Who here is ready for the bubble to end all bubbles to pop when the fed finally...

lostmypassword
lostmypassword

Who here is ready for the bubble to end all bubbles to pop when the fed finally raises rates back to normal?

Personally, I'm quite excited for all of the capital misallocation to end.
no more real-estate speculation
no more cult of shareholder value
no more cutting R&D spending
no more predatory lending
no more financial derivatives
no more capital stagnation
Feels good man.

The markets are already beginning to tank, so let's enjoy the show!

All urls found in this thread:
http://www.multpl.com/inflation-adjusted-s-p-500
https://www.youtube.com/watch?v=wEBfCVIRcDA
Poker_Star
Poker_Star

@lostmypassword

Less opportunity to advance in life is the American Way.

Carnalpleasure
Carnalpleasure

@Poker_Star
implying the financialization bubble hasn't been artificially increasing housing prices and cost of living while simultaneously depressing the labor market
wew lad

SniperWish
SniperWish

@lostmypassword
I don't think they are going to raise it that fast. There will be some initial panic, but it will die down.

RavySnake
RavySnake

@lostmypassword

I agree with a lot of what you are saying, but you need excitement to get the people going.

VisualMaster
VisualMaster

@lostmypassword

S&P500 just surpassed the dot com bubble peak adjusted for dollar inflation btw
http://www.multpl.com/inflation-adjusted-s-p-500

Carnalpleasure
Carnalpleasure

@lostmypassword
Can someone explain this in simple terms.

What rates is fed rising?

Why would they be rising?

Is there some tutorial for retards like me?

I really want to understand this whole fed rates raises economy stress thing, but I just can't grasp it so far.

CouchChiller
CouchChiller

@Carnalpleasure
There's nothing wrong with the economy other than the fact that the financial/ banking sector is extremely overvalued thanks to free money courtesy of the Federal Reserve. Don't let anyone tell you differently, because these financial institutions are going to throw a huge temper tantrum and start scare mongering once their funny-money faucet gets shut off.

BinaryMan
BinaryMan

@lostmypassword
implying that business leaders won't just double down like they have been for the last 40 years

AwesomeTucker
AwesomeTucker

@CouchChiller
he fact that the financial/ banking sector is extremely overvalued thanks to free money courtesy of the Federal Reserve.
Is this "the bailout". When government put gov money (tax payer money) in banks in 2008 to safe big ones from failing, so jobs won't be lost and economy won't receive a hit? They let one die (Lehman Brothers?) to show an example, yeh?

So what are the "fed rates"? How these "rates" affect other economic stuff? What does it mean for S&P500? I'm a stupid indexer, I don't know this shit, but want to learn.

FastChef
FastChef

@Carnalpleasure
The Fed raise interest rates thats banks pay to take loans from the federal reservee in order to pull money out of the system in order to combat inflation and keep the dollar in demand for long periods of time. The banks pass that shit onto people who are trying to take out loans from them. This lowers the amount of money in circulation, combating inflation.

New_Cliche
New_Cliche

@AwesomeTucker
No, that was tiny in comparsion. The Fed then subsequently printed five trillion dollars over several years as a program called "Quantitative Easing" or QE which it used to buy bonds and subsidize the equities markets and banking sector.

Stupidasole
Stupidasole

@FastChef
Ok, did I get this correctly:
1) Inflation keeps going up
2) Fed thinks it is too fast, gotta slow down
3) Fed makes dollars and lends to banks
4) Fed makes dollars more expensive for banks to borrow (banks have to pay more back in rates %)
5) Banks get less money in circulation, because they are paying more back to Fed
6) Less money in circulation means it is worth more
7) It means inflation is less

Yeh?

Methnerd
Methnerd

@Stupidasole
So, is this correct?

Sharpcharm
Sharpcharm

@lostmypassword
the """""""trendline""""""" on this graph is really triggering me

as if the "real economy" only grows linearly or something? what the fuck?

