/biz/ - Business & Finance

[Anonymous No.28873383]

why is no one on biz talking about this

[Anonymous No.28873534]

because they're all fucking memers who don't actually know anything about how markets work.

[Anonymous No.28873895]

Explain, I'm willing to learn.

[Anonymous No.28874073]

>>28873383
This may signal a coming correction, however the dollar is falling also which counterbalances the effects of a climbing treasury yield. If the dollar rises with the 10 year then you panic sell and get some hard assets

[Anonymous No.28874312]

>>28873895
jerome powel is sat in a darken room in the fed at the moment on the phone with the treasury chain smoking a pack of ciggies out of stress

[Anonymous No.28874714]

>>28873383
because idk what it means, now enlighten me please

[Anonymous No.28874939]

>>28874714
>yield goes up = people loosing confidence in the dollar
>yield goes up = high burden on the economy for all the debt
>yield goes up = stock market crash
>yeild goes up = fed prints money and buys bonds to bring yield down
>fed prints money and buys bonds to bring yield down = dollar loses confidence even faster and yield goes up
>dollar loses confidence even faster and yield goes up = fed prints money and buys bonds to bring yield down
repeat until collapse

[Anonymous No.28875299]

>>28873383
Literally made a post about this in the morning

[Anonymous No.28875388]

>>28874714
>>28874073

eh this guy is somewhat correct >>28874939

yield goes up = people sell their stocks and buy bonds because bonds are a much safer investment. everyone knows the stock market is a bubble right now and the only reason they arent in bonds is because none of the bonds currently even beat inflation, so they lose money. so its better to buy "safe/solid" stocks right now... unless the treasury yields can beat inflation - then everyone will dump their riskier stocks and preserve their wealth via bonds, which are gauranteed by the full force of the US Gov't.

bonds are literally the safest investment if the yields can beat inflation

people who need to grow their money, rather than simply preserving it, wont give a fuck about bonds anyway because bonds do not appreciate in value like stocks - theres no money to be made in bonds

[Anonymous No.28875472]

>>28875299
link?

[Anonymous No.28875509]

>>28873383

Just means people are optimistic about the economy and inflation is picking up, now if the fed can handle it is the other question. Shorting bonds has been the trade for a while now, but I guess main stream media has finally picked up on it considering people are posting about it on 4chan

As a contrarian indicator id give this run another 1-2 months before the fed has to do something

[Anonymous No.28875603]

>>28874939
this. the market is very scary right now and the interest rate is already 0%; so we have no cushion to fall onto. If we have even a minor economic crash, it could be the feather that breaks the camel's back.

We are about to enter another recession; and with corporate debt to GDP reaching nearly an 80% ratio - this could actually be worse than 2008.

My advice: Hold cash for the next month. You might miss out on some of the crazy random gains that happen in an inflated market, but you'll thank me when you survive the crash and get to buy the dip.

[Anonymous No.28875695]

>>28875472
>>28865782
It was a dead thread

[Anonymous No.28875696]

>>28873383
I'm tired of posting with you retards

[Anonymous No.28875725]

>>28874939
>>28875388
>checked and
thanks based /biz/ bros

[Anonymous No.28875868]

>>28875603
Should I move my retirement fund stocks into bonds? Obviously can’t take the cash out

[Anonymous No.28875909]

It's at all time lows. It has to reverse course if we're going to recover economically.

[Anonymous No.28876118]

>>28875868
buy gold

[Anonymous No.28876230]

>>28875909
your right, your just missing out the part where you explaing that recovering economical means deleveraging which at this level of debt will only occur through hyperinflation or 2x the 1930s level of deflation

[Anonymous No.28876234]

>>28875868
listen to this anon >>28875388
If the bonds can beat the inflation rate then yes; but you shouldn't expect to gain money off the bonds.

I think the decline will mainly be slow. There might be a few harsh days where we hit a circuit breaker, but I wouldn't expect serious crashes. So if you're into making money then consider investing in precious metals in the medium term (as an alternative to holding cash).

[Anonymous No.28876237]

>>28875388
Yields go up which are inversely related to price as people sell bonds. This is why government central banks loves ultra low treasure yields or utilize open market operations to push yields down.

