Discussion ***Official*** 2023 Stock Market Thread 💰

[dullard]

Is WeBroke a victim of circumstances, bad timing or poor management? Seemed like a good idea to make spaces available where people are rather than making them commute.

I'm a little PoDunk town with some vacant retail space that could have been converted for people to get a desk and a computer.

I never understood the need for WeWork to be so involved. If it is a good idea to make spaces available, then do it. There is absolutely no need for WeWork since that problem can solve itself. Any building with available space should consider making it into rentable office space if it is profitable to do so. The idea is certainly not anything worth $47 billion just to tell building owners that they can rent out space.

On the flip-side, WeWork entered many areas where it is not profitable to do so. WeWork leased massive amounts of unneeded and unused office space, locking them into contracts for years. This included many areas where there was little to no demand for rentable office space, and was especially bad in a pandemic where it was better to have a home office. Instead, WeWork should have been more of a franchisee model where they provide the know-how and equipment as needed for the buildings where it does make sense to turn into rentable office spaces.

With just a small fee to your PoDunk town's building owners, as a franchise model WeWork could have given them marketing, connections, the right office equipment, etc. All without WeWork ever entering long-term leases in your PoDunk town for the very few people who could use temporary office space there.

 

[FelixDeCat]

How about that stock market!

 

[AdamK47]

Just wish I bought more two weeks ago.

Never know, could get that recession the bears are always going on about.

 

[dullard]

How about that oil price!

 

[jpiniero]

Just wish I bought more two weeks ago.

Never know, could get that recession the bears are always going on about.

If anything, a recession would be great for stocks.

 

[FelixDeCat]

Bought Afirm prior to earnings. So far, so good.

Also ARM is getting clobbered. Thankfully missed that one.

 

[FelixDeCat]

Buy the dip on WeWork?

Looks like some profited from the bankruptcy trade:



I had thought about shorting WeWork when the stock fell to $1.50, but the cost to borrow was 325%. Even for a trade it was way too rich for my blood. Looking back however, I could have shorted at $1.50, covered below $1 the next day, and paid about 1-2% in interest. Oh well.

The speculators are speculating that with all the terminated leases WE might survive in some way. Will there be any equity left is the question. Im thinking this company never had any value to begin with as the concept can be duplicated by any office building, it just wont have the WeWork branding / name recognition and platform.

The office building I work in has 9 floors, and I work on the 9th. Part of the 1st floor has had a problem with long term tenants. They could implement an open office concept on that floor. The property is two adjacent 9 story office buildings with an underground walkway, cafe and Amazon lockers and Im guessing about 2500 parking spaces.

 

[biostud]

Just wish I bought more two weeks ago.

Never know, could get that recession the bears are always going on about.

Don't worry in two weeks you will have another chance, if the last couple of months are any indicator of what is going to happen

 

[AdamK47]

Looks like some profited from the bankruptcy trade:

View attachment 88594

I had thought about shorting WeWork when the stock fell to $1.50, but the cost to borrow was 325%. Even for a trade it was way too rich for my blood. Looking back however, I could have shorted at $1.50, covered below $1 the next day, and paid about 1-2% in interest. Oh well.

The speculators are speculating that with all the terminated leases WE might survive in some way. Will there be any equity left is the question. Im thinking this company never had any value to begin with as the concept can be duplicated by any office building, it just wont have the WeWork branding / name recognition and platform.

The office building I work in has 9 floors, and I work on the 9th. Part of the 1st floor has had a problem with long term tenants. They could implement an open office concept on that floor. The property is two adjacent 9 story office buildings with an underground walkway, cafe and Amazon lockers and Im guessing about 2500 parking spaces.

There is value in WeWork. It will be pulled apart during the bankruptcy. The viable parts will live on in the WeWork that is to come.
The rise and fall of WeWork: https://www.businessinsider.com/weworks-nightmare-ipo

 

[FelixDeCat]

There is value in WeWork. It will be pulled apart during the bankruptcy. The viable parts will live on in the WeWork that is to come.
The rise and fall of WeWork: https://www.businessinsider.com/weworks-nightmare-ipo

Yes, but will any existing equity survive in the current shares. My guess is no, so Im not buying.

 

[Charmonium]

Take the fed at its word. There won't be any cuts any time soon. KPMG estimates June-July at the earliest.

One thing I did learn is that so far, they've hoovered up about $1T by selling assets (to take money out of circulation).
But don't worry. There's plenty more where that came from. See link. But remember that those assets are almost exclusively debt instruments. So just holding them to maturity isn't unlike selling. I think incoming money from sales just disappears from the money supply. I mean, it has to get some sort of journal entry, but for all intents and purposes, that money ceases to exist.