Evilember
Evilember

@Sharpcharm
Was thinking the same. 3% inflation compounds... Should have a noticeable curve ovee the given timespan. Some pajeet monkey probably put it on his blog.

Nonetheless there is undoubtedly the biggest bubble comprising of anything money can buy, and it will hopefully pop soon.

Flameblow
Flameblow

@lostmypassword
no more financial derivatives
i think you meant to say
no more high risk markets like financial derivatives with massive amounts of other peoples money
derivatives are good for the economy when losses arent socialized

SniperGod
SniperGod

@Flameblow
Quads confirm

RumChicken
RumChicken

@lostmypassword
try using a log graph

Dreamworx
Dreamworx

@lostmypassword
no more cult of shareholder value
why would this be good for workers?
no more cutting R&D spending
companies with R&D don't use debt and derivatives in their financing? companies with R&D don't provide jobs? companies with R&D don't use stocks to for funding? why wouldn't R&D be slashed under your plan again?
no more financial derivatives
because Occupy said they were bad, right?
no more capital stagnation
you might want to check on this one too

Soft_member
Soft_member

@Poker_Star

Those million dollar one bed no bath houses and tuition that increases by 6% year over year sure is helping millennials advance

girlDog
girlDog

There will be soon house clearance sales all over as the people will not survive the rate tick

whereismyname
whereismyname

@Sharpcharm
@Evilember
they don't know that the trendline only goes exponential during bubbles
Embarassing

Dreamworx
Dreamworx

@RumChicken
The same thing applies to you too. Look at any other bubble in history and you'll notice a transition from a linear trendline to an exponential one. The fact that you're even suggesting this means that the equities markets are irrevocably fucked.

Emberfire
Emberfire

@CouchChiller
once their funny-money faucet gets shut off
QE ended in 2014. The faucet was shut off two years ago, moron.

FastChef
FastChef

@Dreamworx
shareholder value is maximized when costs are low, revenues are high, aka as few workers getting paid the smallest amounts you can pay them. moving away from short-term, bonus oriented thinking for 2-3 year profit boosts is the only real way to help the worker and keep jobs in our country.

financial derivatives will never go away and are necessary but require a little more information about their industries to become publicly available. even when investing in a bank trying to assess their CDS or MBS obligations is near impossible. for the average depositor who just wants his money in a stable bank they solve this crisis of misinformation by supporting only the largest banks.

Stark_Naked
Stark_Naked

@Emberfire
be bank
borrow money from the fed at approximately 0% interest
loan out the money that you borrowed for free at x% interest
this somehow doesn't qualify as giving the banks free money

MPmaster
MPmaster

@Dreamworx
why would this be good for workers?
I'd suggest you read a book called Shareholder Value Myth. One reason behind BP oil spill was that because the corporation only looked after the ahort term interests pf its shareholders, R&D was cut and it led to lax safety standards across its gulf of mexico fleet which then led to the oilspill. It considered shareholders' short term value more important than its STAKEHOLDERS' value. In the end BP, shareholders as well as stakeholders got fucked.

Sharpcharm
Sharpcharm

@Stupidasole
no.

TurtleCat
TurtleCat

@lostmypassword
what is the reasoning behind that chart's trend line

whereismyname
whereismyname

@Sharpcharm
So what is the correct version?

Gigastrength
Gigastrength

@girlDog
I can't wait for this shit. Gonna buy my whole block for pesos

Need_TLC
Need_TLC

So what's going to trigger this?

worthless unicorn tech business
privately held debt
national debt
interest rate hike
a Trump presidency
all of the above

Emberburn
Emberburn

@Stark_Naked
If you're too stupid to know the difference between the prime lending rate and qualitative easing, just leave Veeky Forums. We don't want you here.

TechHater
TechHater

@Emberburn
"qualitative" easing
calling others stupid
Yikes, you're not a sharp one...

Sharpcharm
Sharpcharm

@Emberfire
shut up you retard ~%0 precent interest rates to banks is retarded. We are going to get hyper inflation.

