***Official*** 2016 Stock Market Thread

[Imp]

So Suncor finally bought Canadian Oil Sands -- SU and COS.

SU is down more than 5% right now. So, after all the tough talk from COS, they finally agree to be bought out.

IIRC, COS has a break-even price of $40 or $50 a barrel. I think they sell for around WTI because they upgrade their shit, but that adds to cost.

 

[JEDI]

Be careful what you wish for. Most investors today have never experienced a real secular bear market. The last secular bear was 1966-1982. During that period, the Dow Jones Industrial average went from 1000 in 1966 to..... 1000 in 1982. A big fat zero for 16 years. Adjusted for inflation, this was a massive loss for anyone invested in stocks. Stocks didnt make money. Bonds didnt make money. Mutual funds didnt make money. And the period 1966-1982 was not an aberration. There was a similar period from 1929 to 1945. 2016-2032 could very easily be similar. If this happens, then 80% of 401Ks will be worth less in 2032 than they are now (in 2032 dollars), including the money they add during that time.

the US could turn into japan.
their Nikkei has been horrible for the past ~30yrs

 

[dullard]

the US could turn into japan.
their Nikkei has been horrible for the past ~30yrs

Japan is the result of wealth accumulation gone wild + politicians that don't understand simple economic concepts.

In general, wealth accumulation can be a very good thing. It encourages hard / efficient work, because that may lead you to a better life than someone who works less hard or less efficiently. But, when taken too far, there are serious consequences.

In Japan's case, wealth has accumulated in the elderly, and for Japan the elderly are quite old. That means a typical 90 year old has a big pile of wealth there. I don't know much about the elderly Japanese myself, but having been in Japan a few times, the products on the shelf certainly do not appear to be geared towards the elderly. They seem to be geared towards the young who in Japan are quite indebted and often have no way to get a good income.

That means, the Japanese wealth is stagnant. Eventually, they die and the next round of 70-year olds inherit the wealth. Again, to another person who isn't typically a big spender.

What Japan needs more than anything is to encourage the spending of that wealth to get their economy back on track. So what does Abe do? Massive tax on spending. Sorry, but taxing spending is NOT how you encourage spending. He hoped to encourage spending by threatening even higher sales taxes in the future. Instead, Abe needs to do the opposite: threaten to tax stagnant wealth while cutting sales taxes. THAT will finally get Japan back on track.

Will the US reach that point? Maybe. Inequality here is building and building. But we are far from the Japan's place of zombie businesses and little spending.

 

[Imp]

That means, the Japanese wealth is stagnant. Eventually, they die and the next round of 70-year olds inherit the wealth. Again, to another person who isn't typically a big spender.

What Japan needs more than anything is to encourage the spending of that wealth to get their economy back on track. So what does Abe do? Massive tax on spending. Sorry, but taxing spending is NOT how you encourage spending. He hoped to encourage spending by threatening even higher sales taxes in the future. Instead, Abe needs to do the opposite: threaten to tax stagnant wealth while cutting sales taxes. THAT will finally get Japan back on track.

Will the US reach that point? Maybe. Inequality here is building and building. But we are far from the Japan's place of zombie businesses and little spending.

The part about taxing stagnant wealth seems to make sense. I'm ambivalent about lowering sales taxes.

Overall, it sounds like they have a cultural "problem": old people are not buying tons of useless shit. Lowering sales taxes might encourage spending, but if people are happy to make do with little, that'll be a problem.

On another note, I found Robert Shiller's SP500 spreadsheet on his website. Had some fun calculating average returns. Looking at historical dividend yields is enraging given what it is now.

 

[11thHour]

Feb oil is $29.01 now.

 

[manlymatt83]

Just curious, markets going to open lower again tomorrow?

 

[Imp]

Something something, China's GDP at 25 year low. Not seeing it do anything to the Shanghai index yet.

 

[Tequila]

Feb oil is $29.01 now.

This is oil

 

[OverVolt]

the US could turn into japan.
their Nikkei has been horrible for the past ~30yrs

And they are on QE8. Hopefully we dont turn Japanese. Luckily demographics & immigration are huge benefits.

 

[OverVolt]

The part about taxing stagnant wealth seems to make sense. I'm ambivalent about lowering sales taxes.

