Thanks, Concoda. Until I started reading your stuff, I never realized how completely clueless I was about absolutely everything. Now at least I understand what a complete imbecile I am.
So for the stock market to dip, it needs a credit event, which reduces liquidity ?
What could cause such an event ?
In 2008 it was the market figuring out that the collateral (MBS) they were using for lending was not worth what they thought it was caused a credit freeze. What could be similar event in 2023/24 which could cause a credit/liquidity crisis? Is it that the cost of credit is more than what you can make yolo'ing in the market?
A great article that makes a lot of sense about the TQT with regards to longer dated treasuries. A very important observation about buying treasury duration risk that must be offset by selling other risk assets in the portfolio.
Thanks, Concoda. Until I started reading your stuff, I never realized how completely clueless I was about absolutely everything. Now at least I understand what a complete imbecile I am.
@Michael- an imbecile is someone who refuses to learn. So, my definition, that’s not you!
Well said.
and the best part is that we get to pay for the privilege of feeling dumb.
welcome to the party!
Will the great chop be like the yacht scene in Wolf of Wall St?
https://www.youtube.com/watch?v=u4ppoDl1K8w
this is the video of the month of Sept 2023 -- you see what I did there?
nodding in agreement
Hi concoda,
I have a dumb question, who is bidding up the equity market and where are they getting the liquidity to do so?
Is it the passive funds which are funded by 401k or pensions? Hedgefunds etc
Regards
everybody who wants to buy stocks will be able to access credit to do so
passive funds AND hedge funds AND many more entities
So for the stock market to dip, it needs a credit event, which reduces liquidity ?
What could cause such an event ?
In 2008 it was the market figuring out that the collateral (MBS) they were using for lending was not worth what they thought it was caused a credit freeze. What could be similar event in 2023/24 which could cause a credit/liquidity crisis? Is it that the cost of credit is more than what you can make yolo'ing in the market?
It could be a credit event originating in the realms of sovereign junk debt. Perhaps some evidence of it in Japan.
A great article that makes a lot of sense about the TQT with regards to longer dated treasuries. A very important observation about buying treasury duration risk that must be offset by selling other risk assets in the portfolio.
Concoda is demystifying the arcane craft of central banking policy and it's effect on global liquidity. Well done!
cheers
Thank you for the one month trial gifts!
Excellent. Really appreciate your work!
thank you!
Great article thanks so much!