[theabstractmind]

Originally Posted by DigitalOne

Wrong conclusion drawn on the basis of limited data.

How many of these poor and homeless became such after (or because of) California becoming rich? In other words, were they well off earlier?

Second, how many of these seeing California's success, got attracted towards it, and migrated from other parts of US, (but now CA's economy is not able to fulfill their aspirations)? We see this intra-country migration in India also, where people from North and East migrate towards West or South. That doesn't mean poverty is being created.

It may not be completely relevant, but the concept of urban poor is a real one. Many of these migrants come to urban cities with the hope of making it big. They end up living in conditions which is possibly worse than their owned hut in their hometown. They end up in the same vicious circle of trying to make ends meet - paying surreal rents, staying in congested rooms with minimal sanitation, eating food of a quality which is possibly worse than the food they grew back home. The bling and hope doesn't allow many of those to go back. That's exactly why you see lower strata areas coming up in every city. Urban slums, if you may call them so.

Some may prefer the vicious circle of the urban poverty than the uncertainty of agriculture, for example. Yet, it just shifts the poverty from one place to another, if not create, unless those migrants are educated and land up in a good white collar job.

[Samurai]

Originally Posted by DigitalOne

Wrong conclusion drawn on the basis of limited data.

How many of these poor and homeless became such after (or because of) California becoming rich? In other words, were they well off earlier?

I think you are underestimating how easily one can become homeless in USA. I have lived nearly a decade in USA, therefore can fill in the blanks. Plenty of folks don't have any savings and live paycheck to paycheck. It is well known that lower 10% Americans can't handle an emergency that costs $400. If you miss your mortgage payment for 4 months due to job loss, your house will be foreclosed, leaving you homeless. Don't forget plenty of them have student loans that can't be gotten rid off even via bankruptcy. It is not uncommon for white collar workers to become homeless in USA.

Here is a journalist telling how she is close to become homeless, this was last week:

It takes only small mistake to get here. Time was, for many years I had a very nice and affordable apartment in Sheridan, WY which is to the Cheyenne what Rapid City is to the Sioux – nearest city to the Rez. But then, I went to Rapid City for what turned out to be a brief tour with Native Sun News. Went broke from costs of moving, getting a new pad in Rapid etc.. Then of all darn things I broke my leg, at that time not capable of living alone until it healed. Had to come back home. Because I skated before my one-year lease was over, lost the pricey deposit.

It only took six weeks to get over the broken leg – physically I’m just fine now. However, what is not just fine is finding another rental. Prices have sky-rocketed in Sheridan, WY, the average rental for a one-bedroom apartment ranging about one thousand monthly, plus utilities. While I could afford that it would then be slim margin on social security to eat for the rest of the month.

It is not the top 10% who are becoming homeless. But the bottom 50% are always in that danger.

https://www.nytimes.com/2020/01/22/u...e-stories.html

[laser2707]

The prevailing ecosystem of VC's, media, analysts and now disappointingly enough - Government authorities have fuelled this hype.

Our financial media is filled with news items on Unicorns being born everyday. I am old school and have spent my career building brands and launching products. I speak with total humility that businesses cannot be built by running incessant ads on Youtube and Facebook.

Getting customers is challenging enough, more challenging is fulfilling them and far more challenging is earning their loyalty. I have seen and run the full circle and can say with reasonable assurance that these Unicorns will flame out like Ola scooters.

What disappoints me is that even Government spokespersons tout how many Unicorns have sprung up in India. IMHO this is hardly anything to be proud of. They should instead be talking about nurturing the SME sector. In a developing country like ours that's where true economic development lies.

My two cents...

[Samurai]

A different POV on Economics... jump directly to 5:45 position to skip Arnab.

https://www.youtube.com/watch?v=xhD-WpvFHIE

[Samurai]

Originally Posted by dragracer567

About the meme, 'conservatives' in the US have gone from fiscal conservatism and traditional family values to questioning a free and fair election & white-washing an insurrection that mirrored a coup.

You are describing the extreme right, the MAGA crowd. Liz Cheney, Adam Kinzinger, Mitt Romney are examples of conservatives. Cheney and Kinzinger went all out investigating MAGA insurrectionists.

Originally Posted by dragonfire

Socialism was a hated word in America a decade ago, but Bernie and his gang has managed to sell the utopian dream wrapped in an oxymoron - democratic socialism.

I think you are really confusing democratic socialism with something else. Bernie Sanders clearly laid out what is means, way back in 2006. I had quoted it last year in the economics thread. It just means what democracy should be. Not what communism claimed it to be.

In fact, democratic capitalism is the recent name for it.

