Hedge fund manager warns of looming market bubble

[Poitier]

Those guns have to be at eye level to shoot and those tasers are slow. They will get bashed with bats. Plus they are undoing concealed carry laws in Cali?

Drones cant compete with humanity.

You're talking about the prototypes... wait until T2 and T3s get unleashed on the environment

Facebook, Amazon, Google aren't buying Drone makers for no reason

 

[cinna_man]

To be clear, are we talking about a US collapse or a global collapse? Or would the former lead to the latter anyway?

To play devil's advocate, @stealthbomber , @Poitier , @Scientific Playa ....

-Why would the powers that be allow a collapse to happen? With so much at stake, technologically and monetarily, why would the world leaders allow a collapse to happen?
-Isn't the money just paper? No real meaning behind it? As long as people work, the same production gets done. My understanding of economics is that it's based upon production, so as long as people don't stay home from work, it's just a matter of paper pushers coming to agreements. Ok, that's oversimplifying things a bit, but how wrong am I?
-Quality of life is higher than ever, right? You say the middle class is disappearing, but doesn't the middle class now have way more than the middle class did back 100 years ago?
-The world is too economically interconnected to allow anyone to collapse. We may owe China a ton of money, but we're also China's biggest consumer. Global money investing as well as trade of goods seems to be so great that no one would let anyone else collapse.
-I'm familiar with the Glass-Steagall Act, but mostly from the mouth of my crazy uncle who's in the LaRouche PAC, so I never looked at it very hard. I'll read up on it now, but feel free to explain that one.

 

[stealthbomber]

To be clear, are we talking about a US collapse or a global collapse? Or would the former lead to the latter anyway?

a US collapse that would lead to a global slow down, it would hit some places harder than others

To play devil's advocate, @stealthbomber , @Poitier , @Scientific Playa ....

-Why would the powers that be allow a collapse to happen? With so much at stake, technologically and monetarily, why would the world leaders allow a collapse to happen?

at a certain point they won't be able to control it. they can keep playing the monetary game, but china won't buy our debt forever and when that happens watch out because its only gonna get worse.

this is the part that's hard to figure though because all the worlds leaders have a stake in global economic stability, but like i was saying before the collapse will happen when americans, on a macro scale, can't pay their debts and the banks

-Isn't the money just paper? No real meaning behind it? As long as people work, the same production gets done. My understanding of economics is that it's based upon production, so as long as people don't stay home from work, it's just a matter of paper pushers coming to agreements. Ok, that's oversimplifying things a bit, but how wrong am I?

thats true and if we're gonna get philosophical the economy isn't a real thing. money is just what we believe and trust in. as long as we trust that money has value, it does. as long as purchasers of debt believe they will get paid back they'll keep buying debt. but at some point they will lose faith in the value of the US dollar. national debt doesn't matter until it does matter. as it rises that doesn't mean anything, until people as a whole say "the debt is too high and i don't trust the US to ever lower it" then all hell breaks loose

-Quality of life is higher than ever, right? You say the middle class is disappearing, but doesn't the middle class now have way more than the middle class did back 100 years ago?

quality of life =/= disposable income. of course we have a high quality of life than the 60s, but the middle classes disposable income has been going down. all the middle class is is a group of people who have disposable income to spend on goods. they spend a majority of the money on holidays, they buy new cars, new tvs, new technology, etc. that's why they're the most important factor in a strong economy, they keep businesses going.

-The world is too economically interconnected to allow anyone to collapse. We may owe China a ton of money, but we're also China's biggest consumer. Global money investing as well as trade of goods seems to be so great that no one would let anyone else collapse.

again at a certain point the pressure on the system will be too much to bear. thats why we had to pump 3/4 of a TRILLION dollars into the banks. just think about that. the whole world has a stake in our stability but with the way we allow banks to operate (ill explain next in the next answer) they're structurally broken and destined to fail.

-I'm familiar with the Glass-Steagall Act, but mostly from the mouth of my crazy uncle who's in the LaRouche PAC, so I never looked at it very hard. I'll read up on it now, but feel free to explain that one.

glass-steagall basically stopped commerical banks (jp morgan, bank of america, etc) from using their money (aka our money) to invest in the stock market. they were a few other stipulations but that's the most important. it was passed after the great depression because they were doing the same thing banks are doing now.

like in 2008 you probably heard banks were giving out loans thats people couldn't pay for at ridiculous rates. they only did that because they could then bet against people paying those loans back in the stock market. so then when people defaulted on the loans, they foreclosed the house, got money in the market and then can turn around and sell that house again.

that's so criminal the entire banking industry should have went to prison. but they got raises instead... this is where the problem comes in. that's just ONE of the things they did (do). im sure you've heard of derivatives but i wont go into that, its just basically another way of making money by doing nothing and confusing everyone. the whole thing is basically unregulated and will eventually collapse, i can promise you that.

 

[Domingo Halliburton]

^^^^^ look who holds most of US debt it isn't china. Them not buying isn't as big of deal as people like to act.


I think banks gave out those loans because they knew they could just securitize them and sell them off to investors. They collected a bunch of fees along the way so they wrote as many as they could because they knew they would just sell them off. Ratings agencies were just as complicit.

 

[cinna_man]

But if China doesn't buy the debt and the dollar spirals out of control, they get nothing/little anyways. It's to be in everyone's best interest to prevent runaway inflation in any major country, let alone the reserve currency and largest consumer base of the world. It seems like a bit of a lose-lose situation.

