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Lord Ratner

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Everything posted by Lord Ratner

  1. Won't matter. The Fed does not act proactively. They waited for intractable inflation to hike, they'll wait for a credit market collapse to stop. If they reverse course and cut rates down to nothing (and restart QE), we'll get another inflation roller coaster like the 70's. Buckle up, kids. The bill has come due for a couple decades of debt-fueled good times.
  2. All tankers are combat tankers. Not a whole lot of combat (for the air force, that is) without them.
  3. Wife and I each got 10k, planning to get another 10k through the "gift" allowance before the rates drop in November. If you have a company you control or a family trust, that's another few sets you can purchase Our "emergency fund" of ~ 6 months expenses are in the process of being converted from a high yield savings account (2%) to 26 week t-bills (3.5-4%). Just put 1/3 into the t-bills every 8 weeks with the auto-reinvest option. Now if you need the emergency fund, disable the reinvestments and you'll get the first 1/3 no later than 8 weeks, with the rest every two months after that. Still got to maintain enough cash in the high yield savings account to get you through that first two months. Depending on your situation, you can modify this plan using a rotation of longer (or shorter) duration bonds, but that's going to depend mostly on how much cash you want to keep on hand.
  4. Going to the actual Oktoberfest this year, I will report back with my findings
  5. But that's just it, it's not a handful that's needed. Yeah I know, a single nuke in Manhattan would be devastating. One for every major city would be as well. But that's not really how the doctrine works. It takes hundreds, thousands really for the strategy to work *if* you plan to be the first one to launch. A couple dozen would hurt us, but the follow on devastation from our arsenal, very much functional, would end Russia as a global entity. Using a nuke is end game for Putin, and I don't think he's willing to lose everything over Ukraine. Unless he's terminally ill, who knows? This isn't just about us. Europe is experiencing some pretty amazing introspection over their blind eye towards Russia over the years. They are going through way more pain than we are, willing, to hurt Russia. Humans aren't economic entities, they have pride and shame, and I think both are at play here. Either way, the rules of the past 40 years, economically, military, geopolitically, don't apply anymore.
  6. No. COVID lockdowns used against another country (not possible) would be much closer to an act of war than an economic action. Non-economic actions can absolutely have immediate effects. But the traditionally economic actions (sanctions, tariffs, taxes, regulations, interest rates, money printing, etc) are slow acting.
  7. People have been saying "sanctions don't work" as though anything in economics has a time-to-effect of a couple months. Now, did the West (mostly Europe) hilariously fail to predict that Russia would impose sanctions of their own? Yes. But if the Russian sanctions on Europe are having an effect, clearly the reverse is true.
  8. Old man lack vision, and vision wins wars. So does overwhelming force, but it seems like the entire world was wildly overestimating Russia's overwhelming force. It's obviously not worth gambling on, but it has made me wonder just how functional their nuclear deterrent is.
  9. True, but a recession will also bring down hotel prices, which are bananas right now. That's a direct hit to AirBNB. FedEx might be the canary that finally flips the narrative. Shipping is the cardiovascular system of the global economy. A sudden downward revision as drastic as the one FedEx just announced cannot exist in isolation. And the mega cap stocks that are holding up the stock market, overwhelmingly in tech, are by no means more resilient. The very first thing that companies cut in a downturn is the marketing budget. Companies like Google and Facebook have made great progress in diversifying the sources of their income, but advertising revenue is still king.