[Anonymous No.28876310]

>>28873383
veve

[Anonymous No.28876352]

>>28873383
>+0.087

[Anonymous No.28876385]

>>28876352
dumb bitcoiner

[Anonymous No.28876386]

>>28876234
>>28875868
if it's an IRA that you're talking about, and you're interested in buying precious metals, then check out ETFs that are directly backed by metals: PSLV, AAAU, IAU etc

[Anonymous No.28876759]

>>28875868

Why would you buy bonds during the greatest rate of change growth in inflation we’ve seen in over a decade? Bonds are a deflationary bet; as in you think shit will hit the fan. In reality, the economic rate of change data in the macro world is about the best it’s been since WW II. That’s why stocks keep going up, and will continue to go up.

Ironically, the only thing that will end the speculative bubble in equities is the FED. Greenspan triggered the dot com bust, and if inflation gets out of control, the fed will also have to pump the brakes on this bubble.

[Anonymous No.28877073]

>>28875388
so you're saying if the yield goes from 1% to 2$ then people are going to dump their 7% dividend stocks?

>everyone knows the stock market is a bubble
the stock market is almost always overvalued because it's speculative based on the future value
rarely are market bubbles marketwide, almost exclusively sector-based

[Anonymous No.28877103]

>>28873534
>>28873895
>>28874073
>>28874312
>>28874714
>>28874939
>>28875299
>>28875388
>>28875472
>>28875509
>>28875603
>>28875695
>>28875696
>>28875725
>>28875868
>>28875909
>>28876118
>>28876230
>>28876234
>>28876237
>>28876310
>10 year yield goes up
>10 year bond is considered extremely safe since it's guaranteed by gov't
>interest rate on all other debts rise as creditors need justify additional risk (why lend to Joe the plumber or Tesla at 1% when gov't gives 1.3%?)
>people pull money out of stonks to cover increasing debt costs
>large institutions pull money out of overheated, speculative stonks and place them in comfy bonds with shiny new yields
>stonks and crypto crash 50%-90% since both are highly speculative
>gold crashes 10%-20%
>gold recovers within weeks (as it always does when the economy gets fucked)
>stonks and crypto remain low until Fed/gov't prints and sends out 100's of trillions of dollars in stimulus checks
>... IF... Fed/gov't prints and sends out 100's of trillions of dollars in stimulus checks
are you lads ready for the greatest rugpull in human history?
His Excellency Dr. Jelle Zijlstra and William R. White tried to warn you, but did you listen?

[Anonymous No.28877242]

>>28877073
Dividend stocks have a floor, anon. Tesla and growth doesn't really have a floor, but probably won't go to zero.

[Anonymous No.28877436]

>>28877103
You're acting like the whole world cares about US bonds.
I'm putting most of my salary in cryoto no matter what.

[Anonymous No.28877437]

>>28877242
You're assuming if I sell a growth stock my option is:
1. Buy 2-3% yielding bond
2. Hold cash
But you forgot
3. Put in higher yielding divie that is increasing in cap gains and dividend

[Anonymous No.28877570]

>>28877103

Yeah, except in real life people chase yield and aren’t going to drop equities in a risk-on environment to get a measly 2% yield on bonds. If you weren’t dumb and knew to go after beta, you could get XLE and instead be +20% YTD alone. Inflation going up makes bonds a terrible vehicle to dump money in as literally everything goes up in price; you don’t even have to know what you’re doing. Even fucking Japan recently made a 30 year high in the Nikkei.

[Anonymous No.28877583]

>>28877436
yes
retail is stupid and poor
and it will remain stupid and poor

[Anonymous No.28877797]

>>28877437
No, anon, you're missing the point. You can sell your growth whenever you want to and invest in whatever. That doesn't mean that growth as a whole won't get cucked. My argument is that some stocks, like dividend stocks, always have a floor if they can keep their divvy.

If you wanna invest and MO and T for sweet dividends, that's fine and as long as they can afford their divvy, they're going to be basically high yielding bonds. The problem is that divvies aren't a promise and as we saw with RDS, covid, not WWII of all things caused them to cut their divvy.

[Anonymous No.28878082]

Everyone here is a fucking idiot. The yield going UP means the price of the bond is going DOWN because it's not as attractive as another opportunity and the coupon is a larger portion relative to the market price. People only care about the 10 year when it hits 3-4%.

[Anonymous No.28878139]

>>28876352
Brainlet.

[Anonymous No.28878146]

>>28877797
Stocks already locked in a low note yield, even if interest rates rise they won't have any interest risk. Increasing bond yields by itself isn't going to crash the stock and it won't make the bond more attractive than the divvie.