[Imran.Syed]

Just came across an interesting (to put it mildly) youtube video:

https://www.youtube.com/watch?v=fLGMxH9KFa8

Cross checked with some Googling to see if this isn't just another man beating his chest about a conspiracy theory
https://www.investopedia.com/80-tril...corded-6836151

Turns out the news is actually true, but I do not know how to make sense of the seriousness of it. SmartCat and other members, can you chime in please?

Seems like a major black swan moment.

[carboy]

Originally Posted by Imran.Syed

... Re Black Swan in 2023 ...

The definition of a Black Swan is that it's not predicted by anyone till after it happens & after it happens, it's pretty obvious that it would have happened.

So if someone has predicted a Black Swan event which is going to happen, then by definition, it's not a Black Swan event.

[SmartCat]

Originally Posted by Imran.Syed

Turns out the news is actually true, but I do not know how to make sense of the seriousness of it. SmartCat and other members, can you chime in please? Seems like a major black swan moment.

To be honest, all this stuff goes over my head. I'm moving your post to this thread. Perhaps others might be able to chime in.

But if we just look at history, there is a major financial or economic or geopolitical crisis atleast once a decade. In hindsight, each crisis (including 2020 covid outbreak) can be classified as a black swan event.

Diversification across asset classes is the only solution to this problem - not predicting what is likely to be the next black swan event. Whenever there is a crisis, Gold & govt security bonds (Gilt mutual funds) will always go UP in value. So best to allocate a some percentage of your networth to these assets.

Another idea would be to hedge your portfolio by buying NIFTY put options of December on 1st January of each year. For eg: if your equity portfolio is Rs. 1 cr, buy 10 lots December 2023 15000 PE (20% away from where we are). You will have to spend around Rs. 70k for buying put options or 0.7% of your equity portfolio value. Think of this as a black swan insurance policy.

[Linuskm]

Originally Posted by Imran.Syed

Just came across an interesting (to put it mildly) Youtube video:
https://www.Youtube.com/watch?v=fLGMxH9KFa8

They have been talking about this since 2008 crisis, at the most private hedge companies and investors will have to take the hit. Banks have learnt their lessons with Lehman and bearn Stern's collapse,so should be immune to such events.

Originally Posted by thirugata

If anyone owns M&M watchout for this. A classic topping out pattern playing out here.

Attachment 2366495

PE is around 17 and price is about 3 times book value. I think it is ok, if the price movement is supported by momentum would still be a buy in my opinion

[RJK]

Originally Posted by Imran.Syed

Just came across an interesting (to put it mildly) Youtube video:
https://www.Youtube.com/watch?v=fLGMxH9KFa8

Cross checked with some Googling to see if this isn't just another man beating his chest about a conspiracy theory
https://www.investopedia.com/80-tril...corded-6836151

Turns out the news is actually true, but I do not know how to make sense of the seriousness of it. SmartCat and other members, can you chime in please?

Seems like a major black swan moment.

I saw the video 2 times and still have not understood how the loan of USD 10M & Eur 10M (that he takes as examples) remains off the balance sheet. I mean what kind of accounting jugglery is this? In Accounting standards, aren’t loan shown as assets even though they’re a liability (headaches)?

Can someone pls help me understand? Rest of the skulduggery I can understand.

Cheers

[anandhsub]

Originally Posted by RJK

I saw the video 2 times and still have not understood how the loan of USD 10M & Eur 10M (that he takes as examples) remains off the balance sheet.

Cheers

The euro loan is on the balance sheet. It is the fx swap to convert to a usd loan that won't be on any balance sheet although they need to report it to regulators on an yearly basis. Most global banks find it cheaper to borrow in their parent currency. However given how big the US economy is and more importantly how the USD is a reserve currency a large chunk of their assets are denominated in USDs. Hence they borrow in their home currencies and convert via fx swaps to a usd loan which is much cheaper than borrowing directly in USDs.

For eg. If I go a foreign bank in the US, say Barclay's, for a home loan then they would rather borrow that money in the UK in GBPs and convert it to USDs via fx swaps and then lend it to me.

As such most of YouTube finance stuff is just fearmongering.

The number that gets reported is a gross number, and is far overstated vs the net borrowing that a bank does via fx swaps. For eg if I have both euro and Usd borrowings then I can participate in the fx swap market on both sides ( which is what JP Morgan does) and both numbers will get added to the reported fx swaps number although I am actually not doing any borrowing via fx swaps.

Compared to 2008, given the amount of regulations banks have to abide by, it is very hard for the big banks to hide bad lending/borrowing.

