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Re: Stock Market Crash! (merged) Pt. 12

Discussions about the economic and financial ramifications of PEAK OIL

Re: Stock Market Crash! (merged) Pt. 12

Unread postby Armageddon » Sat 21 Dec 2019, 08:42:52

UBS strategist Francois Trahan points out U.S. corporate debt has surged by 50% over the past decade and now stands near $10 trillion. "

Everything debt related is at all time highs. The bubble of all bubbles.
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby shortonoil » Sat 21 Dec 2019, 12:25:34

UBS strategist Francois Trahan points out U.S. corporate debt has surged by 50% over the past decade and now stands near $10 trillion. "

Everything debt related is at all time highs. The bubble of all bubbles.


The world's economic landscape is now littered with zombie companies; companies that do not have enough positive cash flow to service the interest cost on their debt. They are forced into refinancing their debt, and interest cost into an ever growing mountain of unserviceable obligations. When the Ponzi scheme finally fails it will avalanche into a tsunami of world embracing cascading defaults.

It is not exclusively a developed economy phenomena. It is also taking place throughout Asia, Africa, and South & Central America. Most of the world! We are nearing the end of the oil age, and the rate of economic decline is accelerating. The central banks are attempting to forestall the ignition of the smoldering economy by smothering it with highly enabling, and flammable currency.

Over the last two decades world debt has grown by 300%. The estimated 3.3% in 2019 world growth is less than a quarter of what has been injected as free cash into its economy. The rest disappeared down the bottomless well called insolvency. The world is now playing a game of burning musical chairs. The last player will have their chair burst into flames.

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Re: Stock Market Crash! (merged) Pt. 12

Unread postby onlooker » Sat 21 Dec 2019, 15:46:54

Exactly Short.
At $21 Trillion, The National Debt Is Growing 36% Faster Than The US Economy

https://www.zerohedge.com/news/2018-03- ... us-economy
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby rockdoc123 » Sat 21 Dec 2019, 16:02:25

The world's economic landscape is now littered with zombie companies; companies that do not have enough positive cash flow to service the interest cost on their debt.


perhaps you could provide us with a list of those companies? That is, of course, if you aren't just making it all up. :roll:
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby Outcast_Searcher » Sun 22 Dec 2019, 00:05:30

Armageddon wrote:UBS strategist Francois Trahan points out U.S. corporate debt has surged by 50% over the past decade and now stands near $10 trillion. "

Everything debt related is at all time highs. The bubble of all bubbles.

If debt was the only thing that changed you might have a point. You don't. You just cherry pick debt, endlessly. Get a grip. The global and US economy grows, and the numbers increase. It doesn't mean the end of the world, no matter how many times you wrongly claim it does.

Both global and US GDP at all time highs, up substantially over the past decade.

https://www.imf.org/external/datamapper ... C/WEOWORLD

US Stock market also at all time highs. S&P 500 up roughly 142.5% over past ten years. The index doesn't include the dividends, BTW.

https://www.macrotrends.net/2324/sp-500 ... chart-data


Total Assets, all US commercial banks at near $17.8 trillion, up over 51% over the past decade.

https://fred.stlouisfed.org/series/TLAACBW027SBOG


Total Assets, all manufacturing industry up over 66% from 3Q '09 to 3Q'19.

https://fred.stlouisfed.org/series/QFR223MFGUSNO
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby Yoshua » Sun 22 Dec 2019, 03:27:31

"The past decade of ultra-low interest rates has spawned the rise of "zombie" companies.

These debt-laden firms don't make enough to even cover their interest payments. That's never a good sign.

The number of zombie companies in advanced economies last year stood at 536, or 13% of the total, according to Bank of America Merrill Lynch." CNN
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby marmico » Sun 22 Dec 2019, 07:07:01

If debt was the only thing that changed you might have a point. You don't.


The value of US produced assets (capital stock) of structures, equipment and intellectual property now exceeds $60 trillion. Add land and consumer durables values, the US capital stock is probably nearing $100 trillion.

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https://apps.bea.gov/iTable/iTable.cfm? ... c&1903=178
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby evilgenius » Sun 22 Dec 2019, 07:51:45

AirlinePilot wrote:Historically the trajectory we are on here in the US does not play out "well". What the endgame looks like is anyone's guess, but the current paradigm cannot continue indefinitely. Its possible the charades can go on for quite some time, but there will come a point when the markets will react to the Federal budget completely breaking down. We ARE headed there unless some serious and hard legislation is enacted to curb spending and get a grip on the exponential growth of Medicare. So far it appears we will do nothing unless its politically expedient. Our system is classically broken along the lines of the final years of the Roman Empire. Enjoy it while it lasts.