[Anonymous No.28878177]

>>28877437
>3. Put in higher yielding divie that is increasing in cap gains and dividend

thats tough to do in a down economy tho. divvy stocks are "safer" than growth stocks but they can still tank with the stock market. last year many companies had to decrease their divvies because they weren't pulling in as much revenue to pay out. so you're likely to get share price decrease AND divvy decrease in a down market

>>28877570
>Yeah, except in real life people chase yield and aren’t going to drop equities in a risk-on environment to get a measly 2% yield on bonds
People who already have money and don't need maximum growth prefer bonds because there is literallly NO RISK in bonds unless inflation rate is higher than the bond yield, OR the united states gov't ceases to exist.

if you have 10m$ you're not putting it all into fucking growth stocks because its risky. if you have 10,000$ then yes you need to be all-in on growth stocks because you're fucking poor and need to grow your wealth

[Anonymous No.28878328]

>>28877583
what am i looking at, anon?

[Anonymous No.28878350]

>>28878082
>People only care about the 10 year when it hits 3-4%.

the 30 year is now about 2%, which is the stated target inflation rate from the fed. in reality, real inflation is probably double that, so the 30yr is still losing you money, but the higher the yields get, the more money will be taken from the stock market and put into the bond market

i dont think i'd buy bonds anyway, i'd rather just have gold in my hand

[Anonymous No.28878365]

>>28877103
What if I have 500k savings but not invested in gold, stocks, or crypto? What happens to my savings then?

[Anonymous No.28878465]

>>28878177
>. divvy stocks are "safer" than growth stocks but they can still tank with the stock market. last year many companies had to decrease their divvies because they weren't pulling in as much revenue to pay out
A lot of them *could* have paid out because they increase their divvy like a slug, but they didn't in order to play it safe and ensure their company would have the cash. Regardless, you can hedge against divvy risk by buying dividend aristocrats that have increased during the dotcom bubble

[Anonymous No.28878592]

>>28878146
I wasn't arguing if there's a crash or not. But, just that some stocks would be less hit by it. People invest in Tesla because they think they can sell it for a higher price later. People invest in dividend stocks because there's a certain level of income you get just from holding the stock.

[Anonymous No.28878604]

because it's insignificant

[Anonymous No.28878738]

>>28877583
>>28878328
>Smart money flow index or smart money index (SMI) is a technical analysis indicator that attempts to show the current market sentiment of investors. The index was created and made popular by Don Hays, who was a money manager. The SMI indicator uses intraday price patterns to measure bullish or bearish sentiment.

The SMI indicator is based on the theory that many traders are both emotional and react strongly to overnight headlines and new economic reports at the beginning of the trading day in the futures market, pre-market , and the opening bell. At times there is high volume buying with market orders and short covering at the opening bell in the stock market that can show investors and traders overreaction in the morning. The basic strategy using the smart money flow index is to trade against the morning price move and trend and trade with the evening price trend. The SMI can be calculated for several markets and market indices like the S&P 500 and Dow Jones Industrial Index.

[Anonymous No.28878778]

>>28875388
>yield goes up = people sell their stocks and buy bonds
Not if yields are expected to continue to rise, because then the bonds you just bought would fall in value.

[Anonymous No.28878831]

>>28877103
This this so much. Crypto is going to 0, get into USD immediately

[Anonymous No.28878857]

>>28875509
>people are optimistic about the economy and inflation is picking up
These may be two very different things. A stagflation is not out of the question.

[Anonymous No.28878876]

>>28878177

> People who already have money and don't need maximum growth prefer bonds because there is literallly NO RISK in bonds unless inflation rate is higher than the bond yield, OR the united states gov't ceases to exist.

...Or the 5% hit you took holding bonds, and the +30% run up you missed in equities? I’m not sure “who” exactly you’re talking about, but holding bonds in this environment is literally retarded. I’d you managed money and held bonds you would be out of a job. You would have performed so POORLY compared to even the broad indices. Bonds are for risk-off environments, if you hold them outside of that you deserve to lose your money.

Again, who exactly are you referring to? You think retail traders are interested in bonds? You think hedge funds or money managers are? Anybody who has a significant % of their portfolio in bonds in this specific market environment is an absolute clown and should just go back home.