Assets: Total Assets: Total Assets (Less Eliminations from Consolidation): Wednesday Level

View the total value of the assets of all Federal Reserve Banks as reported in the weekly balance sheet.

fred.stlouisfed.org

 

[jpiniero]

Take the fed at its word. There won't be any cuts any time soon. KPMG estimates June-July at the earliest.

I agree but they only have so much time. Just the treasury interest alone is going to be more than a $T/year.

US Debt Interest Bill Rockets Past a Cool $1 Trillion a Year

US Treasuries may face renewed selling pressure into the new year if one measure of the nation’s swelling debt repayment bill is any guide.

www.bloomberg.com

 

[AdamK47]

Yes, but will any existing equity survive in the current shares. My guess is no, so Im not buying.

There will be no equity in current shares.

Whatever comes from it will be new/separate or bought up by another company.

 

[Lost_in_the_HTTP]

WHY is the US treasury using a Chinese bank .... at all?



U.S. News // 4 hours ago
Ransomware attack on Chinese bank ICBC disrupts U.S. Treasury trades
Nov. 10 (UPI) -- A ransomware attack against the U.S. financial services division of the Chinese Bank ICBC disrupted U.S. Treasury trades, but in a Thursday statement ICBC said the trades were successfully executed.

 

[FelixDeCat]

WHY is the US treasury using a Chinese bank .... at all?

U.S. News // 4 hours ago
Ransomware attack on Chinese bank ICBC disrupts U.S. Treasury trades
Nov. 10 (UPI) -- A ransomware attack against the U.S. financial services division of the Chinese Bank ICBC disrupted U.S. Treasury trades, but in a Thursday statement ICBC said the trades were successfully executed.

To be able to sell our debt to Chinese like we've done for a bazillion years.

According to CNBC the last gov bond auction was the worst ever. Lots of debt and not many takers. They want more yield especially with a gov shutdown waiting in the wings.

 

[jpiniero]

The shutdown shouldn't affect the Treasury. That being said, the Treasury just did a 30 year with an interest rate of 4.75% and it still sold at a discount.

 

[FelixDeCat]

The shutdown shouldn't affect the Treasury. That being said, the Treasury just did a 30 year with an interest rate of 4.75% and it still sold at a discount.

According to the discussion on CNBC it only completed because market makers had to intervene. It was considered the first failed auction since the 1970s.

 

[Charmonium]

According to the discussion on CNBC it only completed because market makers had to intervene. It was considered the first failed auction since the 1970s.

And if you look at the chart I linked to above, you'll see that about $3T was due to Trump's klepto tax cuts.

 

[jpiniero]

According to the discussion on CNBC it only completed because market makers had to intervene. It was considered the first failed auction since the 1970s.

Can't blame em, since that goes so far out that I think there's a real risk that the buyers won't get their principal back. It might be time for the Treasury to scale back 20 and 30 year.

I am not surprised that this caused a stock market rally.

 

[Charmonium]

Well, at least the yield curve is flattening out. So much for an inverted one predicting recession.

 

[Lost_in_the_HTTP]

Santa Claus Rally?

 

[dullard]

Santa Claus Rally?

I'll go with a highly qualified yes. I think we are due for a Santa Claus rally this year simply because the stock market has priced in a non-existent recession for the last 2 years. However, that rally is heavily contingent on two things. (1) Oil prices lock in their 18% recent drops and don't go back above $80/barrel. If oil stays lowered, then it drastically increases the chances of finally breaking under the 3% inflation rate--although that probably won't show up until the January report so I realize it could be a bit too late for the Santa Claus rally. (2) Congress gets its act together and actually passes a appropriations bill that lasts longer than January.

#1 is likely, #2 is a toss-up.

 

[jpiniero]

The rally is because of a belief that the Fed won't raise further and they might even have to cut soon because the US can't afford high rates for much longer.

A shutdown would be good for stocks actually.

 

[AdamK47]

I have a feeling we'll see down days on November 17th and the 20th.

Starting already with Moody's rating.

Those clowns in Washington will of course go to the last minute again. Holding the US economy hostage.

 

[dullard]

The rally is because of a belief that the Fed won't raise further and they might even have to cut soon because the US can't afford high rates for much longer.

A shutdown would be good for stocks actually.

The last shutdown was good for stocks; they gained ~10%. But that was the only shutdown with large gains. The average return during shutdowns is a measly 0.04%: https://www.cnn.com/2023/09/28/investing/premarket-stocks-trading-government-shutdown/index.html

As for your first statement, US debt affordability and fed rate settings are two separate topics. Affordability for the US government to pay interest is not part of the feds mandate nor part of its decision making process.