In other words, it's only a matter of time before Trump does domestically, to you, what he is doing internationally, to the Chinese.
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby evilgenius » Sun 22 Dec 2019, 08:03:03

Yoshua wrote:"The past decade of ultra-low interest rates has spawned the rise of "zombie" companies.

These debt-laden firms don't make enough to even cover their interest payments. That's never a good sign.

The number of zombie companies in advanced economies last year stood at 536, or 13% of the total, according to Bank of America Merrill Lynch." CNN

I don't think things are as out of balance as they were when Greenspan refused to raise rates, so that he could get Bush back in for a second term. Too little, too late on that one. Housing was allowed to get well out of hand, such that too many couldn't pay back their loans.

J Powell has been nothing but played off poorly by Trump. Trump is a notorious bankrupt. Still, he feels confident to offer advice to Powell. When he can, he tries to pile it on by recruiting as many of those whom Powell does need to listen to as well. The people have to believe that the Fed has the thing in hand. Shake things up too much and a simple correction could come off as the end of the world, when you let that sort of pressure come from a branch of government the Fed is supposed to be independent of.
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby shortonoil » Sun 22 Dec 2019, 11:20:34

Yoshua wrote:
"The past decade of ultra-low interest rates has spawned the rise of "zombie" companies.

These debt-laden firms don't make enough to even cover their interest payments. That's never a good sign.

The number of zombie companies in advanced economies last year stood at 536, or 13% of the total, according to Bank of America Merrill Lynch." CNN


This coming year the world will pile $48 trillion in additional debt on top of the mountain it already has. The number of zombie companies will grow. The world's economy has no choice but to keep stacking up the debt until they have all become zombies. The present debt can not be paid off, ever! It can only be rolled over into a bigger pile. The zombies must even roll over their interest cost into new debt which turns a linear growth rate into an exponential one. Looking at world GDP growth vs Debt growth figures, we are already at the threshold of a totally zombie economy.

There are a number of metrics that can be used to estimate when this will all stop working.

1)GDP growth vs. Debt growth. It is now taking an ever increasing amount of debt to produce an increase in GDP, and that is growing exponentially.

2) Currency in circulation vs. debt growth. Debt creation destroys the currency in circulation, just like paying off a loan destroys the currency that was used to provide the loan. When existing debt is refinanced it destroys an equal amount of the currency in circulation. When the debt growth reaches a specific level it will destroy all of the currency in circulation. The central banks printing extravaganza is their attempt to replace the liquidity that is constantly being destroyed.

3) And, of course the energy equations. The correlation between debt growth, and petroleum depletion has been almost perfect since day one. They have grown in perfect sync, and will end the same way. For a totally dependent petroleum driven economy that is certainly not surprising.

4) There are many more examples available

Like the debt that can never be repaid, the debt based monetary system can never be brought into balance. The debt is an ever growing counterweight that must be propped up to keep the system functioning. The system will oscillate back and forth until it tips over and crashes. Like all debt based paper currencies throughout history this one will revert to its intrinsic value of zero. Expect an ever growing number of monetary crises that will not stop coming until the present system has ended.
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby Armageddon » Sun 22 Dec 2019, 11:56:26

My 3 2020 predictions

1) we’ll see interest rates drop to 0%
2) we’ll see GDP hit zero
3) we’ll see DOW 30k


Come at me bro
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby shortonoil » Sun 22 Dec 2019, 13:41:47

My 3 2020 predictions

1) we’ll see interest rates drop to 0%
2) we’ll see GDP hit zero
3) we’ll see DOW 30k


"Official" verification can be expected to be a little slow! Watch for currency shortages; that will be the real canary in the mine. Roll over rates in the junk bond market will get critical, and foreign investors into Treasuries will get rare as they run out of dollars. The central banks will be at QE infinity as the debt growth destroys the money in circulation at a faster, and faster pace. They are pushing on a string, and the string is getting shorter, and shorter.
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby Armageddon » Sun 22 Dec 2019, 23:10:54

"I Find It Very Troubling" - Most Americans Lack Savings

The economy might be strong in the U.S., but, as Statista's Maria Vultaggio details below, nearly 70 percent of Americans have less than $1,000 stashed away, according to GOBankingRates’ 2019 savings survey.

