Credit markets look increasingly dangerous | Hacker News Reader

Credit markets look increasingly dangerous

economist.com

55 pointszerosizedweasle23 comments

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the money gets seriously devalued once these reserves get ditched https://reserves.n0us.top

The systemic risk:

"Fitch, a credit-rating firm, notes that the consequences of a potential slump have not just grown—they are also no longer constrained to giant investment outfits. Private-credit firms have marketed themselves to smaller investors, including retirement accounts. At the same time, banks and insurers have lent more to them."

https://archive.ph/buoAZ

More from:

https://www.msn.com/en-us/money/economy/the-credit-market-is...

"The overarching concern on Wall Street is that the exceptionally high valuations for corporate debt are concealing excesses in the market and insufficiently compensating investors for taking risks."

If you look at the reaction to the markets the last two days, it makes no sense, adn this is why. It is just investor insanity out there right now. Gold as well keep breaking record highs at the same time the stock market does. Again, makes no sense, unless you think the market is in a huge bubble.

I will bet there is a dump in bitcoin coming.

Moody's analysts are already warning of a “Growth Recession” based on corporate credit strain.

> Moody's forecast model for recession, which has had zero false positives, now predicts 49% probability of recession.

> Every time that particular model gets over 50 (50%) we've had a recession. And we've never had a false positive. Never has it risen above 50, and we've not gotten a recession.

https://www.moodys.com/web/en/us/insights/podcasts/inside-ec...

I wonder how big that 1% of wiggle room is. I wish I had some way to conceptualize this a little better. 49% sounds bad, but where do we typically sit? If it's 44%, I don't care nearly as much. If it's 5%, I'm freaking out a little bit, you know?

> Every time that particular model gets over 50 (50%) we've had a recession.

Isn't that a little broken? It says there's a 51% chance of it happening, and it always happens?

If it's an everything bubble, than it may not be a bubble, but a currency depreciation instead (not just $, but of all fiat currencies). Market participants openly expect a new round of bigger than ever money printing on the first serious signs of the R word (and BBB is just a precursor here).

Though, personally, I consider the AI trade to be currently deep in the overripe bubble territory.

When you fix everything around gold this becomes obvious. We’ve had silent hyper inflation of the reserve currency since covid. Wages are stagnant, the price of everything has gone up, assets and gold are still the same “value”

Trillion dollar companies, 100 billion+ club becoming crowded. All points in one direction. And it’s not a bubble that will pop, the citizens of the world will revolt.

Increases in the dollar to gold exchange rate don't necessarily correlate with dollar value decreased; they can also be gold value increases.

The alternative to a huge bubble is that it's ripple effects of inflation. All assets go up, RE, equities, btc, and gold/PMs because there's simply more money in circulation and so more ends up in investments of all categories.

Perhaps a little of each

Yes, is the tiny 25 bp decrease in the Fed Rate we just had partially responsible for this sudden uptick in equities? If so I think it marks a kind of desperation. If there is no where else to invest, like tresuries, they push it in every other market you can.

Or, do they know the job report that did not come out this week is horrible and this is the insider pump before the dump? The Shiller price-to-earnings ratio has climbed to 40.08. Insanity like .com bubble.

"If you look inside any large REIT in the U.S. today, somewhere between 10 and 22 percent is already directly data-center related." Even the safe investments have been infiltrated.

I’m already scared of REITs because of the overvalued commercial real estate.

Be greedy when other people are scared. Be scared when other people are greedy.

Bitcoin? Nah, the top 2% of holders are holding 90% of that market.

Watch out, the AI bullbots are coming to convince you that there is no bubble.

But my question is; what are the algos trading on? what data, what news?

crowd psychology and momentum

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