Thanks for the responses, everyone.
Got a question for you guys. Let’s say Trump manages to fire J Powell. That will lead to a complete collapse of the world’s trust in the US to be able to maintain some sort of economic sanity. T-bill rates will have to immediately spike, and the whole market is likely to crash. But other than just shorting the entire market (say, puts against SPY), what specific instruments and stocks would be particularly hit in such a scenario?
For instance, if I thought US t-bill interest would spike, is there some sort of future or contract I could buy to profit if that happens?
Are there stocks or sectors that would be particularly impacted by the lack of confidence in the market that would come with a J Powell firing? A more specific set of targets than betting against the market as a whole?
Seems to me like that is the same basic scenario we’ve been gaming out? Basically value of the dollar and of US equities in free fall. Money going anywhere everywhere else it can that is perceived to not be dropping as fast.
So maybe stocking up on currency perceived as stable? And yeah back to gold not being done yet?
Are there ways to short long term corporate bonds?
Own housing rental properties without a mortgage or locked in long term? No one will be buying new homes at those mortgage rates so rental demand goes up and up.
I’ve heard sensible fatcats suggesting the big plan is to bankrupt the middle & lower-upper classes, buy the USA’s housing stock out of bankruptcy for a nickel on the dollar, then make everyone a renter strangled by their landlord.
Like many other middle income countries already are.
Not sure I believe it, but it has an air of plausibility in light of the last decade’s changes in the national housing market.
If there’s a thing that I think Trump might understand at least a bit of, it’s the real estate market.
I was thinking about capitalizing specifically on the international flight from US debt and the effect that will have on interest rates to see if that could be capitalized on. Because I think that will be the most dramatic and immediate effect of potentially having Powell fired. Chat GPT says that there are a few ways you can take advantage of that such as shorting treasury futures, buying inverse Bond ETFs, and even interest rate swaps where you trade someone else a fixed interest rate and return and get a variable rate based on some sort of treasury rate. I’m reading up on all these things but I thought I’d ask him this thread if anyone were familiar with any of that our had other ideas. The interest swap sounds interesting but probably too complex of financial instrument for me to be messing around with. The treasury futures and maybe a put on them seems much more accessible but I have to learn about trading futures.
In other news the theoretical day of reckoning for Tesla is Tuesday but I no longer have confidence that it’s going to be as pivotal as I thought it was. If the news is bad and it will be of course and nothing significant happens to the stop then I don’t know what to do with the centerpiece of my current position which is shorting Tesla. I mentioned a few posts together that I think that the performance of any particular stock is barely significant compared to the chaos of the overall market and I think that’s what’s going on essentially soften the blow for Tesla’s earnings report.
I’m also concerned about the Musk-Trump connection specifically. Elon hasn’t been doing many many appearances in his capacity of Doge and I don’t know if that means that he’s falling out of favor with Trump. If he has significant control of her Trump still then I could see if Tesla stock did start falling that Musk would influence Trump to to make some sort of market shaking announcement that proppedup the whole market and basically make everyone forget the Tesla bad news and the wash. Sort of like the White House car sales stunt from a few months ago except you know plump and dump the entire market for trillions to do a favor for his buddy Elon.
I was fairly confident about the test learning days a few weeks ago but the greater chaos and Trump factors going on and I don’t know if anything that makes sense can happen at this point.
Edit: some of my recent posts have been voice dictated when I don’t have a keyboard which is why it sounds a bit funny sometimes. I realized that came up with the gem plump and dump which was unintentional but I’m going to keep it as is.
So you want to place a bet that Trump will successfully get rid of Powell resulting in international flight from US debt substantially over what is already in progress.
Yeah if those things ChatGTP say exist do, then they’d be ways to that that.
What do you see as the likely return on your bet if it happens? What is your likely loss if it does not? What is the worst case loss? What do you think is the current odds of Powell being replaced soon happening?
