Trader Vic – The Debt Problem With Raising Rates
Trader Vic Sperandeo joins me to outline a recent article he shared with his audience. It is focused on the massive amount of leverage in the global financial markets and the increase we will see in US debt thanks to the new budget.
Click download link to listen on this device: Download Show
This will solve nothing….Off TOPIC…….2nd Amendment
https://www.zerohedge.com/news/2018-02-23/gun-maker-stocks-slump-after-florida-imposes-age-restriction-gun-purchases-bans
Today, in its latest quarterly “hedge fund tracker” this time for Q4 Goldman doubled down (we will have more on the full report shortly), and made the same observation:
LEVERAGE: Hedge funds entered 2018 with near-record leverage and maintained risk despite the correction. Funds added nearly $20 billion of net exposure in two index ETFs alone (SPY and IWM) as ETF exposure rose to 3% of long portfolios. Although the S&P 500 suffered its first 10% decline in two years, funds maintained conviction in their positions. Portfolio turnover rose slightly but remained near recent record lows at 28%.
In fact, the consumer debt has exceeded their income for majority of the Americans.
Consumers have become accustomed using easy credit to maintain a lifestyle unaffordable for them otherwise. If this trend continues, and facts indicate that it will, we will be facing a monumental credit crisis in the near future.
This is not new to anyone here………….IMO
The Federal Reserve and other global lenders are a significant contribution to the problem. They allow printing of trillions of dollars and yens for the lenders to distribute to the borrowing consumers at a high interest, leading to a worldwide inflation. All this printed wealth is merely an illusion yet it is raising the cost of living. Prices are rising at an alamingly faster rate compared to the consumer income. There is no increase in real assets. All this is but a mere mushrooming of debt.
Real simple……….
jsmineset
Everything today is driven by computer algorithms and unless you are privy to their pre-programmed directives, you are at a disadvantage.
It’s not only the retail investor who is confronted with this dilemma, but the professional as well. (Simply note the number major hedge funds losing money, large amounts of money, for the first time in over 15 years. And this is in a bull market!
Well most of the computer algos still aren’t trading true Jr mining stocks so that is one area retail investors can get an edge.
The robo-trading is happening on the ETFs like GDX and GDXJ, but those are mostly Major and larger Mid-tier producers (the Kitco list) and not reflective of most of the much smaller micro-cap stocks discussed on here, that move to the beat of a different drummer.
Real estate bubble replay…….
https://wolfstreet.com/2018/01/30/us-cities-with-housing-bubbles/