**OFFICIAL** Trading and Investing Thread: Part XVI -- BAG HOLDING EDITION

[RobParks2M]

seems like printer is back even more

fed is now pumping liquidity into banks

https://www.federalreserve.gov/newse...y20230319a.htm



you can see the price action in Bitcoin

up 45% in 10 days.

Honestly this is such a joke how far they are willing to unravel everything they’ve done to control inflation because of irresponsible public banks. Let them go under. Cover insured depositors. If federal government loses money attempting to convert assets to cash for depositors then they should garnish C-suite exec wages, bonuses, and any cash from selling shares to cover. If that isn’t enough then I think jail is appropriate. These morons think they can hold the average American hostage and currently they’ve been correct.

[Carbonfibre]

This will 100 percent blow up in their face again.

08 did and here we have another dumb decision by central banks.

2008 fed started buying mortgage backed securities / bonds (first time in history central banks started doing this)

2020 went next level central banks buying junk bonds / corporate debt.

what you think happens once you tell big banks you will always have their backs.

that means risk taking is always on.

anytime something breaks fed goes we got it.

carry on doing what you do.

[mulletwarrior]

seems like printer is back even more

fed is now pumping liquidity into banks

https://www.federalreserve.gov/newse...y20230319a.htm



you can see the price action in Bitcoin

up 45% in 10 days.

I am a total noob when it comes to the source of our funny money - fed and even IMF.

But just like last week's emergency facility, if I understand this correctly, this also feels like a QE dressed up to not be QE.

If I understand, basically this is just another mechanism to spread risk. The emergency facility lets banks take underperforming bonds off their balance sheet for cash at par, which is effectively an undercollateralized loan (unsecured to the point after collateralization). This swap lets participating countries just react more quickly with short term loans of FX - pushing out risk of bad FX or kicking it down the road at least.

All of that is to say, although technically this is not "money printers back on," it de-risks banks. In other words, it lets banks participate in risk upside without realizing risk downside. Which is just another greenlight for banks to risk up. Which is the same as giving them free money.

Will try and learn more about these overnight swaps when I have time.

EDIT: also re bitcoin, similar to bow yield curve inversion is a predictor for future recession, maybe bitcoin price will end up being a 12 month predictor for inflation

[Carbonfibre]

I am a total noob when it comes to the source of our funny money - fed and even IMF.

But just like last week's emergency facility, if I understand this correctly, this also feels like a QE dressed up to not be QE.

If I understand, basically this is just another mechanism to spread risk. The emergency facility lets banks take underperforming bonds off their balance sheet for cash at par, which is effectively an undercollateralized loan (unsecured to the point after collateralization). This swap lets participating countries just react more quickly with short term loans of FX - pushing out risk of bad FX or kicking it down the road at least.

All of that is to say, although technically this is not "money printers back on," it de-risks banks. In other words, it lets banks participate in risk upside without realizing risk downside. Which is just another greenlight for banks to risk up. Which is the same as giving them free money.

Will try and learn more about these overnight swaps when I have time.

So to add to your post.

The uptick in the fed balance sheet is not QE per say.

This program bank term funding is direct asset swap between banks and fed. This will not create new deposits. (exactly what you said here "The emergency facility lets banks take under performing bonds off their balance sheet for cash at par, which is effectively an undercollateralized loan (unsecured to the point after collateralization)"

In QE 2020 Fed was creating new deposits when they started buying bonds / corporate debt / mbs etc. This increased money supply and inflation went boom.



However will the stock market even care?

Stock market just needs liquidity they don't care about inflation.

As long there is liquidity backing in system market will pump.


To me this looks like sneaky QE because BTC should not be pumping 45% in week and 80% YTD.

You can see it on nasdaq up 26% vs sp 500 only 4%.


Hard not see how this by fall all blows up because a lot of these things have 08 vibes how they are injecting liquidity into banks here.

[Destor]

Would that be from the balance sheet or because people are taking a hard af hit off the hopium pipe and are convinced interest rates will be coming down?

[Carbonfibre]

Would that be from the balance sheet or because people are taking a hard af hit off the hopium pipe and are convinced interest rates will be coming down?

Seems like hopium pump.

Front running rate cuts one final pump on all risky stuff and its all down here in few months. This coming FOMC 25BPS is now lock.

However by June there is already 25bps rate cut coming. Dec 2023 its implying 3.5 % interest rate.

Month ago Fed speakers were saying we don't plan on doing rate cuts till 2024.

They thought getting to 550-575 and keeping it there for year would solve inflation.


However it seems market already broke.

The way stable things got killed metals / oil last week was hint things could be going for worse real soon.