Emberfire
Emberfire

@Need_TLC
a Trump presidency
no. Most people polled say trump would do better with the economy, and if you study economics, funny thing, it depends on psychology. If people think tomorrow will be better then today, they invest and spend today. So a trump presidency will help the economy

WebTool
WebTool

@Sharpcharm
We are going to get hyper inflation.
That would be unfortunate ... if it were remotely true. But QE and low interest rates haven't budged inflation in all the years they've been in effect.

So you call someone a retard, but proceed to make a completely retarded statement. Makes you think....

RumChicken
RumChicken

@WebTool
Does that rate of inflation include:
Cost of University
Cost of a home
Cost of a burrito

If it doesn't, it's wrong.

FastChef
FastChef

What would be the best way to prepare for something like this?

GoogleCat
GoogleCat

@RumChicken
Standardized statistics are wrong because because they don't match my personal experiences or biases.
Fuck off, kid.

Raving_Cute
Raving_Cute

@whereismyname
inflation for 2015 was quite low, but it's somewhat increasing. It's still below of what the Fed wants.

Fed is holding the rates because it fears it might have an adverse effect on employment and consumer spending, but wants to raise it to avoid creating bubbles (which it is and is creating a very big problem - the risk of a US recession in the first half of 2017 is 1/3 and is increasing)

But for the record, if the Fed "makes" more money, it is cheaper, not more expensive. Just get a hold of any macro 101 textbook and skip over to central banks chapter.

Lunatick
Lunatick

@Flameblow
derivatives are a zero-sum game though

Booteefool
Booteefool

@GoogleCat
wanting to own a home, going to school and eating food is simply "my personal experiences or biases"

Fucking Boomers.

Boy_vs_Girl
Boy_vs_Girl

@Booteefool
where do you live m8? Curious, because your city might have inflated cost of living.

cum2soon
cum2soon

@Booteefool
Look kid, there's really simple reasons why housing, education and food are excluded from CPI. Since you're too stupid to Google it, here's the short answers: Housing isn't a consumer expense, prices vary wildly based on location, and a house is an asset not an expense. Education is not a consumer expense, costs vary wildly based on the nature of the institution, and very few average households face education costs. Food (and energy) are excluded from CPI excludes food and energy prices because, historically, they have been highly volatile and non-systemic (i.e., insensitive to monetary policy).

Now that I've done the work that you were too lazy to do yourself, will you kindly shut the fuck up?

Fucking Millennials.

hairygrape
hairygrape

@Booteefool
The often touted inflation figures are pretty good when applied to food costs ( underestimation ifor anything) and are currently pretty good on avg ( i.e. not in fucking San Francisco) real estate.

Where they shit out hard is education expenses and Healthcare costs.

Methshot
Methshot

@RumChicken
Cost of a burrito
yes, yes it does. It measures a bundle of household staples like food and toiletries.
Stop picking apart the inflation metric you retard. You're wrong and just as bad the people saying hurr durr unemployment is really at 20%. It's not the number, it's the trend that matters.

Methnerd
Methnerd

@Boy_vs_Girl
I live in a college town. Working on my PhD at the same institution I did my undergrad. In that time, tuition has increased at a steady 5% a year. The price of ready to eat food has increased 50%. 40% of my income goes towards rent. That isn't even as bad as at the average college campus. My parents home is 'worth' x3 what they bought it worth 15 years ago. At the height of the bubble, it was worth x4.5 more.

But hey, TVs and Gas are cheap!

@cum2soon
So 100% of my cost of living is not included in the metric they use to determine inflation but it is a good metric?

Snarelure
Snarelure

@Methnerd
You'e an abnormal piece of shit. Sorry.

Emberburn
Emberburn

@cum2soon
kek
also, food is included in CPI

Flameblow
Flameblow

people seem to think that having recessions is unhealthy but i think they are a necessary cycle for economies, what is important is minimizing the length of the recession and any aftershocks that may occur.

