Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (82310)	10/22/2023 11:56:13 AM
From: ItsAllCyclical	1 Recommendation Recommended By Lee Lichterman III Read Replies (1) \| Respond to of 97958

I agree with your points and the direction of the 10 year. I strongly suspect it's going to get worse (for the markets), before it gets better. However at the end of the day Powell/FED does not care about the markets. If they need to crash the markets to make the debt/US appear solvent again they will ultimately do so. Obviously they'd rather slow walk things down but if push comes to shove they can get rates lower again w/enough deflation. I make no predictions on timing of this, only that it's required at some pt. I also agree w/Brent J (Dollar Milk Shake theory) that says before the Dollar can truely have problems (as the worlds reserve) we need a spike higher given the world's debt is mostly denominated in Dollars. That will set up lower rates (for a time). ST the fact that the 10 year could only dip to 4.55 on the Hamas attacks was very telling.

To: Lee Lichterman III who wrote (82310)	10/23/2023 1:22:05 PM
From: Real Man	1 Recommendation Recommended By ItstheJourney Read Replies (1) \| Respond to of 97958

It’s all about interest rate swaps. Most people who have a mortgage are comfortably sitting in 2-3% 30 year mortgages from 2 years ago. They can’t refinance or move. Those who wrote them passed them on. Only $2 trillion of treasury debt is at long duration, the rest is below 10 years and Tbills. Somebody in swaps is blowing up because these are derivatives and the negative value is huge. It’s what held the markets together. A mind boggling notional value like 1 quadrillion. When rates change that fast someone is sitting on a huge negative position in these derivatives. While true that notional value is not real value, for long durations such as mortgages it’s a significant portion of it. That’s only part of the problem. Biden is running record deficits in GOOD economy. Imagine it turns bad and the government has to support failing businesses and the unemployed and the influx of early retirees. It won’t be pretty. It can potentially cause another credit downgrade of US sovereign debt, and the rates will just go higher. This crisis will be much worse than 2008 because we ran out of bailouts and have to take the tough love pill of letting free markets take care of the problem.