will dollar cost avg money in as long as we stay above a rising 200d. Dollar getting pummeled and it's going to keep rallying as the dollar weakens. Buys that feel shitty can often pay quite well over time.

I understand and share people's concern and a long is a risk but in this case it's measured. If we were to weekly close below the 200d I'd probably take the few percent loss and reassess.

The above posts are me 36% ago on the nasdaq explaining the bullish divergence I was seeing in the price action. Showing my thought process and actual process for capitulating from bearish "feelings". Not because I understood why they were wrong but because the markets price action simply informed they were. I do like going back and seeing my own process in hindsight, I think there is something to take away from it for others about the never ending mantra of trading what is front of you not what you want or what you fear but what is quantifiable in front of you. When things change change with them.

So where do we stand today? Well still in a bullish configuration. We have some room for weakness, if things are going to materially sour there will be signs and we'll just keep an open mind to them each and every day.

Mist · Aug 8, 2023

Sanrith Descartes said:
1200 employees

EV Parts Maker Proterra Files For Bankruptcy

Seeking protection from creditors while continuing to operate, EV parts supplier Proterra filed for Chapter 11 bankruptcy. The company's stock fell more than 65% in pre-market trade on Tuesday.

www.investopedia.com

lol that's nothing. You guys haven't been following the Yellow news apparently:

US trucking firm Yellow files for bankruptcy, blasts Teamsters

Some 30,000 workers at Yellow Corp were looking for jobs on Monday after the major trucking company filed for Chapter 11 bankruptcy protection, potentially saddling U.S. taxpayers with losses from a government rescue of the long-troubled carrier.

www.reuters.com

30,000 workers.

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