Buckle up, the crash is sooner rather than later

[Bernardo de la Paz]

Give me the dummy version of this. What "institutional companies" are at risk here?

Yeah, @CaribGator, what do you think the risk is?

 

[CaribGator]

Institutional Traders vs. Retail Traders: What's the Difference?

Retail traders buy and sell securities for their own accounts, while institutional traders buy and sell for accounts they manage for groups or institutions.

www.investopedia.com

Institutional trading

THIS IS A DEFAULT SITE LEVEL META DESCRIPTION 320 320

www.flowtraders.com

all investments are risks...

I think this action just opened the door to a rapid vaporization of those assets. When it was limited, obviously the risk wasn't as big, maybe even shared across all accounts.. but this is similar to someone at the poker table going all in,, these institutional traders can basically wipeout everything they have on the books. They were limited before

damn near everyone's 401 is managed by some company,.. those companies can have a stake in a fund that is mostly controlled by an institutional trader,, bigger slice of the pie,, hurting the earnings of a company that has a ripple effect

 

[GatorCatsi]

all investments are risks...

This should not surprise.

 

[URGatorBait]

all investments are risks...

t-gators mom was a risk-free investment

 

[GatorCatsi]

At first, slowly, then all at once.

Real estate experts see ‘a big selloff coming’ as treasury yields close in on cap rate​

Real estate investors in the US may be creeping up on pretty big problems as the Federal Reserve (Fed) keeps on raising rates and promising more to come to tame inflation.

The last Consumer Price Index (CPI) data released on September 13 showed that inflation is running hotter than expected and that analysts that predicted peak inflation were wrong.

More importantly, home prices across the globe spiked during the Covid lockdowns; therefore, a correction has been in the making; however, according to Nick Gerli, the founder of Reventure Consulting and the owner of the number 1 YouTube channel on real estate investing, a big selloff is coming.

Namely, Gerli pointed to the fact that the 6-month US Treasury yield is almost the same as buying and renting out a house in America (Cap Rate), translating into little to no incentive for investors to be in these markets.

Single-family house cap rate vs. 6-month US treasury yield. Source: Twitter

Margin calls​

Furthermore, Gerli claims that Wall Street real estate investing was not built to last, as investors are stopping purchases, banks will make margin calls to investors to sell their property and reduce assets on books.

​

 

[CaribGator]

 

[LoyalGatorFan]

This incoming crash needs to happen. It will be rough but necessary. We need to break away from the enslavement, debt riddled, taxed out the wazoo central bank system. Whether we go full on crypto or go back to the gold backed dollar, a new economy is coming. It will be nothing like we have seen before and it will be beautiful. But unfortunately we will have to go through financial hell a little bit to get to heaven.

I am nowhere near an expert but I would rexommend investing in crypto and/or precious metals for now....too much risk in stocks and bonds IMO....

You think it's bad here? Argentina's interest rate is 75%!! And we know whats happening with the Netherlands and other countries...ya know one country that's doing quite well? Russia....as soon as Putin broke away from the globalist petrodollar system they have taken off with the ruble...and what does that mean? The higher the USD goes against every currency (except ruble) the greater the incentive every nation will have to buy oil from Russia in non-USD to survive thereby de-dollarizing their oil imports.

Say what you want about Putin-Ukraine but at least from a financial/economical perspective, Putin is showing the world how bad the globalist/NWO system is

 

[LoyalGatorFan]

@BackAlleyGator

I must say I really don't understand your humor....you seem to laugh or find serious posts funny all the time....is it sarcastic like you don't believe the post? Or is it something else?

 

[Back Alley Gator]

@BackAlleyGator

I must say I really don't understand your humor....you seem to laugh or find serious posts funny all the time....is it sarcastic like you don't believe the post? Or is it something else?

Its funny you actually believe what you post. That's why I laugh.

We aren't going full crypto. We aren't going back to a gold based dollar. And we aren't going to get rid of the central bank.

 

[LoyalGatorFan]

But everything I mentioned regarding Russia is true....so why the scoff? All it takes is 10-15 mins of non MSM research to see the world is done with the central bank....now I am not saying the central bank won't still try to push us into their new system but the Great Reset can't work if the vast majority of countries/people aren't on board...and that's exactly what's happening

 

[Bernardo de la Paz]

But everything I mentioned regarding Russia is true....so why the scoff?

Not only was it not true, it didn't even make sense.

 

[Bernardo de la Paz]

Give me the dummy version of this. What "institutional companies" are at risk here?

Okay. Instead of being a jerk, I'll explain that story that is not actually a big deal.


