Prices coming down?

[Yihang]

I think another person said in the oceanvolt thread nothing is free. You pay for it one way or another. Handouts never end well. One has to wonder if this much money would have been given out if it wasn't an election year. I also wonder how much of it didnt just end up in peoples robinhood accounts, it was never enough to really get anyone through it anyway. Maybe that explains why the stock market is going up and up, people are just moving back home and using the money for speculating the market.

[daletournier]

Originally Posted by Lake-Effect

Fair enough, but look what they're calling junk: Uber, Clear Channel, Caesars Resort Collection, MGM Resorts, and Ford. Big companies whose ratings have been downgraded, and who might reasonably be expected to improve.


I expect that you are too, and as you've sagely observed about Fiji, "it has to" work towards reopening and tourism. No plan B for them, other than outside aid.

I too have hopes that some economic reform can be slipped into this recovery.

You can stop right there "whose ratings have been downgraded "....

Junk is junk and is called so for a reason. Btw this also ties in with the misallocation of funds due to cheap , nearly zero credit.

Excess corporate debt is a very serious problem, and now a bigger problem due to the demand problems in play due to covid, theres talk of a 10 trillion dollar corporate debt bomb.

https://www.cnbc.com/2020/08/10/moha...ket-rally.html

[h20man]

Originally Posted by Tenedos

In the meantime

L.A. rent is falling, with some big drops in luxury buildings (https://www.latimes.com/homeless-hou...lling-high-end)

Now would one expect a correlation between rents in luxury buildings and boat prices

I do not know if I would expect a correlation...


Boats are bought... rentals... not...
Luxury real estate is being bought...



I has seen people with spare cash, that they were going to use for business expansion or... are now looking to get an asset that they may want to use....

[h20man]

Originally Posted by daletournier

It has to! I'm in Fiji, all the shops at Port Denarau marina are closed, at this time of year they would normally be thriving, how dies a country like Fiji survive economically without tourists?

Its mind blowing to me. I doubt we will get a 100% successful vaccine based on history BUT I really hope we do and soon.

The idea of closing all borders has merit... If incoming people are only hours away from other virus infested areas....


But... on a boat that is traveling on the ocean for 14 days or more... (Essentially self isolating) then... you have people that have quarantined themselves.



Even if not 14 days.. then.. wait out the rest on the hook... Like what the original 'yellow flag' was for.


Pleasure Boat tourists are the BEST for areas... the restrictions should be taking this into account.. and when people start to think.. it probably shall...

[Lake-Effect]

Originally Posted by daletournier

You can stop right there "whose ratings have been downgraded "....

Junk is junk and is called so for a reason.

"Junk" is a technical designation, and there are are several different ratings and risk levels, as you know.

Btw this also ties in with the misallocation of funds due to cheap , nearly zero credit.

Excess corporate debt is a very serious problem, and now a bigger problem due to the demand problems in play due to covid, theres talk of a 10 trillion dollar corporate debt bomb.

We aren't watching a baseball game, with no influence on the outcome. Knowing that such risks like corporate defaults and debt bombs are possible, we have the opportunity to mitigate those risks.

I'm not a fan of limitless quantative easing, but I don't know if I'd call it misallocation. Recovery requires a certain amount of QE to ensure that companies can still get credit.

[daletournier]

Originally Posted by Lake-Effect

"Junk" is a technical designation, and there are are several different ratings and risk levels, as you know.


We aren't watching a baseball game, with no influence on the outcome. Knowing that such risks like corporate defaults and debt bombs are possible, we have the opportunity to mitigate those risks.

I'm not a fan of limitless quantative easing, but I don't know if I'd call it misallocation. Recovery requires a certain amount of QE to ensure that companies can still get credit.

I'm not quite sure what you are trying to say?

You started by saying that the fed wasnt buying junk, this was then shown to you as not true, then you pulled a few household names out of your hat like Ford and suggested junk is different because they are well known companies? now your saying "well ,Junks just a word"....the junk bond market is a risky market that gives higher yields to compensate, companies get downgraded to Junk because they become a riskier proposition due to a variety of reasons, alot of these reasons revolve around to much debt .....

Its artificially low interest rates that are causing misallocation of funds, there's always unintentional consequences. It could be argued that QE amongst other "tools" have only been helpful in delaying the inevitable and amplifying the consequences. These companies have taken the easy road and borrowed to buy back stock increasing the company's value instead of innovating ,taking risk and doing the hard worked need to prosper....not their fault, poor Fed & government policies allowing it.

IF 2008 was allowed to happen it could be argued we would be in a much better position now to handle the current virus economic problem...ie less debt ,less fragile. More QE and artificially low interest rates are just prolonging the inevitable, it only works for so long.