  10. That's a good question, but I have no idea Edit: the law is 16. Might just be another instance of lazy journalism https://www.shouselaw.com/nv/defense/nrs/201-230-lewdness-with-a-child/
  11. High mortgage rates are going to be a godsend. It's the only thing that will reliably bring down prices, and lower prices are desperately needed. Even some of the housing bears think we'll only see a 10-20% drop in home prices, but I think that's wildly optimistic. If we have higher interest rates, housing will correct to the historical cost:income ratios. No, we didn't see the adjustable rate mortgages that blew up the last housing market. Canada and Australia are going to have to fight that demon. But we saw a level of institutional investor purchasing that was unheard of until this bubble, coupled with interest rates that are unsustainable in the long term. I think those two factors are going to be more, not less devastating than the adjustable rate mortgages were. Other factor is rents, people assume will continue to rise as housing prices fall, but they usually fall in tandem. If rents drop, the institutional investors that are already losing their dreams of asset appreciation will also lose their cash flow, and unlike mom and pop, the second it becomes unprofitable they will sell. To add to that, another thing we didn't have in 2008, the baby boomers retiring. Many of them are relying on their home price as a component of their retirement. 50% of the generation has no retirement savings, and of the 50% that do, the median retirement value is 105,000. Why downsize when the value of your home just keeps going up? Conversely, I think there will be a lot of panic selling when they see their largest asset lose 10 or 20%. And that'll only drive down prices further. Even though they are doing a surprisingly resilient job of fighting the pivot narrative, eventually the Fed is going to break something in this debt addicted market, and at that point the political pressure will be overwhelming. Don't get me wrong, in the long term. The only solution to this will be fiscal and monetary tightening, but I think that will only have the political support required when inflation rears its head again, after diminishing somewhat from this round of tightening. At the end of the day, the home prices we have seen are only possible with low rates and easy money, and inflation reduction is only possible with high rates and reduced liquidity. I do not believe housing will win out over inflation in the long term.
  12. That report reads like it was written by a high schooler.
  13. A few things I've done and learned in the last couple years - I bonds. Google them. Best safe money possible right now. - if you have a large stash of cash that you use as a reserve for emergencies, consider keeping that in Treasury bills instead. Through the same website that you buy I bonds, you can buy treasury bills. If you set up a rotating schedule then you can have your 26 or 52 week t-bills reinvest automatically, let's say two months apart, and keep a much smaller emergency supply in a (low yield) savings account. Now if everything goes to shit, your emergency supply only needs to last you two months before the next batch of t-bills mature and deposit back in your bank account. You will get better rates in almost every possible situation by doing this. For example, my high yield savings account was at 2%, but using the above strategy, I'm getting about 3.5 right now. - similarly, if you are keeping large amounts of cash in your investment portfolios (usually in money market funds), consider investing in a short-term bond fund, such as SHY. The money market funds are giving garbage interest rates. The caveat here is that if the Fed raises rates dramatically higher than we are expecting, the fund itself can lose value. But it is much less volatile than the long-term bond fund TLT, since the short maturity date makes SHY harder to fluctuate. - if you are hoarding for the apocalypse and like gold and silver, now would be a good time to transition your gold and silver investments from ETFs or stocks into physical metal. The prices are pretty depressed. But realize that gold and silver are a defense against a declining dollar, not declining stocks. The dollar will be strong so long as one of two or both are true: the Fed is raising rates, or, the rest of the world is doing worse than us. I expect the former to stop sometime in the next 6 months, but the ladder may take much longer. Precious metals have been killing it in other currencies, but with everybody rushing to the dollar for protection, gold and silver might stay flat for quite some time. - at the end of the day, investing is going to be reduced down to a gamble on where you think the macro economy is going. Unlike picking individual stocks, which requires an understanding of accounting and market fundamentals, predicting the macroeconomic direction of the country or the world is much more a gut feeling. So you can trust someone else's gut or you can trust yours. If you trust yours, then find the analysts who have the same gut feeling as you do, and lean on them to do the technical analysis. If you are a market bear, the YouTube channel Wealthion is fantastic because he interviews a wide range of analysts and money managers. It's a good place to start if you're looking for someone to manage your money, but want them to share your general view of the direction of the world economy. I just found a uranium analyst through them who is spectacular, and I've been looking for someone to help me play my hunch on nuclear for a while. If you are a bull, I'm not sure I can be as much help, since the bulls have largely moved to technical analysis and a somewhat religious belief that the Fed will tackle. Inflation and all will be well. But Kathy woods and Jim Cramer are very bullish, so you could start by finding out where they are being interviewed and I'm sure a Wealthion-like channel is available for bulls. - if you have a habit of accurately forecasting world events, but never profit off of them, recalibrate your thinking such that when you have a prediction (let's say the invasion of Ukraine by Russia) you track down analysts some investors who share the same belief and find out what they're investing in. These people love to talk about their predictions, often for free, but most services are only a few hundred bucks a year. - forget everything you've learned over the last 20 years of investing. Obviously that's hyperbole, but the last 20 years of low inflation fed intervention is fueled a bull market that cannot function in the same way with high inflation. So look at the things that didn't exist before this easy money Fed market, and be skeptical. That means passive investing in index ETFs/funds, cryptocurrency, home flipping as a hobby, The metaverse, SPACs, etc. If they haven't been tested in an inflationary environment, their past performance cannot be used as a predictor of future performance. Doesn't mean they won't do well, but "it always goes up" is dead until further notice. - diversify. One of the money managers. I like a lot, said that he doesn't put more than 5% of his portfolio in any one asset, because he likes sleeping at night. Happening to one company or fund will only cost him 5%. If you really like a sector, that's okay, but diversify within that sector as well. As an example, I think nuclear is going to be an incredibly lucrative investment over the next decade, but I'm only going to put 20% or less of my portfolio into nuclear, and within that I will diversify into around 10 assets. Makes the chance of a moonshot lower, but the much more likely chance of being wrong less devastating.