[carboy]

Originally Posted by SmartCat

But if we just look at history, there is a major financial or economic or geopolitical crisis atleast once a decade. In hindsight, each crisis (including 2020 covid outbreak) can be classified as a black swan event.

The COVID pandemic cannot be called a Black Swan event. Taleb who coined the term "Black Swan" himself said that it's not a BS event -

https://www.youtube.com/watch?v=kANQLqacbyg

There have been many similar pandemics before - the only difference is it spread faster across the world than earlier pandemics because of much increased connectivity now. And Taleb himself in one of his books had said that the next pandemic will spread across the world faster than the earlier ones.

https://www.forbes.com/sites/johndra...ck-swan-event/

From the article

According to Nassim Nicholas Taleb, a “Black Swan” event has three properties:

• It is an outlier and nothing in the past suggests its possibility.
• It carries an extreme impact.
• Finally, despite being an outlier, after-the-fact explanations make the event appear explainable and predictable.

It seems many people think that the global Covid-19 pandemic is a Black Swan event. It’s not.

[Imran.Syed]

Originally Posted by SmartCat

To be honest, all this stuff goes over my head. I'm moving your post to this thread. Perhaps others might be able to chime in.

But if we just look at history, there is a major financial or economic or geopolitical crisis atleast once a decade. In hindsight, each crisis (including 2020 covid outbreak) can be classified as a black swan event.

Diversification across asset classes is the only solution to this problem - not predicting what is likely to be the next black swan event. Whenever there is a crisis, Gold & govt security bonds (Gilt mutual funds) will always go UP in value. So best to allocate a some percentage of your networth to these assets.

Another idea would be to hedge your portfolio by buying NIFTY put options of December on 1st January of each year. For eg: if your equity portfolio is Rs. 1 cr, buy 10 lots December 2023 15000 PE (20% away from where we are). You will have to spend around Rs. 70k for buying put options or 0.7% of your equity portfolio value. Think of this as a black swan insurance policy.

This is my basic investment strategy and I developed it using your posts on various related threads.
Rs 70k for put options is dirt cheap insurance for protecting a portfolio of 1cr. Thank you

Originally Posted by anandhsub

As such most of YouTube finance stuff is just fearmongering.

Thank you for the brief explanation. My basic takeaway from it is that this is just fearmongering then.

Originally Posted by carboy

The COVID pandemic cannot be called a Black Swan event. Taleb who coined the term "Black Swan" himself said that it's not a BS event - https://www.Youtube.com/watch?v=kANQLqacbyg

There have been many similar pandemics before - the only difference is it spread faster across the world than earlier pandemics because of much increased connectivity now. And Taleb himself in one of his books had said that the next pandemic will spread across the world faster than the earlier ones.

https://www.forbes.com/sites/johndra...ck-swan-event/

From the article

This is something I too have debated within my head. I did not know Taleb was the one who coined the term but the March 2020 crash felt like a knee jerk reaction. I also still do not think we have had this decade's BS event, but that is just my personal opinion I formed based on my uneducated intuition.

I do not worry much about BS events though. If they happen, they bring with them great investment opportunities.

[carboy]

Originally Posted by Imran.Syed

the March 2020 crash felt like a knee jerk reaction.

I don't agree. The crash was very logical. Why it reversed quickly was because US highly accelerated the pace of Quantitative Easing because of COVID lockdowns. If not for that, the market would have been in the dumps for much longer. But the accelerated Easing caused inflation.Hence in November 2021, US announced that they will stop Quantitative Easing & will start Tightening instead so as to trigger a recession which will lower inflation. Because of this announcement about stopping Quantitative Easing, market started falling again from then till June 2022. After June 2022, the market felt that there will be a recession (because of the war) & Tightening. Recession means inflation will go down & hence from then on the market started becoming volatile - if market thinks economy is going to be bad (& hence Fed would stop Tightening), then market goes up for 2 weeks. Then, some other signal says economy may not go bad right away & hence the market goes down. The whole market since June has been based on predicting near term US monetary policy.

[crashnburn_in]

Originally Posted by Samurai

You are describing the extreme right, the MAGA crowd. Liz Cheney, Adam Kinzinger, Mitt Romney are examples of conservatives. Cheney and Kinzinger went all out investigating MAGA insurrectionists.

I think you are really confusing democratic socialism with something else. Bernie Sanders clearly laid out what is means, way back in 2006. I had quoted it last year in the economics thread. It just means what democracy should be. Not what communism claimed it to be.

In fact, democratic capitalism is the recent name for it.

Thats quite a rebranding. Do you think its going to get a lot more acceptance that way from the "enterprising" folks who are iffy about socialism/ communism and its now known, but quite known dangerous outcomes?