You keep arguing your optumistic outlook BUT never back it up with anything of any substance?

I keep saying "I hope you are right" BUT I dont blind myself to real world facts.

[daletournier]

One other thing, you suggest you can avoid the fallout of a US corporate debt explosion.....you cant. Not holding the debt dosen't make you immune to the fallout, the problem is way to big to think it cant effect you....good luck mitigating around it IF it happens.

[Boat Guy]

I don't know your thoughts, but these fiscal times are concerning to me...

It used to be, through my lifetime, that as long as you held up your end and were fiscally conservative / responsible, you could be assured you could weather a storm...

Though, with this monetary policy, interest rate situation, and BRICs trying to unseat the USD as the reserve currency, I'm not even sure of anything now...

I just feel like things are just crazy. AAPL has basically doubled...But when you look at the financial fundamentals, you see that all that's happened is the P/E has doubled...It used to trade at an investors price...Now, at close to 40X,people think they are rock stars for their shares going up, but I see a very unsophisticated "investor" just speculating...TSLA, AMZN, etc...You might argue there's value to these companies, but at the price per share, it's not investing anymore....When this crashes, IMO, I don't know how things will shake out...

I know, by traditional markers, they say inflation is low, but is that what you're seeing? I'm seeing everything climb and I'm concerned about the value of a dollar...

[daletournier]

Originally Posted by Boat Guy

I don't know your thoughts, but these fiscal times are concerning to me...

It used to be, through my lifetime, that as long as you held up your end and were fiscally conservative / responsible, you could be assured you could weather a storm...

Though, with this monetary policy, interest rate situation, and BRICs trying to unseat the USD as the reserve currency, I'm not even sure of anything now...

I just feel like things are just crazy. AAPL has basically doubled...But when you look at the financial fundamentals, you see that all that's happened is the P/E has doubled...It used to trade at an investors price...Now, at close to 40X,people think they are rock stars for their shares going up, but I see a very unsophisticated "investor" just speculating...TSLA, AMZN, etc...You might argue there's value to these companies, but at the price per share, it's not investing anymore....When this crashes, IMO, I don't know how things will shake out...

I know, by traditional markers, they say inflation is low, but is that what you're seeing? I'm seeing everything climb and I'm concerned about the value of a dollar...

Good post, real observations.

[Lake-Effect]

Originally Posted by daletournier

You started by saying that the fed wasnt buying junk, this was then shown to you as not true, then you pulled a few household names out of your hat like Ford and suggested junk is different because they are well known companies? now your saying "well ,Junks just a word"....the junk bond market is a risky market that gives higher yields to compensate, companies get downgraded to Junk because they become a riskier proposition due to a variety of reasons, alot of these reasons revolve around to much debt ...

I was definitely wrong about the Fed not buying junk bonds. My apologies. That being said, "junk" is still a term with a specific technical meaning in the bond market, and with several shades of risk. I didn't pull those company names out of a hat; they came from your link about what junk bonds the Fed was picking up.

Its artificially low interest rates that are causing misallocation of funds, there's always unintentional consequences. It could be argued that QE amongst other "tools" have only been helpful in delaying the inevitable and amplifying the consequences. These companies have taken the easy road and borrowed to buy back stock increasing the company's value instead of innovating ,taking risk and doing the hard worked need to prosper....not their fault, poor Fed & government policies allowing it.

IF 2008 was allowed to happen it could be argued we would be in a much better position now to handle the current virus economic problem...ie less debt ,less fragile. More QE and artificially low interest rates are just prolonging the inevitable, it only works for so long.

Can you really make that case about 2008? Asking seriously; others I listen to think we dodged a bullet there. I won't pretend that the post-2008 economy was rock-solid or robust, but it certainly could have been worse, with many more economic casualties.

I'm told that many lessons were learned from 2008, and that those lessons have helped guide the speed and target of the pandemic economic responses.

You keep arguing your optumistic outlook BUT never back it up with anything of any substance?

I keep saying "I hope you are right" BUT I dont blind myself to real world facts.

And I feel that at least part of your doom 'n gloom is just your general unease.

I'm guardedly optimistic because I believe that too many of us are in the same boat, and because the economic fundamentals are now so closely managed, that there's both the desire and the tools to at least try to avoid the worst outcomes. And because there's still much wealth sloshing around in the system and on the sidelines, much of which would disappear if things go really pear-shaped.

One other thing, you suggest you can avoid the fallout of a US corporate debt explosion.....you cant. Not holding the debt dosen't make you immune to the fallout, the problem is way to big to think it cant effect you....good luck mitigating around it IF it happens.

All I'm saying there is that if the smart people can see risks and forecast a problem, they can include it in their deliberations and planning.