When two parties enter into something like an options contract, they could potentially be exposed to two risks, the risk of being on the out of the money side of the contract, and also the risk that the other party might not be able to pay up if that party ends up out of the money.

To mitigate the second risk, there are financial services companies like the OCC that provide a service of guaranteeing that the contract is paid. The OCC collects fees on each transaction to provide this service, but they need more money to be able to cover if one party can't pay. To manage their risk, they hold collateral (for OCC it's around $100 billion) from the various parties that are clearing house members and participate in these contacts, a small portion of which is cash.

One of the ways that they increase the amount of cash they are holding is to sell repurchase agreements to non member institutions, like pension funds. The way that works is they take government securities that have been provided as collateral by members, and sell those securities along with a commitment to buy them back after a short period for a premium. They pay the premium out of the transaction fees they collect mentioned above.

The filing that created this silly story was that OCC decided to increase the amount of collateral they hold as cash from $8 billion to $10.5 billion (out of their total $100 billion in collateral), and to facilitate that they are removing a cap they had set of $1 billion on the amount of cash from non member institutions.

This is really not a big deal. The $35 trillion number is completely ridiculous to reference in the story. That's the total amount of all pension funds. First of all, the max amount the OCC could ever sell to pensions through these repurchase agreements is limited by the amount of collateral they hold from their member institutions (the $100 billion number.) Second, if the OCC failed and couldn't honor the repurchase agreement, the pensions would not be left with nothing, they'd still have the securities they bought and would only lose the tiny premium on the agreement.

The true risk to pension funds as a whole out of this is in the single digit millions of dollars - less than one millionth of that $35 trillion. An inconsequential amount in the context of US financial markets.

 

[BMF]

Okay. Instead of being a jerk, I'll explain that story that is not actually a big deal.


When two parties enter into something like an options contract, they could potentially be exposed to two risks, the risk of being on the out of the money side of the contract, and also the risk that the other party might not be able to pay up if that party ends up out of the money.

To mitigate the second risk, there are financial services companies like the OCC that provide a service of guaranteeing that the contract is paid. The OCC collects fees on each transaction to provide this service, but they need more money to be able to cover if one party can't pay. To manage their risk, they hold collateral (for OCC it's around $100 billion) from the various parties that are clearing house members and participate in these contacts, a small portion of which is cash.

One of the ways that they increase the amount of cash they are holding is to sell repurchase agreements to non member institutions, like pension funds. The way that works is they take government securities that have been provided as collateral by members, and sell those securities along with a commitment to buy them back after a short period for a premium. They pay the premium out of the transaction fees they collect mentioned above.

The filing that created this silly story was that OCC decided to increase the amount of collateral they hold as cash from $8 billion to $10.5 billion (out of their total $100 billion in collateral), and to facilitate that they are removing a cap they had set of $1 billion on the amount of cash from non member institutions.

This is really not a big deal. The $35 trillion number is completely ridiculous to reference in the story. That's the total amount of all pension funds. First of all, the max amount the OCC could ever sell to pensions through these repurchase agreements is limited by the amount of collateral they hold from their member institutions (the $100 billion number.) Second, if the OCC failed and couldn't honor the repurchase agreement, the pensions would not be left with nothing, they'd still have the securities they bought and would only lose the tiny premium on the agreement.

The true risk to pension funds as a whole out of this is in the single digit millions of dollars - less than one millionth of that $35 trillion. An inconsequential amount in the context of US financial markets.

TLDR! :)

 

[GatorCatsi]

THE FED IS LYING (ABOUT QT)

This might shock you, but the Fed is lying about Quantitative Tightening (among other things).

The fear of rate hikes combined with QT have hammered financial markets all year. According to the Fed's schedule, QT was set to double in the month of September. That has yet to come to pass.

"QT is running well below where it's supposed to," says Financials analyst Josh Steiner on The Call this morning. "They've actually increased their holding of securities month-to-date in September... It's getting to the point where things are interesting and you wonder, 'What's the plan if they can't get anywhere close to the numbers they're committed to?"

 

[LoyalGatorFan]

Not only was it not true, it didn't even make sense.

How so?

 

[Bernardo de la Paz]

How so?

For starters, Russia isn't doing well.

Also, the currency controls they have in place to prop up the ruble hurt their oil sales, not help.

 

[URGatorBait]

For starters, Russia isn't doing well.

Also, the currency controls they have in place to prop up the ruble hurt their oil sales, not help.

I was told by Crete that the ruble was going to take over the world though....and now you tell me this?

 

[CaribGator]