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Fraud runs rampant before large market collapses. https://www.history.com/news/roaring-twenties-scams-ponzi-wall-street https://www.history.com/news/roaring-tw

Fraud runs rampant before large market collapses. https://www.history.com/news/roaring-twenties-scams-ponzi-wall-street https://www.history.com/news/roaring-twenties-scams-ponzi-wa... It happened in the 20s, before 2008, and it's happening again. Trump doing this is an extra level of depraved, and I suspect the coming crash will follow suit.

tombert 2y ago
It makes me wonder if I should pull my savings out of index funds and just keep cash in a savings account in the short term. Normally I'd buy treasury bills, but honestly considering that Elon has been fucking around with the treasury's code with no oversight, and considering that Trump's big strategy for eliminating national debt has been to "declare bankruptcy" (whatever that would even means in regards to an entire country that is the world's reserve currency?), I'm hesitant to even do that. I wonder if I should look into seeing if I can buy bonds for the EU equivalent of the US treasury...
- IAmGraydon 2y ago
  Whatever you do, do not buy bonds right now. As they sell off and rates rise, the value of your bonds on the secondary market will get trashed. You'll also have an opportunity to buy bonds with massive yields if the market crashes due to a debt crisis. I mean imagine getting paid 20% per year, tax advantaged, for the next 30 years. Honestly, the rule with indexes is buy and hold. Although I'm confident we have a crash incoming, unless you need the money soon, you should just hold your index funds and add everything you can to it at the bottom. You'll also have to pay taxes on the realized gains if you go to cash. I do believe that Trump's entire presidency is going to be a massive crash, temporary rebound, and then downtrend through 2028. We will probably not return to highs until the 2030s.
  - tombert 2y ago
    I wasn't planning on buying long-term bonds regardless; historically I have bought short-term treasury bills, usually 4 to 8 weeks, depending on the coupon rate, so I'm not too worried about the value on the secondary market. I'm much more concerned with the fed defaulting on paying me back. I more or less came to the same conclusion that you listed; I don't really want to create a big taxable event, so I think right now I'm going to keep the stock I have, and in the shorter term keep future income in a savings account for awhile and suss out if there's going to be a crash or not. Obviously you can't really "time" the market but it's a pretty low-risk experiment on my end.
- rsynnott 2y ago
  > and just keep cash in a savings account in the short term. Ah, but remember the tariffs stuff; you could be looking at _pretty dramatic inflation_ depending on how that works out (personally I suspect he will be ultimately unable to do that much for long; there is likely a level of market disruption at which he will be Liz Trussed, but who knows). All is risk. > I wonder if I should look into seeing if I can buy bonds for the EU equivalent of the US treasury... No such thing; the EU doesn't really have debt-raising powers. This confuses people, but the EU/EC is _not_ a conventional government, and has only a tiny budget (170bn this year). You can buy European sovereign debt, but it's on a per-country level. Bear in mind that by doing this you'd also be taking on currency risk. Personally I wouldn't touch sovereign debt denominated in another currency; YMMV.
  - thrance 2y ago
    Liz Trussed: f*cking up the economy so badly and so quickly your own party ousts you. I love it!
    - rsynnott 2y ago
      I think she's possibly the _clearest_ example of this in recent years; there've been others (realistically, "screwed up, or is perceived to have screwed up, the economy" is one of the more common reasons for national leaders to get their marching orders), but the sequence of "deranged budget proposal, catastrophic market crash, no more Liz" was just perfect. She didn't even, in the end, really _do_ anything; even the suggestion that she might do the things that she wanted to do was enough to cause a crisis. (With Trump, the dynamic is a bit different, at least for now; he claims to want to do all sorts of absolutely bonkers things, and the markets are generally going "well, yeah, but you're not really going to, are you?")
  - tombert 2y ago
    Yeah, inflation worries have me concerned too. I am not sure what to do. I might look into one of the “total world” funds instead of just the US based ones like I usually do.

tombert 2y ago

It makes me wonder if I should pull my savings out of index funds and just keep cash in a savings account in the short term. Normally I'd buy treasury bills, but honestly considering that Elon has been fucking around with the treasury's code with no oversight, and considering that Trump's big strategy for eliminating national debt has been to "declare bankruptcy" (whatever that would even means in regards to an entire country that is the world's reserve currency?), I'm hesitant to even do that. I wonder if I should look into seeing if I can buy bonds for the EU equivalent of the US treasury...

IAmGraydon 2y ago
Whatever you do, do not buy bonds right now. As they sell off and rates rise, the value of your bonds on the secondary market will get trashed. You'll also have an opportunity to buy bonds with massive yields if the market crashes due to a debt crisis. I mean imagine getting paid 20% per year, tax advantaged, for the next 30 years. Honestly, the rule with indexes is buy and hold. Although I'm confident we have a crash incoming, unless you need the money soon, you should just hold your index funds and add everything you can to it at the bottom. You'll also have to pay taxes on the realized gains if you go to cash. I do believe that Trump's entire presidency is going to be a massive crash, temporary rebound, and then downtrend through 2028. We will probably not return to highs until the 2030s.
- tombert 2y ago
  I wasn't planning on buying long-term bonds regardless; historically I have bought short-term treasury bills, usually 4 to 8 weeks, depending on the coupon rate, so I'm not too worried about the value on the secondary market. I'm much more concerned with the fed defaulting on paying me back. I more or less came to the same conclusion that you listed; I don't really want to create a big taxable event, so I think right now I'm going to keep the stock I have, and in the shorter term keep future income in a savings account for awhile and suss out if there's going to be a crash or not. Obviously you can't really "time" the market but it's a pretty low-risk experiment on my end.
rsynnott 2y ago
> and just keep cash in a savings account in the short term. Ah, but remember the tariffs stuff; you could be looking at _pretty dramatic inflation_ depending on how that works out (personally I suspect he will be ultimately unable to do that much for long; there is likely a level of market disruption at which he will be Liz Trussed, but who knows). All is risk. > I wonder if I should look into seeing if I can buy bonds for the EU equivalent of the US treasury... No such thing; the EU doesn't really have debt-raising powers. This confuses people, but the EU/EC is _not_ a conventional government, and has only a tiny budget (170bn this year). You can buy European sovereign debt, but it's on a per-country level. Bear in mind that by doing this you'd also be taking on currency risk. Personally I wouldn't touch sovereign debt denominated in another currency; YMMV.
- thrance 2y ago
  Liz Trussed: f*cking up the economy so badly and so quickly your own party ousts you. I love it!
  - rsynnott 2y ago
    I think she's possibly the _clearest_ example of this in recent years; there've been others (realistically, "screwed up, or is perceived to have screwed up, the economy" is one of the more common reasons for national leaders to get their marching orders), but the sequence of "deranged budget proposal, catastrophic market crash, no more Liz" was just perfect. She didn't even, in the end, really _do_ anything; even the suggestion that she might do the things that she wanted to do was enough to cause a crisis. (With Trump, the dynamic is a bit different, at least for now; he claims to want to do all sorts of absolutely bonkers things, and the markets are generally going "well, yeah, but you're not really going to, are you?")
- tombert 2y ago
  Yeah, inflation worries have me concerned too. I am not sure what to do. I might look into one of the “total world” funds instead of just the US based ones like I usually do.