4 ms·

You're stating this as a fact. Can you provide any reasoning or evidence?

by aggie 7y ago

llcoolv 7y ago
First of all, thank you very much for reasoning instead of downvote, swear & deny. I really do appreciate it. I do - over the last 10 years of extensive money printing companies seemed to be healthy, but gathered structural problems, which were not only not solved, but deepened by expanding regulations and such. Just before the crisis started most of the investment grade instruments were BBB (one slight blow away from junk).[0] In December there was a presentation by the local Mieses Institute where a hypotetical scenario similar to what is happening right now (it was a war near EU + another migrant wave leading to in-EU border closures and state of emergency in multiple countries) was played out. What was predicted is extremely similar to what is playing out right now, though the initial shock was supposed to be weaker. I am really sorry the presentation was not in English, it really had all my thoughts put together in a very coherent way. Keep in mind that the 30% drop is just market panic. There have been no bankrupcies, defaults and layoffs yet. This is when the fun is going to start. Another thing that was predicted exactly was that if you look deeper, beyond the indexes, at how the first tranche of the $1.5 trillion package was spent you'd see that hot companies like MSFT restored their value, while troubled ones like UAL received almost nothing. So the bankrupcies, defaults and layoffs have not yet begun and we are already 30% down. What is going to remain after they're done? 0. OECD - "Figure 8. Composition of the investment and non-investment grade categories" https://www.oecd.org/corporate/Corporate-Bond-Markets-in-a-Time-of-Unconventional-Monetary-Policy.pdf https://www.oecd.org/corporate/Corporate-Bond-Markets-in-a-T... P.S. The rest of the OECD report makes for a very very interesting reading in a time like these. But what you're looking for in it is how at year 2000 most common investment grade is A followed by AA and BBB about even, while now it is a total clusterfuck (with apologies).

You're stating this as a fact. Can you provide any reasoning or evidence?

by aggie 7y ago

You're stating this as a fact. Can you provide any reasoning or evidence?

First of all, thank you very much for reasoning instead of downvote, swear & deny. I really do appreciate it. I do - over the last 10 years of extensive money printing companies seemed to be healthy, but gathered structural problems, which were not only not solved, but deepened by expanding regulations and such. Just before the crisis started most of the investment grade instruments were BBB (one slight blow away from junk).[0] In December there was a presentation by the local Mieses Institute where a hypotetical scenario similar to what is happening right now (it was a war near EU + another migrant wave leading to in-EU border closures and state of emergency in multiple countries) was played out. What was predicted is extremely similar to what is playing out right now, though the initial shock was supposed to be weaker. I am really sorry the presentation was not in English, it really had all my thoughts put together in a very coherent way. Keep in mind that the 30% drop is just market panic. There have been no bankrupcies, defaults and layoffs yet. This is when the fun is going to start. Another thing that was predicted exactly was that if you look deeper, beyond the indexes, at how the first tranche of the $1.5 trillion package was spent you'd see that hot companies like MSFT restored their value, while troubled ones like UAL received almost nothing. So the bankrupcies, defaults and layoffs have not yet begun and we are already 30% down. What is going to remain after they're done? 0. OECD - "Figure 8. Composition of the investment and non-investment grade categories" https://www.oecd.org/corporate/Corporate-Bond-Markets-in-a-Time-of-Unconventional-Monetary-Policy.pdf https://www.oecd.org/corporate/Corporate-Bond-Markets-in-a-T... P.S. The rest of the OECD report makes for a very very interesting reading in a time like these. But what you're looking for in it is how at year 2000 most common investment grade is A followed by AA and BBB about even, while now it is a total clusterfuck (with apologies).