Topic: The largest stock market bubble ever seen is finally Ko'd by Covid-19

[conman]

Not pretending to he in the know, but Deutsche Bank seems to be a disaster waiting to happen. It's the biggest systemic risk out there. I am not sure nationalising it will save anything.

If you want information on DB, the link below is a place to begin. There are more references to other articles.

https://wallstreetonparade.com/2019/09/the-repo-loan-crisis-dead-bankers-and-deutsche-bank-timeline-of-events/

Or try this
https://youtu.be/MFhQNugglXk

Oh, i didn't know they would be the candidate for the mystery bank that's in a terrible REPO mess.

[conman]

If anyone hasn't seen it yet, you should watch The Big Short, which is an inside view of the beginning of the 2007 crash,

<a href="https://www.youtube.com/v/vgqG3ITMv1Q" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">https://www.youtube.com/v/vgqG3ITMv1Q</a>

[Gnurglan]

I dont see that happening with the bond market, but I'm not a person that would know.

I think it has to break this time. Last time they propped everything up and exasperated the problem with cheap credit.

Unfortunately, rate cuts and quantitative easing are less effective than they originally were.

Like a crack addict needs more crack over time, inflated economies need more stimulus.

I'll check out George Gammon now.

I can't say I know either.

Agree that it will break this time. That's the scary thing. There are too many parameters that are bad. Record values, record debt, numerous zombie companies, a combined demand shock and supply shock and record amounts of people about to retire (likely to sell shares).

Just today I watched a video from Gammon where he claimed that the drop from the last few days is nothing. It could well go down another 50% from here if we compare overall value with GDP.

[conman]

I can't say I know either.

Agree that it will break this time. That's the scary thing. There are too many parameters that are bad. Record values, record debt, numerous zombie companies, a combined demand shock and supply shock and record amounts of people about to retire (likely to sell shares).

Just today I watched a video from Gammon where he claimed that the drop from the last few days is nothing. It could well go down another 50% from here if we compare overall value with GDP.

I'd agree, i think there are more lows.

 I thinking of converting my Bitcoin to Tether to ride out some of this, then rebuy.. but I am not close enough to the action to see how the next few days/weeks will pan out.

[Gnurglan]

Oh, i didn't know they would be the candidate for the mystery bank that's in a terrible REPO mess.

Just saw this on Twitter

”This is serious. Derivatives basket case #DeutscheBank plunges below threshold identified identified as point of no return for default. At issue is Deutsche setting off a Lehman-style chain reaction collapse, as the IMF has long warned. COVID19 isn't to blame - speculation is.” @RobbieBarwick

[conman]

Just saw this on Twitter

”This is serious. Derivatives basket case #DeutscheBank plunges below threshold identified identified as point of no return for default. At issue is Deutsche setting off a Lehman-style chain reaction collapse, as the IMF has long warned. COVID19 isn't to blame - speculation is.” @RobbieBarwick

These twin issues of a virus and market collapse are insane.
Soon no one will be doubting this crises.

Also..

If you're forced to toss in $1.5 trillion in liquidity in 2 days you know you're knee deep in a financial crisis.

And imagine if they can't markets green with that.
Then what?

A lot at stake for Powell and his merry printing team.

Sven Henrich
@NorthmanTrader

[Giono]

I'd agree, i think there are more lows.

 I thinking of converting my Bitcoin to Tether to ride out some of this, then rebuy.. but I am not close enough to the action to see how the next few days/weeks will pan out.

I agree abput the retired folks or near-retired. Some probably got sucked into the sugar high when really they should have been reallocating to more fixed income securities.

[conman]

The share price of DEUTSCHE BANK has COLLAPSED!

It is now trading at 4.87 Euros or $USD 5.51 per share!

In 2019, @NennerResearch told  @USAWatchdog in an interview that once Deutsche Bank traded below $USD 6.40 per share, everyone should RUN FOR THE HILLS!

For reference, it was €10 in February, and in 2008 as high as €120.