[daletournier]

Originally Posted by Lake-Effect

I was definitely wrong about the Fed not buying junk bonds. My apologies. That being said, "junk" is still a term with a specific technical meaning in the bond market, and with several shades of risk. I didn't pull those company names out of a hat; they came from your link about what junk bonds the Fed was picking up.

Can you really make that case about 2008? Asking seriously; others I listen to think we dodged a bullet there. I won't pretend that the post-2008 economy was rock-solid or robust, but it certainly could have been worse, with many more economic casualties.

I'm told that many lessons were learned from 2008, and that those lessons have helped guide the speed and target of the pandemic economic responses.


And I feel that at least part of your doom 'n gloom is just your general unease.

I'm guardedly optimistic because I believe that too many of us are in the same boat, and because the economic fundamentals are now so closely managed, that there's both the desire and the tools to at least try to avoid the worst outcomes. And because there's still much wealth sloshing around in the system and on the sidelines, much of which would disappear if things go really pear-shaped.


All I'm saying there is that if the smart people can see risks and forecast a problem, they can include it in their deliberations and planning.

You just keep coming back to we are all in the same boat , theres to much to lose therefore we wont!...what can I say, that's just a nothing argument. The fact you didnt even know the fed has and is buying junk suggests theres much more you dont understand or havent taken the time to look into, most haven't, most wont, its uncomfortable.

They have the tools! really??? they just dont, they can print money, nothing else, the next step is zero or negative interest rates, they've run out of ammo.

2008 wasnt solved, it was delayed by papering over it, dig into it, have a look, it's all there.

In regards to labeling me "doom and gloom" that's a typical label that comes from people that have no facts to argue with or fail to put the work in.

For the record I'm optimistic regarding long term, In fact I feel we can be in a better place BUT we dont get to bypass the pain that comes with change and the longer we put off the dealing with the fundamental problems the greater the pain will be.

I apply a SWOT to my life and finances, optimism and pessimism dont serve me, useless emotions to trip over.

I genuinely hope your right mate, I fear your non factual optimism is going to bite you on the ass.

[Heath68]

A lot of technical arguments going both ways.. getting back to the original post, I was presented with a cat that had been £1.45m then £995k now at £895! Someone is feeling the pinch by the looks of it...

[Lake-Effect]

Originally Posted by daletournier

You just keep coming back to we are all in the same boat , theres to much to lose therefore we wont!...what can I say, that's just a nothing argument.

... and I think you're not giving this argument a fair consideration. The world is more connected and inter-dependent, even moreso than in 2008. And more wealthy. These are fundamentals too.

Just answer this: the debt that's accruing from these crises... who holds it?

I genuinely hope your right mate, I fear your non factual optimism is going to bite you on the ass.

We hope for the best, and plan for the worst.

[daletournier]

Originally Posted by Lake-Effect

... and I think you're not giving this argument a fair consideration. The world is more connected and inter-dependent, even moreso than in 2008. And more wealthy. These are fundamentals too.

Just answer this: the debt that's accruing from these crises... who holds it?

We hope for the best, and plan for the worst.

Which debt? If your talking US treasuries well it's a combination of individuals, other countries and in our crazy world the treasury itself, they use the debt to print more money to buy more debt!

Or are we talking corporate debt, private household debt, student debt, auto debt , credit card debt, unfunded liabilities (a type of debt).....trust me when I say I give considerate amounts of time to all sides of the argument and want you to be right and me to be wrong.....but it's very hard to see any reality to your argument, give me some numbers, give me some data, give me something substantial other than hope!

The interconnectness makes it worse, not better....more wealth hmmmm, please define wealth?

Bottom line is we have a debt problem trying to be solved by more debt.

[daletournier]

Originally Posted by Lake-Effect

I was definitely wrong about the Fed not buying junk bonds. My apologies. That being said, "junk" is still a term with a specific technical meaning in the bond market, and with several shades of risk. I didn't pull those company names out of a hat; they came from your link about what junk bonds the Fed was picking up.

Can you really make that case about 2008? Asking seriously; others I listen to think we dodged a bullet there. I won't pretend that the post-2008 economy was rock-solid or robust, but it certainly could have been worse, with many more economic casualties.

I'm told that many lessons were learned from 2008, and that those lessons have helped guide the speed and target of the pandemic economic responses.


And I feel that at least part of your doom 'n gloom is just your general unease.

I'm guardedly optimistic because I believe that too many of us are in the same boat, and because the economic fundamentals are now so closely managed, that there's both the desire and the tools to at least try to avoid the worst outcomes. And because there's still much wealth sloshing around in the system and on the sidelines, much of which would disappear if things go really pear-shaped.


All I'm saying there is that if the smart people can see risks and forecast a problem, they can include it in their deliberations and planning.

It's easy to forecast the problem...solution?