A
AscensionMan98
Kraken
- Joined
- Jun 14, 2020
- Posts
- 7,783
- Reputation
- 8,093
Obviously in the end only time will tell.
Seems that the QE crack addicted market is having a hard time digesting the news of rates increasing and staying high till mid 2023.The reasoning being likely that we have so many zombie companies ( A "zombie company" is a term used to describe an uncompetitive company that needs a bailout to operate successfully or an indebted company that is only able to repay interest on its debt (interest-coverage ratio of 1 or less). Considering the fact that they got bailed out twice, 2008/2009 in intervals and 2020 and extra stimulus in late 2020/early 2021, it makes sense why the markets are freaking out as these unprofitable zombie companies that should have been bankrupt long ago but survived on cheap low interest debt can no longer borrow easily. This wouldn't be an issue except when their margins were a few % to begin with. This means many will disappear.
The forecast is 4.2-4.8% by mid 2023, and then staying their till early to mid 2024 at which we would see rate decreases.
I guess what I'm wondering is whether their is a chance we can recover anyways, at least in the short term, rally like 30-40% in the Nasdaq100 , or 18-25% in the sp500 in 4-6 months. This would also likely correlate with a crypto market as bitcoin and the nasdaq have been exhibiting strong correlation. This makes sense as risk assets like the tech heavy nasdaq have sold off, so naturally the most speculative asset ,crypto would also sell off.
In the end a mega crash of magnitude is guaranteed. Whether its going to happen now , or in the next 6 months is of question. What do you guys think. Can stock and crypto rally in this rate hike market. The only thing that might help is if the elites make a stock melt up to help increase the chances of a democrat party sweepstake in midterms, as voters often look at the economic conditions and they might blame Biden and the democrats for messing things up, so if things recover it would falsely make voters think that the democrats are fine and not cause of the stock market decline, and then more likely to vote them. But it hardly matters as the elections are rigged, like the 2020 one in my opinion, so this argument in itself may not be that strong.
The other argument is that their have been stock market rally with rate hikes. While the number of zombie companies is far more now ( hence the more immediate and strong er reaction on wall street ), its not an impossibility to rally with rate hikes. Rate hikes could also reflect positive sentiment of the economy being strong which could boost in the short term some investments.Generally the rate hikes take a while to effect things though, so it makes me wonder if their is still some rally left.
P.S- Are you invested in stocks/crypto/futures or doing any option trades. If so what positions are they .
Seems that the QE crack addicted market is having a hard time digesting the news of rates increasing and staying high till mid 2023.The reasoning being likely that we have so many zombie companies ( A "zombie company" is a term used to describe an uncompetitive company that needs a bailout to operate successfully or an indebted company that is only able to repay interest on its debt (interest-coverage ratio of 1 or less). Considering the fact that they got bailed out twice, 2008/2009 in intervals and 2020 and extra stimulus in late 2020/early 2021, it makes sense why the markets are freaking out as these unprofitable zombie companies that should have been bankrupt long ago but survived on cheap low interest debt can no longer borrow easily. This wouldn't be an issue except when their margins were a few % to begin with. This means many will disappear.
The forecast is 4.2-4.8% by mid 2023, and then staying their till early to mid 2024 at which we would see rate decreases.
I guess what I'm wondering is whether their is a chance we can recover anyways, at least in the short term, rally like 30-40% in the Nasdaq100 , or 18-25% in the sp500 in 4-6 months. This would also likely correlate with a crypto market as bitcoin and the nasdaq have been exhibiting strong correlation. This makes sense as risk assets like the tech heavy nasdaq have sold off, so naturally the most speculative asset ,crypto would also sell off.
In the end a mega crash of magnitude is guaranteed. Whether its going to happen now , or in the next 6 months is of question. What do you guys think. Can stock and crypto rally in this rate hike market. The only thing that might help is if the elites make a stock melt up to help increase the chances of a democrat party sweepstake in midterms, as voters often look at the economic conditions and they might blame Biden and the democrats for messing things up, so if things recover it would falsely make voters think that the democrats are fine and not cause of the stock market decline, and then more likely to vote them. But it hardly matters as the elections are rigged, like the 2020 one in my opinion, so this argument in itself may not be that strong.
The other argument is that their have been stock market rally with rate hikes. While the number of zombie companies is far more now ( hence the more immediate and strong er reaction on wall street ), its not an impossibility to rally with rate hikes. Rate hikes could also reflect positive sentiment of the economy being strong which could boost in the short term some investments.Generally the rate hikes take a while to effect things though, so it makes me wonder if their is still some rally left.
P.S- Are you invested in stocks/crypto/futures or doing any option trades. If so what positions are they .
