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  • #76
    Originally posted by Thoughtful Monk View Post
    Fed did the 0.5% increase yesterday. Stock Market is acting like was a total surprise and is down about 3% I read. I'm hunkered down to ride out the storm.

    On a side note, I'm seeing stuff at work that indicates to me it's really going to hit the economy in May and June. It's going to be a rough year. I think most of the posters on this thread already knew that.
    Yeah and Biden and the democrats don't care. This is affecting everyone with a 401K. I don't think people will forget come election time. Inflation is making the 401K values drop like a rock and making what money you do have buy less and less. A double whammy.

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    • #77
      They also postponed the balance sheet reduction they were supposed to start in May (at least according to Bullard) to June. Postponement of balance sheet reduction, or the fact they seem apprehensive about it, might be indication that the Doves are right -- those that think the Fed is going to panic when they see the market carnage over the course of the year, stop tightening, and reverse course. I still think the Hawks have the edge though.
      "What am I doing here?" -- Joe Biden 2021

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      • #78
        Originally posted by Sparko View Post

        Yeah and Biden and the democrats don't care. This is affecting everyone with a 401K. I don't think people will forget come election time. Inflation is making the 401K values drop like a rock and making what money you do have buy less and less. A double whammy.
        we stuck our 401k in an ordinary savings account when we saw the market start to go down. At least there the interest will compound. Not a perfect solution but it is something
        A happy family is but an earlier heaven.
        George Bernard Shaw

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        • #79
          Then there is the housing market. Evidently a number of these "cash" transactions were actually "cash loans" that were obtained using cryptocurrencies and tech stocks as collateral. I looked at it, and these "cash loans" have variable interest rates, starting at 5-9 percent but variable at the discretion of the lender to 34.99 percent. It's not even hidden. Places like Charles Schwab issue them all the time. Morgan-Stanley does them and then there are lesser known "alternative lenders" Such as Upstart Loans which recently lost 1/2 it's value. These are so called "securities backed mortgages" But what happens when the "securities" are volatile to begin with and at the first sign of recession the security value falls.? When the collateral falls, the lender of course , goes after the buyer for immediate repayment. While this hasn't made primary news yet, the buzz on social media posts is that trouble is coming and they can do nothing to stop it.
          A happy family is but an earlier heaven.
          George Bernard Shaw

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          • #80
            Originally posted by Catholicity View Post
            Then there is the housing market. Evidently a number of these "cash" transactions were actually "cash loans" that were obtained using cryptocurrencies and tech stocks as collateral. I looked at it, and these "cash loans" have variable interest rates, starting at 5-9 percent but variable at the discretion of the lender to 34.99 percent. It's not even hidden. Places like Charles Schwab issue them all the time. Morgan-Stanley does them and then there are lesser known "alternative lenders" Such as Upstart Loans which recently lost 1/2 it's value. These are so called "securities backed mortgages" But what happens when the "securities" are volatile to begin with and at the first sign of recession the security value falls.? When the collateral falls, the lender of course , goes after the buyer for immediate repayment. While this hasn't made primary news yet, the buzz on social media posts is that trouble is coming and they can do nothing to stop it.
            This is one among multiple reasons the doves have a pretty good argument that the Fed is going to capitulate and reverse course at some point.

            Another reason is the potential implosion of the bond market. How will the federal government fund it's insane spending spree if the Fed is not only NOT printing money to buy their bonds, as well as all the bonds on the market not being bought by private lenders (private lenders are also apparently dumping their bonds), but actually dumping the trillions worth of bonds they have on their balance sheet.

            We're talking about a pretty catastrophic situation.

            OTHO, the reason I think the hawks still have the edge is because the Fed (once again) got their marching orders directly from the Biden admin...

            Some of the roots of the inflation are outside of our control, to state the obvious. But there are things we can do and we can address and we need to do.

            That starts with the Federal Reserve, which plays a primary role in fighting inflation in our country.

            I’ve put forward a highly qua- — highly qualified nominees to lead that institution. And I strongly urge the Senate confirm them without delay.

            The Fed has dual responsibilities. First is achieving maximum employment, and second is stable prices.

            And while I’ll never interfere with the Fed’s judgments, decisions, or tell them what they have to do — they’re independent; they’re independent — I believe that inflation is our top economic challenge right now, and I think they do too.
            IOW, Biden is pressuring the Fed to stop inflation no matter what. Remember, they've barely started and yet we're already seeing all this carnage. It's a catch-22 unlike any other.
            "What am I doing here?" -- Joe Biden 2021

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            • #81
              I wonder how much worse inflation would be in Build Back Better had actually passed and all that money was coming into the economy.
              "For I desire mercy, not sacrifice, and acknowledgment of God rather than burnt offerings." Hosea 6:6

              "Theology can be an intellectual entertainment." Metropolitan Anthony Bloom

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              • #82
                Bitcoin and other crypto crashed yesterday and probably is still dropping. Something about a stable coin (based on the US dollar) was suddenly unstuck from the dollar and caused a huge selloff which caused bitcoin and other coins to drop. And they were tauting bitcoin and crypto as hedges against inflation. Oops.

