Joel

Male
from North Hollywood, CA

    • Joel

      Interest Rates & You: How You Are Going to Die

      1 day ago

      Writing this while really drunk so, stick with me. Ok, interest rates aren't going to kill (probably). They might be more likely to kill those in emerging markets, but whatever. I've spent some time talking about why (despite the entire worlds belief to the contrary) that the Fed can't raise rates in Sept (or maybe ever) without causing some massive, massive problems. (I won't even go into the equity markets here, maybe later)

      What 'interest rate' am I talking about? Think about interest rates like layer of an onion. Or layers of some 7 layer dip. Whatever, let's just make it some food product because I'm currently hungry. At the core of this onion (delicious onion) is the 'overnight' rate. This is the rate (that the Fed sets) for which banks loan $$$ to each other. (Like the US version of the LIBOR) ...(Don't know what the LIBOR is? It's England's version of our overnight rate, and your US adjustable rate mortgage moves off the LIBOR. Don't believe me, go through your mortgage, you'll see it in there. Ok, whatever.

      You don't have digest to full implications of the 'banks loaning each other money' part right now. What is important, is that every other rate, trades off this overnight rate. What other rates? The US government issues debt denominated paper going out on the curve. So, like, there's a 2-year treasury - you give the US government your money and they give you a piece of paper where at the end of 2 years they pay you back your principle investment along with the interest rate promised. Make sense? They go out in duration like that 2 year, 5 year, 10 year, 30 year... you get it. Each one of these pieces of paper trade with different interest rates, but everything trades off the overnight rate. Also your credit card, new mortgages, all debt insturments look to, & move off the overnight rate. There's lots of implications here (I.E. Hey, won't a higher interest rate for a home loan make purchasing a house even harder? Yes.) Anyway let's not get into that right now, because I'm thinking about 7 layer dip for some reason, and we still have more to go on this.

      Interest rates are the price of money.

      What happens when you can't pay back your debt? You get into trouble. What happens if a government can't pay back its debt? It changes the inputs on the equation; it starts attacking the terms of what 'debt' means. Can't pay back 'X' amount of dollars? Just go ahead and change the definition of what a dollar means.

      Hey! This goes back to that "Currency War" thing I was talking about! Remember that journal!?!

      Ok, in that journal, remember, every country is trying to devalue against one another in an attempt to create inflation. How does "inflation" play into what I'm talking about? Go back a paragraph and re-read that 'change the equation' sentence. They want to inflate away the value of their currency, so they can service their debt. (Make paying it back easier) Because we've finally gotten to a point where servicing global debt is impossible. (Want to have some fun? Look up some debt/GDP ratios. you'll notice everybody over 100% now)

      Ok, let's try to tie this all together, because I'm only getting drunker as I write this.

      The Fed's own mandate (to help the recovery) is to create inflation (and we're not getting it). China, de-pegged recently (see currency war journal) along with the rest of the fucking world leaving the US dollar standing there with its pants down. The dollar has been gaining strength (like crazy) because everyone thinks the US is going to hike (raise the overnight rate in Sept). (Sentiment was higher before the market volatility last week) INDEED, I can tell you the catalyst for the stock market meltdown was the release of the Fed papers, perceived by the market as a Fed talking hike in sept..anyway. Crazy how all this stuff fits together, huh?

      Anyway, remember, in a currency war the goal is to kill your own currency. Raising rates would be incredibly deflationary. This, indeed, flies in the face of the Fed's own stated goal of trying to create INFLATION. With the dollar strength (remember, dollar strength = really deflationary) at the top of the trading band, to get an actual rate hike would send the dollar through the roof. The Fed CANNOT have this. The last thing the Fed needs (in it's losing battle to create inflation) is an epic wave of deflation coming from an epically strong dollar.

      Anyway, there was actually a whole bunch of other stuff that goes into this, but I think this should make some sense to you, and also don't want to write 30 more pages, I can do it later. Hope some of this is starting to make sense?

      Anyway, if you're really starting to connect some dots at this point, you might be able to start to see how gold fits into this global picture. Anyway, there's a lot more.

      <3, Joel

    • Joel

      The Stock Market Doesn't Matter

      4 days ago

      Been sort of active lately coming out and talking about equity markets. Indeed, (As we've seen some rallies this week) I think it is worth coming out and saying: we could be looking at a potentially epic crash in the coming weeks. Possibly no later than October. (Why things always go berserk in the fall, I have no idea.) If you're into moving averages we've seen three 'death crosses' over the past couple of weeks. (50 day moving average crossing over 100, 200, and now threatening 300) There are no guarantees, but with the Fed threatening to move (I don't think it will happen) and their annual meeting coming up in Jackson Hole, there is a lot to be aware of.

      I talk a lot (too much) about the equity markets, because everyone has an idea or picture of what that means. Everybody has an understanding of what the DOW is, and what point movements mean. Indeed 'it' (DOW, S&P 500, NASDAQ) are a pretty good forward indicator of what we should see in the overall economy, and, hey, it's fun to speculate on, but it's not what is important.

