***Official*** 2015 Stock Market Thread

[Imp]

Basically people buy up real estate and just hold on to it. Some rent it out but many don't since that has risks of its own. The effect is that it causes the supply to be constrained because in a normal market the PT increases would make doing buy+hold unfeasible.

Also NIMBYs who won't allow building up and terrible traffic meaning you need to live very close to have any kind of realistic commute unless you leave at the buttcrack.

According to people in Canada, it's Chinese money. Dirty Chinese money. A recent "studiy" has shown a lot of people with non-white man names have bought houses in certain areas of Vancouver. What an impartial, unbiased, and un-circumstantial scientific method...

http://www.theglobeandmail.com/news...lled-by-chinese-buyers-study/article27064577/

Wonder which column they put "Leigh" and "Lee" under.

Just go read the comments on any article in Canada about the housing bubble and you'll see a bunch blaming the Chinese. Anything about record low interest rates, mortgage fraud, subprime loans, government backed 5% down mortgages, speculation by Canadians, etc. gets downvoted.

 

[Imp]

While I'm at it...

Alleged Mortgage Fraud in Canada:
http://www.theglobeandmail.com/repo...ying-to-help-clients-qualify/article27051297/
http://www.theglobeandmail.com/repo...-fraud-bigger-than-estimated/article27110594/

Subprime lending:
http://business.financialpost.com/p...a-skyrockets-to-record-as-banks-tighten-reins

$500+ billion in government backed mortgages:
http://www.macleans.ca/economy/business/a-mortgage-monster/
http://business.financialpost.com/n...to-only-50-and-thats-as-low-as-it-plans-to-go

Previously allowed 40 year, 0 down mortgages:
http://www.cbc.ca/news/business/the-end-is-here-for-40-year-mortgages-1.745656

Bank of Canada interest rates cut to 0.50%:
http://www.cbc.ca/news/business/ban...anada-slashes-benchmark-rate-to-0-5-1.3152673

Just under 165% Debt-to-income ratio:
http://www.cbc.ca/news/business/debt-income-net-worth-1.3223917

Bank of Canada, the Economist, IMF, and others say housing market is overvalued in Canada:
http://www.cbc.ca/news/business/can...-overvalued-economist-magazine-says-1.3040698

But ya... Look over there, an elephant!

 

[sm625]

Ahhh fuck, and here I wanted to get my next house with a low interest rate while the getting is good. Ahhh well, at least I have my current home at a fucking low ass 2.75%


As if not enough millennials weren't buying houses... now they definitely aren't if rates go back up

Interest rates are a function of price. As a general rule, if rates rise, the price of a home must fall so that principal plus interest remains a relative constant. This must be true because people can only afford so much home. That is the only one and true constant. When the price of a home gets to be too high then it sucks money out of the rest of the economy, we experience recession, and prices fall. If 100,000 Chinese buyers come in with hot money fresh off the printing presses, it can prop up prices for a while, but eventually the price must fall as soon as the hot money is removed. It takes time, but it will and must happen. Ten years ago you could find dozens of articles making Irving Fischer type claims that housing has reached a permanently high plateau. Funny stuff.

 

[Charmonium]

You know, I've said the same thing to a relative who's a real estate agent. I told him that people don't buy a house, they buy a monthly payment. He said I was crazy, which is one reason I've never taken him seriously.

I don't know what the housing situation looks like in Canada, but in the US we're on the cusp of another housing boom - potentially. Although home ownership is down, household formation is up, but mainly among retirees. However I think that millenials will soon follow.

 

[MustISO]

Wow, quite an overreaction today. Guess the world really is ending.

 

[FelixDeCat]

Lower close on Monday.

Goes back up tomorrow. :sneaky:




(unless this rate fear thing takes hold, then you want to go ALL IN on QQQ puts to 100 by December Fed)

 

[sm625]

I'm looking for a pennant formation so I agree the market has to go up tomorrow. The next top should be in the range of 2097 to 2110 on the S&P 500. If we close there tomorrow that is my entry point for a nice and juicy short position.

Edit: Ugh so the market bounced a bit. I'd really like to see it close at the lows of today, around 2068. This would create a much more convincing pattern.

 

[brianmanahan]

 

[FelixDeCat]

Goes back up tomorrow.


(unless this rate fear thing takes hold, then you want to go ALL IN on QQQ puts to 100 by December Fed)

Looks like its the rate fear game in play until December.

 

[sm625]

I believe we have a confirmed hindenburg omen today. As long as NYMO remains negative we can expect to see continuing confirmations.

It is a funny thing how despite the S&P 500 being only 2% off its all time highs, fully 2/3 of all the stocks on the NYSE are trading below their 200 day moving averages. This is scary stuff. Two thirds.

 

[Imp]

I believe we have a confirmed hindenburg omen today. As long as NYMO remains negative we can expect to see continuing confirmations.