[FlashGordon]

So will the world finally realise there has to be another way. Putting so much trust in something as volatile as a stock market means we are never far from a financial crisis. I don't know the answers but hyper capitalism has failed us over and over again.

[Ashburton]

If anyone hasn't seen it yet, you should watch The Big Short, which is an inside view of the beginning of the 2007 crash,

<a href="https://www.youtube.com/v/vgqG3ITMv1Q" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">https://www.youtube.com/v/vgqG3ITMv1Q</a>

I watched that last week, good film but depressing as fuck.

[Ashburton]

The share price of DEUTSCHE BANK has COLLAPSED!

It is now trading at 4.87 Euros or $USD 5.51 per share!

In 2019, @NennerResearch told  @USAWatchdog in an interview that once Deutsche Bank traded below $USD 6.40 per share, everyone should RUN FOR THE HILLS!

For reference, it was €10 in February, and in 2008 as high as €120.

So does this mean overnight bail out by the German taxpayer?

[Gnurglan]

These twin issues of a virus and market collapse are insane.
Soon no one will be doubting this crises.

Also..

If you're forced to toss in $1.5 trillion in liquidity in 2 days you know you're knee deep in a financial crisis.

And imagine if they can't markets green with that.
Then what?

A lot at stake for Powell and his merry printing team.

Sven Henrich
@NorthmanTrader

It really is insane. I hope they find a way to glue this together once more because the effects of a collapse would be a complete disaster for so many people. I don’t mean to prop up the market, I mean to slowly deflate it instead of having a big crash. But I believe they are fighting a losing battle. There is a need for interest rates to go up. We can’t and shouldn’t keep insolvent companies alive forever. This policy punishes savers and rewards borrowers and they won’t let the market correct. But they can’t fight the entire market forever.

[Cruiser]

A lot of big sharks are circling the seas right now.....ready to scoop up cheap stocks.

[Ashburton]

A lot of big sharks are circling the seas right now.....ready to scoop up cheap stocks.

Of course.  Privatise profits and socialise losses.

[conman]

So does this mean overnight bail out by the German taxpayer?

I've no idea..

Bailouts, nationalisation, i don't know. But as per one of the first posts of mine in this thread (the one with the graphs), if Deutsche goes, just look at the queue of banks that are ready to collapse behind it.

For reference, these are the 10 Largest Banks in Europe (2019).

1. HSBC Holdings plc, GBR - €2,100.13 Billion.
2. BNP Paribas SA, FRA - €1,963.43 Billion.
3. Crédit Agricole Group, FRA - €1,763.17 Billion.
4. Deutsche Bank AG, DEU - €1,470.38 Billion.    (fucked)
5. Banco Santander SA, ESP - €1,446.15 Billion.   (in freefall)
6. Barclays plc, GBR - €1,275.62 Billion.               (in freefall)
7. Société Générale SA, FRA - €1,275.13 Billion    (in freefall)
8. Groupe BPCE, FRA - €1,259.42 Billion
9. LLoyds Banking Group plc, GBR - €914.14 Billion
10. ING Groep NV, NLD - €846.22 Billion

I didn't even check all the above..

[Gnurglan]

So does this mean overnight bail out by the German taxpayer?

Actually, I think there are two other scenarios. One is there will be a bail in, that is Deutsche Bank will essentially steal money from savings accounts. If you have money parked at DB, you will have to save them. The other is that we will have a political solution of some sort with debt written off. I can’t recall where I heard/read these, but probably Real Vision. It’s not a problem isolated to Germany and its tax payers. It would be a true disaster. That much I can tell.

[Ashburton]

Actually, I think there are two other scenarios. One is there will be a bail in, that is Deutsche Bank will essentially steal money from savings accounts. If you have money parked at DB, you will have to save them. The other is that we will have a political solution of some sort with debt written off. I can’t recall where I heard/read these, but probably Real Vision. It’s not a problem isolated to Germany and its tax payers. It would be a true disaster. That much I can tell.

Well that's quite grim reading, and presumably why so much money has fled the markets with everyone selling off to try and get ahead of the big players falling over?