[Anonymous No.28879004]

Why do you guys insist on worrying so much. The clown economy is built on boom/bust cycles, we get it. Stay diversified and prepared and keep making your hay. You're literally wasting life counting down the days, weeks, months and years until the next dump. There will always be booze and pussy no matter how bad the economy gets.

[Anonymous No.28879005]

>>28878365
It suffers from inflation.

[Anonymous No.28879022]

>>28878831
they really aren't sending their best fudders. if the stock market crashes that means everyone is going to move their funds into crypto you brainlet

[Anonymous No.28879137]

>>28878876
never post again you absolute brainlet

[Anonymous No.28879167]

>>28873383

We are in $CLF

[Anonymous No.28879209]

>>28878365
It buys ~12.5k less stuff every year on average. Basically you're fighting yourself

[Anonymous No.28879219]

>>28876352
Don't you get it bro, if you put your money there you will be a millionaire in 539 years.

[Anonymous No.28879250]

>>28878857

How are you bringing up stagflation when world economies are showing better growth in rate of change terms than in any point in the last 30 years?

Wanna know why gold has underperformed so badly as of late? Because we have REFLATION, not STAGFLATION.

Inflation = UP
Growth = UP
= REFLATION

STAGFLATION is no growth high inflation

GROWTH = bad for gold, as its yields are low compared to equities.

[Anonymous No.28879361]

>>28878876
>Anybody who has a significant % of their portfolio in bonds in this specific market environment is an absolute clown and should just go back home

thats exactly what I'm saying, but as the yields rise, bonds become more attractive to investors. so they sell some stocks and buy bonds, that causes the stock market to fall. right now, at this exact moment, not many people are holding bonds, but every basis point those yields go higher - bonds start to look more attractive

remember the market isn't all bulls - there are bears out there who just want to preserve their wealth and gain a nominal 2-5% each year with NO RISK. they dont need the 30% gains from stocks. bonds are the least risky asset. the more money you obtain, typically the less risky you become

[Anonymous No.28879397]

>>28878365
depends on whether you hold physical Federal Reserve notes or worthless digital dollars at the bank
if you have more questions take a look at my picture

[Anonymous No.28879401]

>>28879137

Alright CLOWN, as a tip, try to shill bonds when they haven’t just dropped 5-10%

[Turbo Tax No.28879438]

>>28877103

I think a bigger rug pull maybe housing prices falling back down even if you locked in a fixed yield.

Locking in high principal mortgages seems like a train wreck when the reason these assets are being inflated is more so that there's very easy access to cheap debt and less of actual fundamentals. At least the SP500 can make use of all these people giving them cheap dollars to play with.

[Anonymous No.28879482]

>>28879137
Says the person who thinks the principal you have influences your investment decision

[Anonymous No.28879513]

>>28878831
Lel

[Anonymous No.28879722]

>>28877103
you are not even wrong.
The 10 year treasury bond is the benchmark for interest rate on loans, if the interest rate start to rise all future loans will become increasingly expensive, US corporations, Citizens and the government has so much debt that it is impossible to pay off (with the exception on a very long time frame), once their loans expires and they have to pay back, they issue new loans.
with a higher interest rate, having such a massive debt burden becomes unsustainable, as "just" paying the interest rate will be an insurmountable economic burden.

[Anonymous No.28880188]

The stupid sensationalist "analysis" that happens every year or two is beyond tired.

[Anonymous No.28881059]

>>28874073
I don’t get it, isn’t the dollar rising = good?

Dollar increases in value = good?

Economics make no sense sometimes

[Anonymous No.28881795]

>>28881059

the dollar and the yield are related. if the yields rise but the dollar falls, then its fine, no need to panic

if yields rise + dollar rise = sell everything because that signals people are cashing out of stocks in favor of USD and US treasury bonds and your stocks are about to crash. buy gold

[Anonymous No.28882004]

>>28881795
I see, thank you

[Anonymous No.28882961]

>>28881795
if yields of us bonds are rising that would suggest that the price of us bonds are following meaning people are selling, no?

[Anonymous No.28882988]

>>28878177
>holds IG bonds during covid
>S&P 500 around 20% higher than pre-covid
nothing personnel kid

[Anonymous No.28883865]

>>28881795
Irrelevant nowadays, no retard is going to buy US treasury bonds. It's literally fake money. People will choose swiss franks, PMs or land for the schizos. Muttland's days are counted.

[Anonymous No.28883876]

>>28879022
Just like in march 2020 eh?

