JohnnyMonaco

Short position on Stock Market- Leveraged Loan catastrophe Pt. 2

From 2015 on, Big banks have BEEN at it with multi-billion dollar sales of new synthetic CDO product (Bespoke Tranche Opportunities), as well as "loan pool auctions" by Freddie Mac and Fannie Mae, that essentially repackage defaulted loans and re-sell them for more risk averse investors. This has continued to make our financial institutions rich, as you can easily note with naked eyes, with major indexes hitting record highs. as well as increased volatility . Im calling bullshit, due to the fact that the leveraged loan market has ballooned in the past two years, hitting a record of $1.66 Tril in 2017 and standing still at $1.46 Tril in 2018. The dictator at this point is the Fed's interest rates, with California's housing market in shambles, millennial's lack of financial stability (making them incapable of purchasing a stable mortgage loan) and the abyss of credit the United States Financial systems have dug themselves into, I smell another consumer bailout in the course of the next 1-2 years. Make sure you get plenty of Velveeta, tobacco dip and baby wipes.
Wave 2 --- "Can Not Ever" --- retrace more than 100 % of Wave 1
For information only
+3 Reply
chocotraders jeffreyjim
@jeffreyjim, don't even bother to make any sense of that count.
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chocotraders jeffreyjim
@jeffreyjim, if anything we're in wave 4 right now.
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jeffreyjim chocotraders
@chocotraders,
The # 1 Wave Count to think about at this time is.
My opinion --- at this time we are in Wave 2 down of a Five Wave move up.
Wave 1 up started 12-26-2018 low --- "DJIA" --- and ended at 26,696.00 on 4-23-2019.
The # 2 Wave count to think about at this time is, we are in Wave 4.
For information only.

I could be 100 % wrong and you could be 100 % right.
Only time will tell.
"One Eye Jim"
+1 Reply
chocotraders jeffreyjim
@jeffreyjim, ok, thanks for your views. good weekend
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Also, I really like this model you’ve made. One interesting thing we could do to multiply it’s analytical value is pair up the DJI with this created index and see how correlated they are.
If the correlation holds above 90, you can very easily take the foreign indices, isolate them to form their own index and see how much of the drag in those other economies will impact that of the US... after all, they’ve already begun recessionary periods with reduced consumer confidence...
we could very well use this as a lead to forecast how much our index should be affected by default on a regressive basis.

Just a thought.
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JohnnyMonaco thehoplite
@thehoplite, I agree, as well as this if you wanna take a look at some Real Estate ETF's (ticker URE) and Inverse ETF (SRS) you can clearly see from the peak of the financial crisis in 2008, followed by Obamas stimulus package, there have been absolutely nothing but long positions placed on Real Estate. As well as this, news just came out about Wall Street giants purposely missing bond payments to make money off each others Credit Default Swaps, now theres 8 trillion that needs to get cleaned. You can find the article on Bloomberg if you haven't already seen it
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Pretty much. Though, I really wish they’d let it deflate. Put risk front-loaded back in investments and let housing prices come down... that would be the fairest thing to do for our country. I just don’t think Trump would allow that to happen, give how his net worth is tied to real estate capital... time to get into inflationary hedges.
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