[mulletwarrior]

^^ carbon surrrly that bitcoin pump isn’t the retail crowd. JFL the fed throws banks a lifeline and institutional investors use that lifeline and buy fukking bitcoin

Would that be from the balance sheet or because people are taking a hard af hit off the hopium pipe and are convinced interest rates will be coming down?

In theory the new swap program should result in lower short term rates, via less risk - I think.

So cheaper credit plus ability to convert bonds to cash = more liquidity and of course banks aren’t just adding cash to their balance sheet but are turning around and loaning it.

So instead of the fed creating cash out of thin air like with QE, they are just letting ppl exchange illiquid assets for cash assets. So market run probably driven by ppl trying to invest their new cash.

EDIT: to add that to the extent I understand the SDRs that the emergency facility is based on, that is kind of creating cash out if thin air because SDRs are these intra-gov abominations that no one knows what the fukk they are and the US gov basically takes some of its SDR credits and converts them to cash. So not necessarily creating cash out of thin air, but close to it.

[Bingo559]

for all you divvy chasers, i came across some fertilizer company paying 29%.

UAN

I don't know how to analyze companies but when i looked at yahoo's history, they have been paying dividends for awhile. I'm guessing the stock price wont go up much

[Destor]

Banks can only convert assets owned as of March 12th though right, and they pay pretty high interest rates on the collateralized BTFP loans @ the 1yr overnight index swap rate + 10 bps which is almost 5% as of the latest numbers

[Carbonfibre]

^^ carbon surrrly that bitcoin pump isn’t the retail crowd. JFL the fed throws banks a lifeline and institutional investors use that lifeline and buy fukking bitcoin

Majority of BTC is held by giant whales.

Once fed/treasury decided to bail out SIVB where huge amount of crypto startups used for banking that gave green light.

Institutions since 2020 have been offering their bigger clients crypto exposure, so absolutely this has zero to do with retail.

Retail cannot move BTC.

[mulletwarrior]

Banks can only convert assets owned as of March 12th though right, and they pay pretty high interest rates on the collateralized BTFP loans @ the 1yr overnight index swap rate + 10 bps which is almost 5% as of the latest numbers

Consider that, essentially, maybe only 70% of that loan is secured, the rest unsecured. Is that a low rate for an unsecured loan?

Majority of BTC is held by giant whales.

Once fed/treasury decided to bail out SIVB where huge amount of crypto startups used for banking that gave green light.

Institutions since 2020 have been offering their bigger clients crypto exposure, so absolutely this has zero to do with retail.

Retail cannot move BTC.

I guess time to go risk-on!

[Carbonfibre]

Consider that, essentially, maybe only 70% of that loan is secured, the rest unsecured. Is that a low rate for an unsecured loan?



I guess time to go risk-on!

We will find out in few days if Jerome kills market or gives market one final mistake pump from hell.

This is the most important FOMC since 2020.

[Destor]

Consider that, essentially, maybe only 70% of that loan is secured, the rest unsecured. Is that a low rate for an unsecured loan?

I guess time to go risk-on!

No clue, I just know it's not free money and ~5% seems like a high rate for a large institution and when we're talking billions of dollars

[mulletwarrior]

No clue, I just know it's not free money and ~5% seems like a high rate for a large institution and when we're talking billions of dollars

I'm sure that they will pay it back when and as due with no further need for bail outs

[RobParks2M]

AT1 bond holders somehow going down with the ship 100% even though shareholders are getting 25% of value of shares from friday. I don’t understand how this is remotely possible under any deal framework.

BRB buying AT1 bonds from CS for a penny on the dollar on the hope of a reversal

[Carbonfibre]

I hope you're joking around.

Would not be touching any of these toxic banks under any cost. Absolute suicide move.

Swiss government just came up with new law today where they sold CS without approval of shareholders in fire sale for virtually nothing like 65 cents per share.

CS shareholders just got fleeced.

This is unreal and unprecedented move.......imagine how bad those Credit Suisse books must be.

Also all those regional banks here at any point now.

Like FRC / WAL / CMA those are all phucked.

Only okay try on some throw away calls would be KRE etf cause you're not taking chance on one bank.

There is story this weekend that they were asking for Warren Buffet for help these regional banks....word is he said no.

[Destor]

Buffett should just keep buying Occidental

[RobParks2M]

I hope you're joking around.

Would not be touching any of these toxic banks under any cost. Absolute suicide move.

Swiss government just came up with new law today where they sold CS without approval of shareholders in fire sale for virtually nothing like 65 cents per share.

CS shareholders just got fleeced.

This is unreal and unprecedented move.......imagine how bad those Credit Suisse books must be.

Also all those regional banks here at any point now.

Like FRC / WAL / CMA those are all phucked.