Overall, it sounds like they have a cultural "problem": old people are not buying tons of useless shit. Lowering sales taxes might encourage spending, but if people are happy to make do with little, that'll be a problem.

On another note, I found Robert Shiller's SP500 spreadsheet on his website. Had some fun calculating average returns. Looking at historical dividend yields is enraging given what it is now.

The whole economy there is stagnant. I really don't envy any 20-30 year old living in Japan. Its so ironic that they so desperately need labor to the extent that the old japanese are trying to invent robots to care for them in old age meanwhile so many young Japanese are misplaced from the workforce they have special words for it.

Eerily similar effects from QE here in the US in terms of locking out the younger generations.

 

[Imp]

The whole economy there is stagnant. I really don't envy any 20-30 year old living in Japan. Its so ironic that they so desperately need labor to the extent that the old japanese are trying to invent robots to care for them in old age meanwhile so many young Japanese are misplaced from the workforce they have special words for it.

Eerily similar effects from QE here in the US in terms of locking out the younger generations.

That's what Chinese workers are for...

And China's GDP at 25 year low, so let's have a 3% market rally.

 

[s0me0nesmind1]

The whole economy there is stagnant. I really don't envy any 20-30 year old living in Japan. Its so ironic that they so desperately need labor to the extent that the old japanese are trying to invent robots to care for them in old age meanwhile so many young Japanese are misplaced from the workforce they have special words for it.

Eerily similar effects from QE here in the US in terms of locking out the younger generations.

Were in the same boat here in the states. The only people pumping out kids are the lower class. Want some edumacated kids to make the next big innovations from reasonable parents? Nope! We need more cheap labor pumped out for taking orders at drive-thru's.

Successful people keep putting off kids as they tend to other priorities first, Social security is a pyramid scheme that relied on baby-boomer-esque pumping out of kids to pay for... etc..

 

[dullard]

Were in the same boat here in the states. The only people pumping out kids are the lower class. Want some edumacated kids to make the next big innovations from reasonable parents? Nope! We need more cheap labor pumped out for taking orders at drive-thru's.

Successful people keep putting off kids as they tend to other priorities first, Social security is a pyramid scheme that relied on baby-boomer-esque pumping out of kids to pay for... etc..

The movie Idiocracy isn't realistic. Luckily intelligence and skill sets aren't inherited (meaning a newborn baby from a lower class is the same as a newborn baby from the upper class). Then, we only have to deal with poor parenting and lack of opportunities that often tags along with the lower class.

 

[FelixDeCat]

Well I was upside down on my $100,000 QQQ short, so I shorted the $101 calls against my $100 call. Doing so got the premium I paid on Friday for the $100 calls. Now I had the room to cover the QQQ short at $101.90.

Current position is a long $100/ short $101 call spread.

Not bad considering I was looking at a big haircut this morning and the margin desk put a 10AM deadline to settle the upside down position.

 

[Attic]

Japan is the result of wealth accumulation gone wild + politicians that don't understand simple economic concepts.

In general, wealth accumulation can be a very good thing. It encourages hard / efficient work, because that may lead you to a better life than someone who works less hard or less efficiently. But, when taken too far, there are serious consequences.

In Japan's case, wealth has accumulated in the elderly, and for Japan the elderly are quite old. That means a typical 90 year old has a big pile of wealth there. I don't know much about the elderly Japanese myself, but having been in Japan a few times, the products on the shelf certainly do not appear to be geared towards the elderly. They seem to be geared towards the young who in Japan are quite indebted and often have no way to get a good income.

That means, the Japanese wealth is stagnant. Eventually, they die and the next round of 70-year olds inherit the wealth. Again, to another person who isn't typically a big spender.

What Japan needs more than anything is to encourage the spending of that wealth to get their economy back on track. So what does Abe do? Massive tax on spending. Sorry, but taxing spending is NOT how you encourage spending. He hoped to encourage spending by threatening even higher sales taxes in the future. Instead, Abe needs to do the opposite: threaten to tax stagnant wealth while cutting sales taxes. THAT will finally get Japan back on track.

Will the US reach that point? Maybe. Inequality here is building and building. But we are far from the Japan's place of zombie businesses and little spending.

We shouldn't be encouraging you or anyone else to come up with ways to manipulate folks behavior. Your wisdom or some politicians pales in comparison to a sea of individuals operating on their own.