I say don’t listen to Chat’s hallucinations. Think for yourself and stand by your conclusions. What will happen if Powell gets fired? Will the US$ rise or fall relative to the €uro, the Yen and/or the Swiss Franc? Will US banks rise or fall? I know what I think, even if Powell is not fired, but I am not an financial adviser.
And, as I have repeatedly written in this thread, there are powerful interests at play, and people who are used to cheating and getting away with it. Those are despicable people but formidable adversaries.
They are. The ChatGPT is for possible ways to act on their conclusions. Which would need to be verified and investigated. If action is deemed the choice.
These are indeed the correct questions to ask in terms of trying to figure out if it’s a good bet or not, and I haven’t had time in recent days to calculate the numbers of how something like shorting bond ETFs or getting treasury futures option contracts would translate in terms of percentage of treasury yield change to investment dollar return. But this is a good situation for calls and puts – you’re set up to profit highly off of an event that others may view as improbable but your cost/loss is fixed, the worst case scenario is that you lose your premium.
That said, I think the possibility of Powell being fired - and there is really no way to quantify this sort of thing, you just have to use your own experience and knowledge of the factors at play and make your best guess – but I think there’s at least a 1/3rd chance it happens over the next 2 months. Would it be ilegal and out of Trump’s power? Sure. But so is everything else he’s doing with minimal to zero resistance. This is exactly the sort of law/norm Trump is breaking on a daily basis and not stopped despite every rational and legal reason saying it should be stopped.
There are also scenarios where the bond yields will have to go up that are various degrees of likeliness to happen. They’ll almost certainly have to go up modestly simply because US debt is now less secure and stable and investors are going to want a bigger payoff to what used to be an almost risk free loan. The risk of what seems to be a deliberate campaign to lower the US dollar I believe would make locking your investment money into US dollars unappealing, right?
One of the major moves China has available to it in the trade war is to start dumping US debt onto the market. I’m not sure I have a good grasp on the effect this will have. On one hand, it will lower faith in US debt having one for the biggest debt players in the world tell the world it’s no longer a good investment. That will likely drive up yields. On the other hand, flooding the market with US T-bills … this is where I don’t have a good grasp. In general, the availability of more increases supply and lowers value, and yield, as a general rule, is inversely proportional to bond price, but it could get complicated on the scale of something like China bond dumping. I’m not sure I fully grasp that, but it seems to me that it will forced the increased yield of new treasury notes, if for no other reason that they’re competing with T-bills available on the secondary market.
So it doesn’t even necessarily require firing Powell to see significant movements on treasury yields-- that would be an “oh shit” market wrecking moment, which does give upside to something like a investing against treasury futures.
These are complex forces that I don’t understand very well, which is why I wouldn’t invest a significant portion of my portfolio on it. But something like a put on US treasury futures or a bond index to the tune of 2% of my portfolio? I’ll be looking at prices today and trying to figure out where the break-even point is in terms of how much t-bill yield would have to change.
The things that really trip me up are monetary and currency issues. If the USD falls, which seems to be the goal of the current administration, then it can give the appearance of stocks rallying. I might miss a put where, for example, the actual value of the underlying fell, but because the USD also fell, it masks some of the fall of the stock by slowing down the rate of price decrease because you need more USD to buy each share of stock. In that case, the decrease in value of USD has the same effect as an increase in purchase price of the stock as the ratios of asset to dollars change but for different reasons. If we can crash the USD faster than the stock market (unlikely but we’re living in wild times) then it falsely gives the appearance that the stock market is actually going up. I don’t even know how to account for that.
I would really like to find a financial forum where they’re discussing stuff like this. I go on the reddit stuff sometimes and something like 1-2% of the information you find there is valuable, but even on the more serious market subs there’s a lot of stupid memeing that does not convey any useful information. So I’ve mostly trying to piece my understanding together from explanatory websites (like investopedia) that are relatively elementary.