[Anonymous No.28883888]

Just spiked a few minutes ago. DXY up too. But VIX only moderately up.

[Anonymous No.28883917]

>>28882988
>>holds IG bonds during covid
>>S&P 500 around 20% higher than pre-covid
>nothing personnel kid

>misses the whole point
yeah bonds are shit right now - thats why the yield rising is a problem for the stock market. higher yields = people dump stocks and flock to the safer investment of bonds

>>28882961
>>28882961
>if yields of us bonds are rising that would suggest that the price of us bonds are following meaning people are selling, no?

the bond market is supply / demand. whenever demand is too low, the yields rise to attract more buyers

i guess the main takeaway in all this is:

right now, there is alot of money in the stock market that doesnt really want to be there. it is only there because stocks are beating inflation right now and bond yields are not.
so you have a choice:
either GAIN money in the stock market and accept far more risk, or LOSE money in the bond market and assume no risk. most people have gone into the stock market because the other option is to literally lose money, guaranteed from low yield bonds that cant beat inflation. other options include real estate, which is booming, crypto whcih is booming, and precious metals which are doing OK. most people dont want to get into real estate, crypto, or PMs, and they choose the stock market because its the easiest for them and they can somewhat understand it.

once treasury yields rise to an attractive level, these people will dump the stocks that they didnt really want and go back into bonds

[Anonymous No.28884007]

>>28874073
dxy is up

[Anonymous No.28884383]

>>28883917
Central banks will do everything so that both the bond market and the stock market don't shit the bed, I'll be risk on as long as this music is playing. The only risk right now is NOT being in the game, because you'll just get fucked by inflation as assets inflate due to the stimulus.

[Anonymous No.28884590]

>>28879250
holy shit JPow literally signs your checks doesnt he

[Anonymous No.28884644]

> us 10y yield up
> us every maturity up
> other countries' yields are going up too
> meanwhile US banks are piling into federally secured mortgages
> federally backed mortgages are by government decree classified as performing and it's extended from march to june 30

I don't like it bros, they know what's coming but when will they try to SCRAM it?

[Anonymous No.28884666]

What's there to talk about? Slowly-rising rates is a good thing and should be expected. It shows trust in the long-term state of the economy.

[Anonymous No.28884680]

>>28873383
How does this stuff actually work? Doesn't the us government offer them at fixed rates?

[Anonymous No.28885247]

>>28884383
>Central banks will do everything so that both the bond market and the stock market don't shit the bed

they fuckin better or its ogre.

[Anonymous No.28885408]

>>28884666
>Slowly-rising rates

these arent slowly rising. last week we were at 1.15, now we're almost 1.30. thats considered somewhat significant for the 10 year, its pretty quick

[Anonymous No.28885748]

>>28877436
Retard

[Anonymous No.28885941]

>>28879022
we've never seen this happen.

[Anonymous No.28886038]

1.296 now

[Anonymous No.28886278]

>>28885408
Exactly and precisely this. We are MOONING. An increase in the 10 year WILL increase lending rates. When mortgage interest rates increase that means there less people can refinance if they got in at these current low rates. Higher rates will reduce the sale price of real estate but the buyer's monthly payment will be similar. However the buyer will have a better opportunity to refinance when rates get lower and they will have a smaller house payment sans interest.

[Anonymous No.28886302]

>>28885408

because idiots are like 3 months slow and think covid depression blah blah blah is still a thing. The reality is that the economy is strong and will peak next quarter. When the economy is strong bonds go down, bond yields go up. Now everybody is chasing the inflation train and getting free money from equities.

[Anonymous No.28887059]

There it is

[Anonymous No.28887841]

>>28887059

I'm selling everything at 1.50% and going into gold

[Anonymous No.28887887]

>>28886302
Consumer confidence in present conditions decreased sharply in December and did not recover in January, even with the positive news about the vaccines. Consumer expectations had double-digit monthly over-the-year decreases in November, December, and January. These declines were the sharpest and most prolonged of the pandemic so far and indicate that pandemic fatigue may alter the upcoming rate of recovery. Altogether, the data indicate that the recovery stalled in November, that it has not resumed as of January, and that it is unlikely to do so.

Government spending is the only reason why GDP is as high as in the last report. And the government spending has not been from taxes but instead printed money. We hit 44% of government spending as GDP in 2020. FOUR AND FOURTY PERCENT OF GDP!

[Anonymous No.28889170]

>>28877103
Bump