Only okay try on some throw away calls would be KRE etf cause you're not taking chance on one bank.

There is story this weekend that they were asking for Warren Buffet for help these regional banks....word is he said no.

Buffet gonna give BAC the $$$ to do the dirty work for him.

Did they ever decide if bond holders get wrecked for SNBY/SVB? Did they go down with the ship too? Also, for that matter, did they ever decide what the deal would be for options gang???

@Carbon I’d only buy $100 CS bond for like $.01. Might be a good use of $100

[SipNPiz]

Lost track of how many times FRC has been halted today. Let’s say the fed keeps depositing, at what point does(should) the bank still exist if their only depositor is the FED?

[Carbonfibre]

Buffet gonna give BAC the $$$ to do the dirty work for him.

Did they ever decide if bond holders get wrecked for SNBY/SVB? Did they go down with the ship too? Also, for that matter, did they ever decide what the deal would be for options gang???

@Carbon I’d only buy $100 CS bond for like $.01. Might be a good use of $100

cs at1 bonds dead they staying at zero

was confirmed this morning

massive lawsuit coming lmao

https://www.investing.com/news/stock...ipeout-3034310

so many laws were broken here is unreal

what they did to CS shareholders is insane.



...........


about FRC

$70B bank run

yeah they phucked

vol insane

no matter how good it looks

you do not want repeat of SIVB by playing options with FRC

stay away from FRC

[dopamine72]

Anddddd

This is why I bag hold

I went green on a few big positions recently and here are my trimmings for the last few weeks:



Also trimmed half my XOM position @ 114 for an 80% gain, pretty much riding the rest in profits nearly....Got a stop loss order in at 99 so if that executes I still make a 50% ish gain


BOOM

Back in Business

Patience is not a virtue, its a fukING PAYOUT BABY!!!!

[RobParks2M]

cs at1 bonds dead they staying at zero

was confirmed this morning

massive lawsuit coming lmao

https://www.investing.com/news/stock...ipeout-3034310

so many laws were broken here is unreal

what they did to CS shareholders is insane.



...........


about FRC

$70B bank run

yeah they phucked

vol insane

no matter how good it looks

you do not want repeat of SIVB by playing options with FRC

stay away from FRC

Not on my computer but what do FRC bonds look like? Lmao.


I don’t remember- did bond holders for SNBY or SVB get 0’d out too??

Shouldda fukkin held NYCB but I’m happy not holding junky bank stocks.


Edit:

There is something probably fuking lurking under the surface. The fed, Jpm, and all the other banks are doing their dammedest to keep FRC going. Why is that?

Edit2: apparently CS AT1 bonds were junior to their stock. Very uncommon but that is how they were wrote.

[mulletwarrior]

Not on my computer but what do FRC bonds look like? Lmao.


I don’t remember- did bond holders for SNBY or SVB get 0’d out too??

Shouldda fukkin held NYCB but I’m happy not holding junky bank stocks.


Edit:

There is something probably fuking lurking under the surface. The fed, Jpm, and all the other banks are doing their dammedest to keep FRC going. Why is that?

Edit2: apparently CS AT1 bonds were junior to their stock. Very uncommon but that is how they were wrote.

Funny enough I asked myself that exact same question. Under a normal competitive environment, the JPMs would be circling the water maybe trying to force margin calls etc in an effort to get FRC to fold and pick up its assets for pennies on the dollar. Obviously there are broader contagion concerns here lol.

brb liquidating all accounts and buying bullets

[hardestgainer]

This market is full meme again and exactly why I cashed out everything besides my tradition and Roth, and just buy Puts every so often when it’s too obvious something has been pumped to oblivion.

These guys don’t give a fuk that they’re setting us up for another financial collapse

[Destor]

There's a lot of stuff whose valuations remain absolutely destroyed, but yeah I think the other shoe still needs to drop

Inflation in Canada is coming down ever so slightly quicker than anticipated

[dankydank]

Housing up 14% in a month because mortgage rates go down like 0.5% or less briefly.

[taf1968]

FRC looked like it was circling the drain yesterday.

Up 40% today. LOL.

[SipNPiz]

FRC looked like it was circling the drain yesterday.

Up 40% today. LOL.

It’s done this twice already, pretty cray

[Destor]

FRC looked like it was circling the drain yesterday.

Up 40% today. LOL.

I think that's still the drain down there lol, could be -40% again tomorrow

Doesn't take much to see a violent rally when something is down so severely

[RobParks2M]

FRC looked like it was circling the drain yesterday.

Up 40% today. LOL.

I’m sure all the dip buyers who bought $20+ are rejoicing LMAO

The reality right now is probably there is still a chance they fold… assuming they down their earnings are probably going to be trash for the rest of the year.