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                • #83
                  Doesn't help any that Coinbase is possibly declaring bankruptcy and if you have coin there, you'll be considered an unsecured creditor and probably lose some or all of your coin. https://nypost.com/2022/05/11/coinba...goes-bankrupt/

                  Crypto is still looking too risky for me to invest in.
                  "For I desire mercy, not sacrifice, and acknowledgment of God rather than burnt offerings." Hosea 6:6

                  "Theology can be an intellectual entertainment." Metropolitan Anthony Bloom

                  Comment


                  • #84
                    Originally posted by Thoughtful Monk View Post
                    Doesn't help any that Coinbase is possibly declaring bankruptcy and if you have coin there, you'll be considered an unsecured creditor and probably lose some or all of your coin. https://nypost.com/2022/05/11/coinba...goes-bankrupt/

                    Crypto is still looking too risky for me to invest in.
                    I have some crypto on coinbase. I am using it to play around with crypto, basically speculating. I have only enough money invested that I won't be hurting if I lose it all, but could make some profit if things ever go the other way.


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                    • #85
                      Originally posted by Sparko View Post

                      I have some crypto on coinbase. I am using it to play around with crypto, basically speculating. I have only enough money invested that I won't be hurting if I lose it all, but could make some profit if things ever go the other way.
                      I suggest you pull out of there. If they go bankrupt, unsecured creditors usually only get pennies on the dollar. (I suspect you already know that).
                      "For I desire mercy, not sacrifice, and acknowledgment of God rather than burnt offerings." Hosea 6:6

                      "Theology can be an intellectual entertainment." Metropolitan Anthony Bloom

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                      • #86
                        Originally posted by Thoughtful Monk View Post

                        I suggest you pull out of there. If they go bankrupt, unsecured creditors usually only get pennies on the dollar. (I suspect you already know that).
                        I don't think they are going bankrupt. They are probably the largest crypto broker around. If they do go bankrupt, the entire crypto market will become worthless, so no matter where you have your crypto it would be worth zip. The article you linked to said it was an SEC requirement to send out that notice, so they would have to send it out whether they were doing well or not. Right now the gas fees (the cost to do transactions) are really high for any etherium based coins so if I did try to move them out right now, it would end up costing me a large percentage of my overall value, so it's not worth trying to do it.

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                        • #87
                          Originally posted by Sparko View Post

                          I don't think they are going bankrupt. They are probably the largest crypto broker around. If they do go bankrupt, the entire crypto market will become worthless, so no matter where you have your crypto it would be worth zip. The article you linked to said it was an SEC requirement to send out that notice, so they would have to send it out whether they were doing well or not. Right now the gas fees (the cost to do transactions) are really high for any etherium based coins so if I did try to move them out right now, it would end up costing me a large percentage of my overall value, so it's not worth trying to do it.
                          Hope you're right.
                          "For I desire mercy, not sacrifice, and acknowledgment of God rather than burnt offerings." Hosea 6:6

                          "Theology can be an intellectual entertainment." Metropolitan Anthony Bloom

                          Comment


                          • #88
                            Originally posted by Sparko View Post

                            I don't think they are going bankrupt. They are probably the largest crypto broker around. If they do go bankrupt, the entire crypto market will become worthless, so no matter where you have your crypto it would be worth zip. The article you linked to said it was an SEC requirement to send out that notice, so they would have to send it out whether they were doing well or not. Right now the gas fees (the cost to do transactions) are really high for any etherium based coins so if I did try to move them out right now, it would end up costing me a large percentage of my overall value, so it's not worth trying to do it.
                            It's very similar to the dot-com bubble, though when it finally busts probably won't be as widespread since most legit companies didn't fall for that speculative nonsense.
                            "What am I doing here?" -- Joe Biden 2021

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                            • #89
                              Originally posted by seanD View Post

                              It's very similar to the dot-com bubble, though when it finally busts probably won't be as widespread since most legit companies didn't fall for that speculative nonsense.
                              according to this article (from last year) crypto is pretty entwined in the business world and the stock market and a crypto crash could cause a market crash too.

                              https://money.com/crypotcurrency-bit...systemic-risk/

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                              • #90
                                Originally posted by Sparko View Post

                                according to this article (from last year) crypto is pretty entwined in the business world and the stock market and a crypto crash could cause a market crash too.

                                https://money.com/crypotcurrency-bit...systemic-risk/
                                Interesting. That would probably explain why the Nasdaq is doing even worse than the DOW and S&P. It seems a lot of folks are using it sort of like a derivative (hedge), as Catholicity pointed out.
                                "What am I doing here?" -- Joe Biden 2021

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