  14. They are Keynesians at best, modern monetary theorists at worst. Literally, they think the solution is more government spending. Never underestimate just how long stupid, prideful people will ignore the evidence of their failure. When in doubt, double down.
  15. Agreed. My implication is that this won't be a "simple" matter of banging a 17 year old who flashed a fake ID.
  16. Valid. Let's call it "the impending recognition of the worsening recession"
  17. It's going to get a lot worse than the SPR. Just wait until the (neglected and pathetic) retirement accounts of the largest voting block start to implode under the weight of an impending recession. There is no limit to what politicians will spend to preserve their positions. And if you think that largest voting block, which leans conservative, is going to vote to cut their SS checks or their Medicare benefits, you are delusional. They will howl for the Fed to dump rates and fire up the printing press, because their government checks are inflation protected and their retirement accounts will capture the money printing.
  18. Age of consent in Nevada is 16... Might be different in UCMJ, but if the local cops are prosecuting I think the civilian law applies.
  19. Sometimes you say dumb things, but this is particularly dumb. Coming from someone who agreed with you on 95% of your COVID commentary, you sound like a hyperventilating Karen.
  20. Not sure why you got down voted here.
  21. Asking to see the radio operator license is little dick energy
  22. Yeah the lack of self awareness or shame is pretty impressive
  23. Good example. Corporate debt is not fixed. People often assume that corporate debt works similar to an auto loan or a car loan, but in reality it has a term, and usually a shorter term like 3 to 5 years. The corporation doesn't make payments on the principal, they only pay the interest, then at the end of the loan the entire loan is paid off. Where it gets problematic is companies like American pay off the debt by taking out a new loan, and basically just roll the debt forward without paying it down. So the real question isn't can you afford the amount of money you have loaned out, but can you afford the payment at the new interest rates? With a fixed rate mortgage. You know what your payments will be for the next 30 years, but that's not the case with corporate debt. You also need to remember that effectively no one thought inflation was possible. Other than a few pundits, Michael Burry types, and Perma bears, the entire corporate, political, and investment class assumed inflation was dead. Most importantly, the Fed has spent the last decade quite literally attempting to increase inflation and failed to the point they believed that unlimited quantitative easing and interest rate repression would have no negative impacts, and certainly not inflation. I think at this point it is obvious that they were wrong. So why does that matter? Because a company like American Airlines (and 25% of the Russell 2000) are "zombie" companies, meaning that they had no realistic path to paying down their debt. That was all well and good when their debt could simply be rolled forward into a new low interest loan. But interest rates are rising, and the corporate bond market, especially the junk bond market, is teetering on the edge of some pretty severe rate increases. Companies are going to fall like dominos when that happens. But the good news is that AA is too big to fail. Usually means chapter 11 bankruptcy, some concessions to the contracts, some furloughs, but otherwise a remarkably stable career compared to what regular folks went through during the great financial crisis.
  24. Exactly. Invest in nuclear before everyone else realizes there was only ever one answer.
  25. That's because it's not a homeless problem, it's a drug problem. There is a ton of money being spent on it, but it will do nothing because no one wants to admit that we need forcibly imprison the homeless and subject them to compulsory rehab, and reestablish the insane asylums for those who are too far gone to treat. We can work on that problem and support Ukraine at the same time.
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