I agree that bankers need to pay of course, but I don't know what the solution would be. Is there a third option besides a crash or digging a deeper hole towards a crash?
What about trying a new way of distributing money?? Like peer to peer lending for instance.
What about a different currency like Bitcoin?

Are you in favor of a world government or no? Personally, I think it's inevitable and good in the long run (if it's done right, of course).

 

[stealthbomber]

^^^^^ look who holds most of US debt it isn't china. Them not buying isn't as big of deal as people like to act.


I think banks gave out those loans because they knew they could just securitize them and sell them off to investors. They collected a bunch of fees along the way so they wrote as many as they could because they knew they would just sell them off. Ratings agencies were just as complicit.

yeah that won't cause of a collapse, but its a red flag for trust in the dollar.

again its all about making money off the back end. screwing people works in the short run but never in the long run. they got away with it this time, but eventually it wont work, they'll fail and we'll go into a depression.

But if China doesn't buy the debt and the dollar spirals out of control, they get nothing/little anyways. It's to be in everyone's best interest to prevent runaway inflation in any major country, let alone the reserve currency and largest consumer base of the world. It seems like a bit of a lose-lose situation.

I agree that bankers need to pay of course, but I don't know what the solution would be. Is there a third option besides a crash or digging a deeper hole towards a crash?
What about trying a new way of distributing money?? Like peer to peer lending for instance.
What about a different currency like Bitcoin?

Are you in favor of a world government or no? Personally, I think it's inevitable and good in the long run (if it's done right, of course).

the third option is real regulation of the banks. its that simple. if there are rules and they follow those rules, everything would be fine.

peer to peer is a ok for smaller loans but its not necessary. the banks need to just accept that they wont make 20 billion dollar profits, 4 billion should be acceptable. if they lower interest rates and allow students to take out loans that wont follow them for 20 years, give mortgages that people can pay for and not play with our money while they're holding it the economy would be much better off.

digital currency will take off one day, but were not technologically ready for it yet.

eventually, im talking 100-200 years eventually we'll be a truly global society but we have to go thru some serious shyt for that to happen. i think climate change is gonna be the turning point. once shyt really hits the fan and the climate changes to the point where global norms change, people will have to band together to distribute food and water in a productive manner.

edit: im not saying we're the main cause of climate change i think we're speeding it up but i dont feel like arguing. the climate is undeniably changing and has forever, so let's just take that as a fact and move on.

 

[Swirv]

Only collapse that I can foresee is a natural disaster otherwise the game is rigged on all levels. Not on on no illuminati crap either. Just money and power. If you are a sucker you will get played. Learn how to play and you will get paid, simple as that.

Now I am paying more attention to the money supply reports that get released.

 

[Scientific Playa]

Engine of Wall Street profits sputters in first quarter
By Tom Braithwaite and Tracy Alloway in New York and Daniel Schäfer in London

©Bloomberg
Wall Street’s once lucrative fixed income divisions are set for their worst start to the year since before the financial crisis, with revenue declines of up to 25 per cent prompting banks to plan more redundancies on top of the tens of thousands of job cuts they have already made.

Citigroup and JPMorgan Chase have warned publicly that fixed income revenues – the engine of most investment banks’ profits since 2000 – will be down by double digits when they report first-quarter earnings next month. But other banks privately warn that their year-on-year declines could exceed 25 per cent after both institutional investors and banks shied away from trading. The first quarter is traditionally a high point for revenues.

“Effectively, the casino is empty this quarter,” said Brad Hintz, analyst at AllianceBernstein.

The top 10 banks are expected to make a combined $24.8bn of revenues in fixed income trading, which includes bonds, currencies and commodities, according to Morgan Stanley and Credit Suisse estimates, more than 40 per cent below the first quarter of 2009 when the market rebounded sharply from the crisis.

Two of the top five fixed income divisions told the Financial Times they expected to respond by cutting more jobs because the market is worse than expected, with traders blaming patchy macroeconomic data, interest rate uncertainty, regulation that limits risk taking and worries about the situation in Ukraine.

Analysts now expect Goldman Sachs to record its weakest first quarter since 2005 and JPMorgan Chase and Bank of America are forecast to see their lowest revenues since they bought Bear Stearns and Merrill Lynch, respectively, in 2008.

The weakness is expected to be even more severe among European banks such as Deutsche Bank and Credit Suisse, which are looking to meet new capital requirements by shrinking their balance sheets. “Anecdotally it seems Europeans are losing most share in the US itself and so are losing global diversification,” said Huw van Steenis, analyst at Morgan Stanley.

Some US banks hope their European rivals will cede market share. “Those outside of the top five will have to think about if they can continue to be in that business,” said James Chappell, analyst at Berenberg.

New regulations such as the Volcker rule – which prohibits proprietary trading – and tougher capital requirements restrict the risk banks can take and are sapping liquidity, bankers say, even though final versions of the rules have not proven as harsh as some feared.

Four years after the outlines of the post-crisis regulation were put into place, traders claim that outstanding areas of uncertainty are hitting activity among big bond traders such as JPMorgan, Citi, Deutsche Bank, Bank of America, Goldman and Barclays.

“There’s a significant amount of uncertainty about what the endgame is going to be,” said the head of trading at one bank. “We probably haven’t reached a peak of effort and management time. We’re not turning the page yet on regulation.”

Christian Bolu, analyst at Credit Suisse, estimated that US government bond trading volumes are down about 8 per cent so far this year compared with the same period in 2013. Trading of mortgage-backed securities backed by the US government is down 41 per cent, while corporate bond trading has increased by 12 per cent.

Additional reporting by Camilla Hall in New York