[Gerry Attrick]

Reading this thread educates, intrigues and terrifies me in equal measure

[Gnurglan]

Of course.  Privatise profits and socialise losses.

Yes, but this situation is mainly caused by governments. They have fucked up big time. What they should have done is let the banks fail a decade ago. Instead they saved them and created an even bigger mess. That’s where we are today. And now they will try and do the same thing once more. The trouble is they get more and more on the hook and when one goes down, everything goes down.

[Gnurglan]

Well that's quite grim reading, and presumably why so much money has fled the markets with everyone selling off to try and get ahead of the big players falling over?

Your guess is as good as mine. I have no idea how stocks are down, bonds are down, Bitcoin etc are down, gold is down and all of them at the same time. 

[conman]

Yes, but this situation is mainly caused by governments. They have fucked up big time. What they should have done is let the banks fail a decade ago. Instead they saved them and created an even bigger mess. That’s where we are today. And now they will try and do the same thing once more. The trouble is they get more and more on the hook and when one goes down, everything goes down.

Yep. That's it.

Bad companies should be let fail, better companies will always come along to take their place.

[conman]

Your guess is as good as mine. I have no idea how stocks are down, bonds are down, Bitcoin etc are down, gold is down and all of them at the same time. 

yea, but also, they want to store their value in the short term. so people are buying the dollar and bonds. Once they have confidence in the markets again (typically on what the Fed/ECB say/do), then they will start putting their money in and buying stocks at a lower price.

[rodderzzz]

if youve got a spare 5 grand is now a good time to jump in, and where?

[Gnurglan]

yea, but also, they want to store their value in the short term. so people are buying the dollar and bonds. Once they have confidence in the markets again (typically on what the Fed/ECB say/do), then they will start putting their money in and buying stocks at a lower price.

Yeah, that would explain things. There seems to be a real shortage of USD, so owning USD must be a good bet right now. And it’s then bad to have you debt in USD. Which many seem to have.

[conman]

if youve got a spare 5 grand is now a good time to jump in, and where?

and where?

[Gnurglan]

if youve got a spare 5 grand is now a good time to jump in, and where?

Look, you’re not talking to a professional here. I’ve read and watched a lot of stuff and realised how little I know. I’ve kept watching videos because I’m fascinated by the approach of the investors and their use of data and their analysis. But I’ll say this: don’t enter the market now. Instead pay off any debt you have or just save. If you want to invest, use the next few months or even years to learn before you buy anything. You could miss out on an opportunity, but you may also sit out perhaps the worst market crash you will ever witness in your life time. We are talking worse than 1929 if things go really bad.

One place to start could be to watch Real Vision. Look up a video where Grant Williams speaks to Anthony Deden.

[conman]

"There are decades where nothing happens; and there are weeks where decades happen"

[Giono]

if youve got a spare 5 grand is now a good time to jump in, and where?

Is that free advice? Could be expensive.

[conman]

Personally, I'll be buying more BTC next week. It's one assymetric return that I am confident in.

Otherwise, I'd be patient and let the dust settle a little.

Bonds = Will more or less hold Value
Dollars = As Gnurglan said. It will retain some of the value, especially against the pound and euro.
Gold = Once QE is announced. Gold will do well, anywhere between 30% -> 200% is being mooted over the next few years)
Bitcoin = Has the potential for the biggest return ($5k --> +$100k in 1.5 years). Considered more of a risk as it's new and untested in these waters.
Stocks = Teleconferencing & Hygeine companies should do well over the coming years as you can imagine.

https://twitter.com/RaoulGMI/status/1160214887034957827

This is not professional advise.

[Iska]

if youve got a spare 5 grand is now a good time to jump in, and where?

It’s a much better time than it was a month ago, but the right answer is that nobody knows what’s coming next.

[Red Beret]

So will the world finally realise there has to be another way. Putting so much trust in something as volatile as a stock market means we are never far from a financial crisis. I don't know the answers but hyper capitalism has failed us over and over again.