It is a funny thing how despite the S&P 500 being only 2% off its all time highs, fully 2/3 of all the stocks on the NYSE are trading below their 200 day moving averages. This is scary stuff. Two thirds.

So, only a few stocks are propping up the market?

Looks like we're in a holding pattern until the next Fed meeting or the December job numbers at least.

I was going to play POT again yesterday. Good thing I didn't because it's down 2-3% today.

 

[brianmanahan]

This is scary stuff. Two thirds.

tbh i'm not really that scared

 

[jpiniero]

Don't worry. Wall Street just has to remind who's in charge just in case they were actually really thinking about raising rates.

 

[us3rnotfound]

Don't worry. Wall Street just has to remind who's in charge just in case they were actually really thinking about raising rates.

That's what they hoped you'd say. Still down tomorrow.

 

[jpiniero]

That's what they hoped you'd say. Still down tomorrow.

I was thinking that perhaps you could see a downward trend... until someone from the Fed admits they aren't raising anytime soon. Either way I am expecting it to be pretty volitle until the meeting.

 

[Charmonium]

Generally the market improves after a rate hike. Hikes normally indicate that the economy is doing well. To the extent this is really true, the same should happen this time. Personally, I think the economy is ready for another leg of the expansion but I don't think most market participants agree, at least not yet.

 

[SketchMaster]

I love this.

 

[brianmanahan]

I love this.

holy turds! :biggrin:

 

[jpiniero]

Generally the market improves after a rate hike. Hikes normally indicate that the economy is doing well. To the extent this is really true, the same should happen this time. Personally, I think the economy is ready for another leg of the expansion but I don't think most market participants agree, at least not yet.

Stocks are so overpriced because of the low rates that any hike would mean there would have to be a correction. You have to remember that it's never been at near 0% before and never was low in general for very long.

 

[Imp]

So, I did some more paranoid thinking about buying gold.

Say I were to go to a bank and buy a kilo of gold (35 ounces x ~$1100/ounce). What's stopping the teller from following me home (bank database to look-up address), murdering me, eating my face, and walking away with a year's worth of easily fence-able salary...

 

[OverVolt]

Don't buy gold IMO unless you plan to hold it for 30 years. Gold is the type of investment that has historically done nothing for decades before a quick run up and then does nothing for decades again.

http://goldprice.org/gold-price-chart.html

The exact same thing happened in the 1980's, only less inflation back then.

Check out the "ALL" chart.

Remember the people on pawn stars bringing in bricks of silver/gold from decades ago? Yup.

 

[brianmanahan]

So, I did some more paranoid thinking about buying gold.

Say I were to go to a bank and buy a kilo of gold (35 ounces x ~$1100/ounce). What's stopping the teller from following me home (bank database to look-up address), murdering me, eating my face, and walking away with a year's worth of easily fence-able salary...

i was not aware that banks sold gold, much less by the kilo

 

[RGUN]

So, I did some more paranoid thinking about buying gold.

Say I were to go to a bank and buy a kilo of gold (35 ounces x ~$1100/ounce). What's stopping the teller from following me home (bank database to look-up address), murdering me, eating my face, and walking away with a year's worth of easily fence-able salary...

Not that it effects anything you've said but gold is priced by the TROY ounce. There are not 35 troy oz per kilo.

 

[dullard]

So, I did some more paranoid thinking about buying gold.

You are correct that gold is somewhat dangerous to hold, although your example is extreme. You should buy shares of gold, not physical gold.

But, large gold stakeholders are beginning to bail out of gold:
http://money.cnn.com/2015/10/29/news/economy/venezuela-selling-gold/

Short story: a country dependent on oil revenue is struggling and has resorted to selling off its gold for revenue. Venezuela in that article may be the first, but there are many other oil/gold rich countries with the exact same financial problems as Venezuela. Gold dropped nearly 10% (~$100/ounce) in the few days since Venezuela started selling.

What if Russia does the same? Russia has similar financial problems right now, but it has 4x the amount of gold to sell.

Not to mention that buying gold is basically a bet that the Fed won't raise interest rates. I personally think it looks more and more likely that interest rates will rise. I'd rather not be betting that interest rates will remain near zero forever.

 

[Imp]

Not that it effects anything you've said but gold is priced by the TROY ounce. There are not 35 troy oz per kilo.

Had to look that one up... It's 32.1507 ounces per kilo of gold.

i was not aware that banks sold gold, much less by the kilo

I've never done it but one major bank here says to go to your nearest retail bank to buy some.

I probably won't do it, but previous discussion got me thinking that it would be a bad idea to just have a few ounces or up to a kilo of gold for "safety." Purpose would be 99% to have an item that's held some sort of value for the past 10,000 years and won't go bad on me -- toilet paper and bullets eventually go bad if stored poorly. It's even fire proof to some degree -- too bad my corpse isn't. ETFs or storing it in a safety deposit box don't help for that?