What we need here and what Japan needs is more individual freedom, and opportunity and equality. As always, government needs to do less, but do what it does much better.

As government infiltrates individuals lives with manipulative policy, their is a massive inefficiency introduced into the sea of individuals who collectively create a wise and efficient market.

This is not rocket science.

 

[dullard]

We shouldn't be encouraging you or anyone else to come up with ways to manipulate folks behavior. Your wisdom or some politicians pales in comparison to a sea of individuals operating on their own.

What we need here and what Japan needs is more individual freedom, and opportunity and equality. As always, government needs to do less, but do what it does much better.

As government infiltrates individuals lives with manipulative policy, their is a massive inefficiency introduced into the sea of individuals who collectively create a wise and efficient market.

1) It is only wise and efficient to a certain extent. What happens when Bill Gates, Warren Buffet, the Koch brothers, or a similar type of person has every penny in the world? Every sea of individuals that have ever been in existence trended towards that type of outcome until something major broke (collapse of a civilization, revolt, revolution, etc.) This is because the rules of contracts and rules of law are NEVER neutral to both parties. Our laws are written by and/or for the wealthy and thus they always have the upper hand in any deal.

2) Show me a location with little to no governance and I'll show you chaos. All places that most people want to live have some sort of government. That means some sort of manipulation. I support manipulation that tends towards a long term prosperity. From your post, I suspect that you want a society where you pretend that manipulation doesn't exist--which will just heighten item #1 since those who realize that there always is manipulation will eat you alive.

 

[Imp]

1) It is only wise and efficient to a certain extent. What happens when Bill Gates, Warren Buffet, the Koch brothers, or a similar type of person has every penny in the world? Every sea of individuals that have ever been in existence trended towards that type of outcome until something major broke (collapse of a civilization, revolt, revolution, etc.) This is because the rules of contracts and rules of law are NEVER neutral to both parties. Our laws are written by and/or for the wealthy and thus they always have the upper hand in any deal.

It'll trickle down, yo. We'll all become gardeners, pool boys, and maids.


On another note. lolololol

Canada 3rd quarter 2015 debt to income hit 1.71. We're not in trouble with a big chunk of the economy based on trading each other property.

http://business.financialpost.com/n...-crunch-on-brink-of-historic-levels-pbo-warns

 

[Charmonium]

Something I just heard about today is the fact that the fed has been reducing its balance sheet and draining liquidity in the process. This could be affecting the markets. I think the reason is that since there is less free cash floating around in the system, there is less cash available for trading. You also have thinly traded securities like debt instruments being sold by a lot of people who are trying to get out of those securities at a time when there is less cash available. At least that's how I interpret what's happening.

Here's fed chart showing the reduction in excess reserves and the increase in reverse repos (money given to the fed temporarily in exchange for loaned treasuries - see article above).

 

[Imp]

POT closed a potash mine. Sucks for the people losing their jobs but sign of the times. Trailing dividend yield is almost 10% for POT, it's supposedly safe, but I doubt it. Waiting for the inevitable cut that should hit the stock. Then I may seriously consider buying.

http://www.cbc.ca/news/canada/new-brunswick/potash-mine-sussex-reaction-1.3410316

 

[FelixDeCat]

Sold the $100 calls and replaced with $102.5 calls. Now long 102.5 calls / short 101, a net credit spread of $1500.

 

[FelixDeCat]

Also....I think we may see $80 in the QQQs by May. If not, still in the neighborhood of 95-105. I would be *shocked* to see $115 QQQ again this year.

 

[Imp]

Pre-market for U.S., but WTI is down to mid-$27.

 

[s0me0nesmind1]

pre-markets are already down 1.5% across the board, Wednesday is going to be interesting... I knew this bloodbath wasn't over.

 

[FelixDeCat]

pre-markets are already down 1.5% across the board, Wednesday is going to be interesting... I knew this bloodbath wasn't over.

I was tempted to buy puts but declined. Greed always leads to loss - for me, at least. Who knows what happens tomorrow. We could wind up with a rally by the end of the day.

 

[Imp]

Bank of Canada may cut interest rate today. Fingers crossed they do because the CAD is currently about US$ 0.681. Take it down to 0.25% and it's clear to US$ 0.65 or lower.

...This is the longest play ever because I am betting on it going down and eventually going back up to actually make money.