It's certainly failed US, but there are people out there poised to make an absolute killing.  So to answer your question, no - nothing will change.  There's just too much money involved, and like a gigantic roulette wheel, there's always somebody hoping to win big on 13 Black.

Very apt that tomorrow is Friday the 13th.

PS: with DeutscheBank sinking faster than the Titanic, what will this do for Trump?  He's up to his eyeballs in hoc with that lot, and, as I recall, is embroiled in court action to stop Congress from getting access to paperwork.

[conman]

Traders can make the same money in a day when it's all crashing, that they would normally make in 5-10 years.

[FlashGordon]

Yeah that's the problem.

[conman]

Yeah that's the problem.

exactly.

This financial system is entirely broken. It's time for a new one. Papering over the cracks by printing money out of thin air is not a solution, it's merely a reprieve that ultimately exasperates the problem in the long run.

[Gnurglan]

So will the world finally realise there has to be another way. Putting so much trust in something as volatile as a stock market means we are never far from a financial crisis. I don't know the answers but hyper capitalism has failed us over and over again.

You will find quite a few who disagree this is a failure of capitalism. They'd argue that the main problem leading up to this is governments getting involved and essentially fucking things up.

A recent example of that is when the interest rate in the repo market spiked to 10% in September. That's banks dealing with each other. One bank needs cash and offers something to swap for a short period of time. Then they will repurchase later on and they pay interest to make it happen. 10% caused fear. The Federal Reserve immediately jumped in, ensured money was available and interest rates went down to 1-2%. The problem now is all banks know the Fed will come in and save them. who pays for it? Tax payers. In a free market the interest rate would have been 10% and no banks would be saved if they fucked up. You and I would get interest on our bank accounts. In some countries people have to pay the bank interest to have money in the bank. And that is money the bank can freeze if the shit hits the fan. Savers pay for that pleasure. It would not be possible if it wasn't for governments getting involved. And it's low interest rates and easy money which has created bubbles in the 2000s.

[Gnurglan]

Yeah that's the problem.

They can also lose. Lots of investors and traders have lost big money this year. We can be sure of that.

[Gnurglan]

exactly.

This financial system is entirely broken. It's time for a new one. Papering over the cracks by printing money out of thin air is not a solution, it's merely a reprieve that ultimately exasperates the problem in the long run.

The likely solution is that many businesses need to go bust. It won't be pretty. It will be very, very ugly and terrible for most of us. I am old enough to remember the dot com bubble. It was crazy over here. We had companies that were valued at £10M and it was a few modems in someone's wardrobe. Such companies, when exposed, shouldn't get another lifeline so the value stays the same. They should go out of business or be valued differently.

[thejbs]

The problem is that global economic crashes lead to millions of deaths. This is the real pandemic.

[Lush is the best medicine...]

The likely solution is that many businesses need to go bust. It won't be pretty. It will be very, very ugly and terrible for most of us. I am old enough to remember the dot com bubble. It was crazy over here. We had companies that were valued at £10M and it was a few modems in someone's wardrobe. Such companies, when exposed, shouldn't get another lifeline so the value stays the same. They should go out of business or be valued differently.

the reason why it had those valuations is that there are a few that ultimate were worthwhile after making large losses (Amazon, Facebook, google I think made big losses early on) so hedge funds/investors will pump up those with the potential to be the next superstar that will give them a huge return, the recent collapse of wework stock price is one example of when it goes sour, wouldn’t be shocked if Uber end up in serious shit soon as they keep losing silly money and driverless cars don’t look like they’ll here en masse anytime soon, as a consumer I guess just take advantage of them whilst it’s cheap

[cdav]

I think the biggest part of the issue is that rather than reflecting the underlying fundamentals of the economy (and businesses) a stock market is effectively a function of confidence, its meaningless. For the past decade, people have thought in a low interest environment central banks will always prop up the system.

But we are now in complete uncertainty were we could have shutdowns of markets for months and potentially a significant reduction in the size of the working population. There is no amount of action that can make you confident in such circumstances.

Some people have been calling crisis for the past 10 years- perhaps this is the time it comes true?