It would be nice to only have positive unlimited growth but this is not realistic.

SniperWish
SniperWish

@Emberburn
food is included in CPI
In standard, but not core. We should be talking about core since that's what the Fed uses to make monetary policy decisions, but fuck it ... this thread is a clusterfuck anyway.

Soft_member
Soft_member

@Methnerd
this. the economy is fucked for the ~95% in the middle. It's okay for the 0.01% and sort of okay for the very poor, as in their life isn't getting poorer. But the rest are fucked from 0% interest rates.
OP post had it best
@lostmypassword
no more real-estate speculation
no more cult of shareholder value
no more cutting R&D spending
no more predatory lending
no more financial derivatives
no more capital stagnation
The last thing we need right now is more capitol it's not even being used to create new jobs or factories, they are just trading it with each other.

happy_sad
happy_sad

@Soft_member
the economy is fucked for the ~95% in the middle
Fuck, I hate Millennials. Their whining is so loud I won't get a good night's sleep for the next 30 years.

Burnblaze
Burnblaze

@Soft_member
being an the epicenter of this shit
We got fuck all for a "living" then we're socially conditioned to play victims and clean last Gen's mess while they create more.

https://www.youtube.com/watch?v=wEBfCVIRcDA

Flameblow
Flameblow

@TechHater
Smart. We need to start stripping out quatitative data and social effects. They're starting be become obvious(division teaching, massive bliss in ignorance and mental slavery)

RumChicken
RumChicken

Cant wait to sink my teeth into the s&p at discount prices

FastChef
FastChef

@Flameblow
\Econ101

JunkTop
JunkTop

@Lunatick
eh, stock trading is a zero sum game too. derivatives certainly have legitimate uses. if you're a farmer and the majority of your income comes from 1 bulk sale a year, it's nice to be able to lock in the price ahead of time.

StrangeWizard
StrangeWizard

@cum2soon
@Snarelure
@SniperWish
@happy_sad
lalalalalala I can't hear you - the poster
Like how deeply in denial can you be to get confronted with a bunch of perfectly logical arguments and totally disregard them with name-calling? How deep are you in the market?

Ignoramus
Ignoramus

@cum2soon
be US economy
be 2/3 consumer spending
largest consumer purchase is housing
almost always with borrowed money
monetary policy barely affects housing

Since that's the case, why bother with monetary policy at all in the US if it can't affect a major portion of the economy? It seems pretty useless and all they did with Japanify the US with their massive asset purchases. Free market economy my balls.

Stupidasole
Stupidasole

@cum2soon
be economist
quantify purchasing power with a metric that excludes the most important expenditures of most peoples' lives on a technicality
"look, no inflation!"

lol

Illusionz
Illusionz

@StrangeWizard
He's right though. Commodity prices have taken a dive despite low interest rates. If monetary policy affected them drastically, they'd be to da moon.

Everything else is going up due to the way the system is structured to fuck people over.

Supergrass
Supergrass

@Flameblow
high risk markets
Yea, like the ones created through abusing QE, inaccurate data, and derivatives contracts...oh wait..

Dreamworx
Dreamworx

@Flameblow
when losses arent socialized
lie to the people
IGNORANCE = BLISS

Stark_Naked
Stark_Naked

@girlDog
house clearance sales
Where can I enjoy some spoils? Already bought gold (months late but still good)

Need_TLC
Need_TLC

@Illusionz
everything is inflating but it's not actually inflation because it isn't wheat, oil, or corn
Come on man

Garbage Can Lid
Garbage Can Lid

@cum2soon
Fucking Millennials

Casual

RumChicken
RumChicken

@girlDog
OY VEY IT'S ANUDDA 2007

RumChicken
RumChicken

@Illusionz
We're experiencing a contraction of the monetary supply right now because people are too scared to spend.

This is the prequel to what's to come with big inflation when everyone realizes their non refundable debt units are completely useless.

Disable AdBlock to view this page

Disable AdBlock to view this page