“It’s puzzling to me that if the economy is doing so well and that we’re so close to full employment, that consumer confidence is up … that we haven’t seen the numbers move much in people’s ability to save,” McClary told Yahoo Finance.

“I find it very troubling that people can’t come up with $1,000 in a savings account to cover expenses without borrowing money.”


https://www.zerohedge.com/personal-fina ... ck-savings
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby careinke » Mon 23 Dec 2019, 04:51:35

Armageddon wrote:"I Find It Very Troubling" - Most Americans Lack Savings

The economy might be strong in the U.S., but, as Statista's Maria Vultaggio details below, nearly 70 percent of Americans have less than $1,000 stashed away, according to GOBankingRates’ 2019 savings survey.

“It’s puzzling to me that if the economy is doing so well and that we’re so close to full employment, that consumer confidence is up … that we haven’t seen the numbers move much in people’s ability to save,” McClary told Yahoo Finance.

“I find it very troubling that people can’t come up with $1,000 in a savings account to cover expenses without borrowing money.”


https://www.zerohedge.com/personal-fina ... ck-savings


Well 50% of the people have no stocks, and the top 20% own 93% of the stock market. The people on welfare generally make the correct economic decisions. They are basically trapped in the welfare system. If you are getting $2,000/mo is public assistance and find a job that pays $3,000 per month but you lose all assistance, and maybe you have kids, so you need to hire childcare, so you can work. What decision would you make. The way things operate now, is basically the new Democratic Plantation, only the slaves are free range.

This is one of the arguments for Yangs Freedom Dividend. As Red as Alaska is, they all like their payment from oil company profits.
Why not use some of Amazons profits (that they paid NO taxes on), or Googles profits from selling your data, to just give every adult US citizen $1,000/month with zero strings attached. If your landlord tries to raise your rent by $1,000/mo, I bet with you and your partners 1,000 plus what you are currently paying in rent, you could probably buy your own place.
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby Cog » Mon 23 Dec 2019, 05:47:33

From as far back as my 63 years take me, a lot of people didn't have an extra $1000 laying around for emergencies. I certainly didn't when I was young. Nothing new here.

I heard this same deal during the 2007 recession and some people save and some people dont. Sucks to be them. LOL
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby godq3 » Mon 23 Dec 2019, 05:58:12

shortonoil wrote:2) Currency in circulation vs. debt growth. Debt creation destroys the currency in circulation, just like paying off a loan destroys the currency that was used to provide the loan. When existing debt is refinanced it destroys an equal amount of the currency in circulation. When the debt growth reaches a specific level it will destroy all of the currency in circulation. The central banks printing extravaganza is their attempt to replace the liquidity that is constantly being destroyed.

Zero Hedge wrote:Last week we reported that something strange was going on at the same time that central banks are injecting $100 billion each month in electronic money to crush volatility and ramp markets: a similar amount in physical currency and precious metals was literally disappearing.

https://www.zerohedge.com/markets/steve ... isappeared
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby Cog » Mon 23 Dec 2019, 06:11:32

This is one of the strangest stock market crashes I've ever experienced. Usually I lose money in stock market "crashes" but I've made money in the market ever since this thread was created 11 parts ago. LOL
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby shortonoil » Mon 23 Dec 2019, 10:42:29

Repo Crisis Fades Away With Second "Undersubscribed" Turn Repo Even As Pozsar Doubles Down On Doomsday

It looks like the year-end repocalypse that was predicted by Credit Suisse strategist Zoltan Pozsar is not going to happen this year after all.


This means that today's repo is either good news, or bad news: good news if banks don't need any additional liquidity for year end, but bad news if they are simply prevented from seeking more Fed reserves due to balance sheet limitations (and how many securities they can pledge), even as the overall funding in the repo market remains insufficient.

https://www.zerohedge.com/markets/repo- ... n-doomsday

Are the banks running out of assets to pledge? With $48 trillion in new world debt coming on line, and the turn on the old debt during 2020, if they aren't short of assets now they will be shortly.

QE Infinity + 1 is not likely to work as well as some of the earlier versions.
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby Armageddon » Mon 23 Dec 2019, 11:47:16

U.S. durable-goods orders sink in November; decline is sharpest in six months
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Re: Stock Market Crash! (merged) Pt. 12

Unread postby Armageddon » Mon 23 Dec 2019, 11:49:38

US New Home Sales Disappoint As Median Price Soars
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