Market Bubbles: How Many Boats are We On?

[bucket]

Was at a steel shop this week and told the reason steel prices are through the roof is because big auto is stock piling for months in advance therefore making unusual shortages. Why are they panic buying if the market is going to crash ? And guess what the price of new auto's will have to do to pay for that higher steel value. If everybody backs away from this steel and lumber market for a few months which I think some folks are going too things will cool down.

People spending their government cheques on renovations ...Is that what is driving the lumber market up?

[Old Cowzilla]

I hear a few people say screw it we won't build a deck this year buy a lawn chair and sit under a shady tree and drink beer. Lumber yards are gonna get stuck with some high priced inventory out of this, OSB $35 compared to $10 two years ago people are waking up.

[jazz]

The economy is teetering on a pin right now. If the virus is not beaten in the next few months she will be toast.

20 US states are monitoring rising cases again and this with a population that is approaching 30% vaccinated.

https://www.cnbc.com/2021/03/22/covid-new-jersey-likely-to-pause-reopening-plans-as-cases-rise-governor-says.html

[errolanderson]

One-by-one, commodities now dropping . . . .

King of commodities 'crude oil' down sharply off $10 per barrel from recent highs . . . . Europe lockdown contributing more selling. Precious metals stumbling at-best. Cattle struggling. Copper off. Global wheat prices easing. Nat gas market again dead.

Container shipping rates remain in steady climb. Consumers ordering from China from home. Container shortage and floating ship parking lots awaiting delayed unloads. Containers all made unfortunately in China. Definitely, ocean freight inflation as a result of buyer online demand.

But for the banks, go ahead, hike those rates. Should be no problem will all your inflation talk . . . then let the defaults begin . . . .

[furrowtickler]

It’s too bad the costs for everything related to Ag are skyrocketing at the same time , no phos left , glyphosate is in short supply , fuel going through the roof.
So this bubble is bursting yet retail still going through the roof , what’s really going on ? You hear pent up demand , slow down in manufacturing, and all kinds of excuses.
Something definitely out of whack .
‘Tis a strange year already

[jazz]

This blip in prices is more likely supply chain related than inflationary.

errol is probably watching gold which is falling in price and historically thats deflationary.

[biglentil]

They can paper over the futures market to arrive at any price they like. That works until there are defaults on delivery. The spreads between physical and spot are growing.

[Sodbuster]

The sooner we start to raise interest rates the better we will be in the long run. Housing market inflation is out of control in many of the large cities, stock market is is over inflated because its the only place to put your money, bond and GICs rate of return near zero.

[errolanderson]

Sensing a real turning point in markets coming upon all of us very soon. There are many asset bubbles, but is that true inflation? Or is this purely the result of manipulated bank policy?

Inflation to me is demand driven, not simply an asset to park money, just because . . . .

The Fed is totally hooped (IMO). The money printing gig is up. Central bank policy is now clearly failing . . .

It had only resulted in a greater income divide that is not healthy. Also, how can money printing solve the current economic delimna? What is the end game? Unending out-of-control inflation to solve the out-of-control government spending? Investors are so naive (IMO), so gullible or simply so greedy. Maybe, a combo of all of the above. But this is the consequence of cuddled central bank policy, with no regards of an end game.

My opinion: Is there a chance of incoming deflation, upside-down mortgages and mass defaults? You betcha. . . . You can’t hide behind false inflation and asset worth on money printing.

This turn-in-the-road is now fast approaching.

An opinion . . . .

[macdon02]

I think the geniuses running the asylum, broke shit. And not just the light bulbs, they trashed the place to the point survival might be the only thing that matters. There's toilet paper, mattresses and walls on fire but don't worry, "the grownups are in charge". I am starting to believe every conventional store of wealth is about to break, including the unconventional. It won't matter how you identify, or if there's an army behind your ideology, when govt defaults on debt, or inflation is too rampant, the army will side with the people rather then the rulers. Deflation means taxes are in a runaway. They are gonna pull the plug. Don't worry about gold, guns or ammo, there'll be enough laying on the ground after everyone kills each other. Stay out of sight for the first while and it'll be fine.

[tmyrfield]

did someone mention boats?

https://twitter.com/jsrailton/status/1374438210315513864 https://twitter.com/jsrailton/status/1374438210315513864

[jazz]

The inflation trade is a bit skeptical for sure. I mean after people dump their stimulus cheques into whatever, what will they have excess money to buy? Every consumer is tapped to the gills with debt and the stagnant income. Still 10M americans out of work since pre covid. I mean tens of millions of people couldnt pay 3 months of expenses and needed the govt. What extra money are they going to find to buy goods and services. And even if they do go on a buying binge, the only products we get are from china, so the inflation will be there, not here.

I am hearing a lot of reports about people throwing in the towel with their businesses and professions. Nurses, teachers, doctors, small biz owners, parents that want to stay home with kids now, women that want to exit the workforce and young people banking on UBI.

[biglentil]

The true definition of inflation before Keyesians changed the definition in the early 20th century is an expansion of the money supply. Price inflation is symptom of more dollars chasing fewer good. Supply disruptions and poor productivity have hurt supply right when 40% of all dollars have been printed in the last year. The market is all about speculation now, no different than Weimer Germany 1922.

[errolanderson]

U.S. Fed is now doing something called reverse repos. This is the lending process between the Fed and financial institutions.

Translation: Financial institutions are now content to leave money at 0 percent parked. And the Fed is now having difficulty and confidence lending money out to financial institutions for higher than 0 percent.

This situation does not reflect any sort of boom or recovery (IMO). It also suggests that inflation is very frail, a flash in the pan.

How many market bubbles are now ripe for the picking?

[chuckChuck]

The economy is teetering on a pin right now. If the virus is not beaten in the next few months she will be toast.

20 US states are monitoring rising cases again and this with a population that is approaching 30% vaccinated.

https://www.cnbc.com/2021/03/22/covid-new-jersey-likely-to-pause-reopening-plans-as-cases-rise-governor-says.html

Whaaat? Weren't you just telling us that covid was dropping regardless of vaccination rates? LOL

If you predict doom and gloom long enough given enough time eventually a large correction will happen.

What we do know is the ultra rich are getting richer and hording their wealth which can't be good for democracy or the economy. It's a way better to put more money in the hands of low and medium income earners as they will spend alot of it on basic necessities.