Not sure we want to replicate Japan’s story.
I found the following trying to understand story more broadly (US vs Japan debt). It’s not something I’ve thought a lot about honestly.
Interesting graph.
Few observations…
First 1/3 shows really wild swings. Different era, US emerged from WWII as lone intact country.
Overall, graph shows downward trend for the entire period. That just “feels” wrong to me.
And yet, we have matched our lowest point in unemployment since 1950, even with this rather
dramatic looking negative slope graph.
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Question: if some astroid’s gold is retrieved/collected, and it is distributed to every human being on the planet …and we then each suddenly have a mountain of gold…
Does that actually make us all richer (as I think was implied)?
I guess my naive view is that it just drops the value of gold to the value of sand or ocean water. But maybe I’m misunderstanding the thought there.
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Nope, that’s my take on it too. We attach value to scarcity.
A billion tons of mineral Y shows up, it’s worthless.
About 244,000 metric tons of gold has been discovered to date (187,000 metric tons historically produced plus current underground reserves of 57,000 metric tons). Most of that gold has come from just three countries: China, Australia, and South Africa. The United States ranked fourth in gold production in 2016.
All of the gold discovered thus far would fit in a cube that is 23 meters wide on every side.
How much gold has been found in the world? | U.S. Geological Survey.
As with Goldilocks, you can’t pick an asteroid too small or too big.
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Ok good. I’m not alone there.
Of course we are likely all aware that gold has some unique - or at least desireable - properties (especially for electronic implementations). So maybe not truly “worthless” in every sense of the word. But practically worthless in traditional trade value.
No thought to be missed you’re I think focus on the wrong thing, how everyone can become rich because of that asteroid, l ( by the way precious metals have a placeand value in our civilization regardless of the quadrillion dollars of it there in space, because our industrial base needs them, when they start mining it and make no mistake there companies in the planning stages to do exactly that) that not the gist of the spirit of my post, my post is to say there plenty of abundance for all in this universe for everyone by God the force or whatever you wish to call it. If don’t believe in higher power than it just plenty. We are on the cusp of technological revolution that will change life for hopefully for the better and create a more abundant and prosperous world for all, hopefully. God made enough for everyone needs, not enough for everyone’s greed. I don’t operate from a place of fear or scarcity but one of believing there is enough for for everyone need.
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No doubt, gold and silver have some nice intrinsic physical properties that are great for electronics.
I dunno but that would put a heck of a lot of leprechauns out of business. The cereal industry alone is not enough to support them.
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Kids, the population of Western countries is falling below replacement. Businesses will need to have a different strategy as markets shrink. None of us knows how it plays out.
Walgreens -88% off its all-time high
Back in the 80s-90s I worked in investments at TCB/Chase — Walgreens (or Eckerds) was a core holding in most every Trust Dept. stock portfolio.
I estimate it grew 25% annualized from end-March '84 to end-October '00.
Change is the only constant…
(monthly chart, click to embiggen)
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Back to our original topic — problems in China
The foreign investors left stranded in Evergrande’s web of Chinese debt (Financial Times, paywall)
Snip —
The foreign flows were not Evergrande’s only source of financing, but they helped to kick-start presales payments from homebuyers like Yang, which could then be invested elsewhere.
It was a “fee machine”, the investor adds; fees from the pre-IPO bonds, the IPO itself, and then high-yield bond issues after that.
The developer’s presence in Hong Kong, meanwhile, “gave it the veneer of ‘you’re covered by Hong Kong law and it looks like a normal bond’.” But in his view, that was “an illusion”. He adds: “They were always going to be the part that didn’t get paid.”
Just curious Steve, what are investor loss numbers now being thrown around concerning Evergrande in that article ? And while thinking about it, what are the latest investor loss numbers being talked about now for western CRE investments? Fyi, not trying to compare the 2 events,
they are different animals in different systems, but just curious how things stand in the world wide
real estate markets.
Investors haven’t gotten coupons or principal back
Some investors spoke on condition of anonymity, including one investor at a major international firm. “It will be a very, very low price, like 0.0 something, depending on the market price of that day,” the investor says of the firm’s “legacy exposure” to Evergrande. “Over the past two years we have de-risked the sector significantly, but of course we cannot 100 per cent exit.”
More good news on inflation.
Inflation falls 0.1% in June from prior month, helping case for lower rates
So when the Fed starts cutting rates, will we see a surge in the stocks as investors
flee low fixed instruments?
Time to buy pre cuts ? Or more hunkering down for the economic doomsday crowd ?
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Been in Bull Market since Oct 2022 look at the chart, just going get stronger.
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55% increase for the S&P500…about 20% annually. Not too shabby. If you go from the start of this thread when the S&P was higher than Oct (June 2022, at about 3900) it’s still a 45% / about 14% annualized. Over last 20 years S&P does 10.1% so its been pretty good.
LOL…That first link aged so poorly they deleted it from their website. In fact, it’s completely off the internet except maybe the ‘wayback’ archives (I did not check).
On the Evergrande scandal, these institutional investors weren’t naive. What were they thinking? Seems like this shouldn’t ever happen.
My 2 cents — they were probably chasing high yields and downplayed credit risk.
I’m guessing kickbacks.