A couple of hour ago Trump tweeted that the golden rule is that he who has the gold makes the rules. So not only is that insanely and openly corrupt, but there have been some issues in recent times with the US storing much of the gold reserves from other countries and while it’s hard to interpret the insanity that is a Trump tweet, I think that might be a sort of attempt at extortion with an implied threat to seize or otherwise damage the gold we store for other countries here.
What that would actually do to gold prices as an investor… I have no idea. But there’s your hourly dose of insanity.
If only the doses were only hourly …
The Federal Reserve Bank of New York holds gold for the US government, other governments and some NGOs. Seizing that would be, as you said, insane. But it’s not even worth it. A Google search suggests all of that gold (ours and others) is worth something like $200 billion. That’s a lot but hardly worth destroying whatever trust remains between other governments and ours.
And now markets are tanking again.
And Trump doesn’t even understand that the Fed Chair doesn’t lower rates. It’s by VOTE of the FOMC.
This has to be malicious.
I’d be willing to bet that Trump has no idea about this.
Wouldn’t put it past him to try to mandate a return to the gold standard.
After all, those were the days when America was great, weren’t they?
For those of you that have enjoyed my saga of randomly making moves I barely understand and getting hit with a 51k loss in one day, my portfolio is up 25% in less than the 2 months I left all my long positions in the US market. And I’m set up well to capitalize on Tesla earnings tomorrow if the stock tanks with 6 separate puts involving about 25 contracts at various prices at various points in the next month. Though with Tesla I’m expecting some sort of surprise with a stupid market following Elon’s bullshit.
So it may be something like earnings are down 60%, future earning projections are way down, but Elon says he’s working for Tesla full time again (which would actually be bad for the company) and the stock to surge anyway. One of the reason I put my puts in the early May range is because I expect some sort of gimmick to prop the stock up in the immediate aftermath of earnings but within a couple of weeks it’ll come back to Earth and the damage will be recognized.
Or… Elon announces anime sex robot waifus by the end of the year and the stock goes back up to $500.
After a couple of months of never being able to figure out how much cash or margin I have on hand, I’m apparently sitting on about 30k of cash now. I kind of want to put into inverse Tesla 3x (TSLZ) but I’m too afraid of the paradoxical reaction to terrible Telsa news causing the stock to rise. I think I may wait for a short term rise lasting until the next Monday and then buying more TSLZ a week from today.
Gold prices are still surging, up 3% today. Out of context, you might say it’s overpriced, but it has the potential to soar as this disaster unfolds.
Out of curiosity, I just did a comparison of our net liquid worth from its maximum about 4 months ago vs today. Turns out we’re down about 5.6%. We do also have some real estate assets, but I didn’t include those in the calculations. Of course, I’m not going to disclose actual numbers… 
So I feel somewhat vindicated in the moves I’ve made over the last 3 years to move assets into less volatile or risky instruments.
Overall: not panicing yet and staying with a holding pattern.
But who knows what bullshit the orange fool has yet to pull…?
The DXY US dollar index has apparently had its fastest drop on record since 1974. That’s especially scary is that it’s covering a lot of the fall of the stock market – if the value of the dollar drops, prices on stocks go up as the asset to dollar ratio gets higher. So for the dollar to be dropping while stocks drop means that the dollar dropping is actually masking much of the decline. Their ratio stays closer because they’re both falling.
Which means just… Disaster. Disaster in everything. Disaster in the dollar, the value of bonds, the yields of bonds, the price of equities, everything is falling apart. Us supply chains, employment, high debt servicing costs, world boycotting US products, erasing decades of soft power – I could go on for several paragraphs just listing the ways we are fucking ourselves over.
We were way out in first place and we launched as many blue shells as we could.
I’m probably trying to stick my fingers in too many pies, but it’s because there are so many things falling apart right now I’m trying to reduce the damage they’ll all do to me.
What would you guys do to escape the falling value of the dollar? Gold? Foreign currencies? Currency futures?