      When you compare the amount of money in the equity markets to the bond markets, it's nothing. 'A flee on the tail of the dog' is how people usually describe it. Indeed the real bubble, the biggest of all time, is the US Bond market. Is there a bubble is US equities? Yes, but, it lays on top of the a massive US bond bubble. So what you really need to keep an eye is the bond markets. If we see a break down there, then things will get really interesting.

      There are some really good arguments to be made for our markets going a lot higher (still while everything else melts down globally) so there is a lot to consider. Traditionally, the world rushes to the dollar, US treasuries, and our markets in general when global slowdowns occur. We'll see if that becomes the case here. There are a lot of moving pieces with a potential US rate hike, Chinese equity weakness, and a global currency war raging.

      In any case, looks like the global markets are finally getting the idea of 'growth slowing' (global depression) and that central banks, (despite their best efforts of devaluation) AIN'T able to help.

      Anyway, think there are 4 clear ways this all breaks: the Peter Schiff direction (central banks win; inflation), the Harry Dent direction (central banks lose), the Martin Armstrong direction (outside-in, EM slaughter), or Jim Rickards (he's acknowledges all the paths, and is trying to be flexible in timing.)

      Anyway, just wanted to ramble some stuff out today.

      <3, Joel


    • Joel

      -1000 point Dow intra day drop sets record

      6 days ago

      That wasn't hard to see coming, was it? Dow recovered some 400 points (plunge protection team) but still lost almost 600 on the day. The 1929 market didn't bottom till 33. China still has tons of tools to fight this, so we're going to see increased chop & Vol. Indeed, the VIX has been setting records. What is most interesting is we're not seeing the usual flight-to-safety trade into bonds. This could be China selling to counter act their own market troubles. Model after model says that before a massive systemic event we'll see massive deflation and dollar strength. We've been getting both in spades for months now, think we still have further to go there. So many crazy things happened over the past 48 hours that I have a hard time keeping up. Anyway, cheers.

    • Joel

      Duh.

      1 week ago

      Suze Orman & Jim Cramer are now pleading with the fed not to raise rates in September. Their call mimics the IMFs note not to raise rates made a couple months ago. If the Fed raises rates (in Sept, Dec, or whenever) you will see a market crash that will see no bottom. Once they lose control, it will be hard to regain it. Like to think I was ahead of the curve on this as I pinned a tweet on the 17th. Sure enough, on the 19th the markets started to call out the Fed (after the release of the Fed notes) and we've seen some major moves down.

      This isn't hard to figure out: the fed will blink, like they always do, and will hold rates steady at zero, and maybe the market continues its blind march forward. If the fed is crazy enough to try raising (even .25) in mid september, all bets are off. The Fed is already in a box and having to cut right after raising would probably crash the bond market. We will immediately re-enter recession, and it will become apparent to even the slowest of money managers that the ship is sinking with no reversal. (Funny to think, even without China, Greece, etc etc Atlanta Fed project 0.7 growth for next quarter) That wasn't hard to figure out either.

      The thing is, is that this pattern has repeated & repeated, and maybe, finally, the market is starting to figure it out.

      And that's what's truly concerning: maybe, right now, markets are finally getting it. Maybe, finally, markets are pricing the idea that there is no exit from ZIRP. Ever. Every time Fed tries to take a stand the market throws a tantrum. We now live in a world were rounds of QE replace what used to be rate hikes. It is hard to believe it's taken 7 years and 3 rounds of QE & people still can't figure this out. Amazing. What's the old saying? Markets can remain irrational longer than you can stay solvent?

      Right now the Fed is playing a game of chicken with the markets, Fed talks tough but in a severe enough market downturn (like the one we should see coming) the Fed will cart out an official with a dovish statement to try and quell markets, like Bullard did earlier this year (Ha, we almost saw one Friday). If that fails they will try and float a mention of QE4, probably through Hilsenrath. Regardless, as the economy continues to slow, we're going to get a mention of QE4 (probably open-ended) at some point, followed by its executed. (Q3 of 2016 at the latest unless we get a meltdown this week) But again, what if that fails?

      So here we are. Markets will continue to go down till the Fed says, or does something, then, hopefully, the markets react. But what if they don't? What if we're finally here? Then what? All eyes should turn to the bond market, then we go super nova.

      What makes this so tricky, is that anyone of these steps, could take seconds, or years. (at this point, probably not years.) But that is the progression.

      Anyway, there is money to be made, leaning off sediment. Last week literally THE ENTIRE WORLD (thus my tweet: go me) thought we were going to get a rate hike in Sept. Now, not so much.

      Sorry for the rambling, but thought this would make a funny story.

    • Joel

      Boring Run On Sentence. Noted 08/14/15

      2 weeks ago

      Since 2010 the world has been locked into a global currency war. What's a currency war? It's when central banks race to devalue their currency. The object is to kill your own currency. Why do they do this? Many say they do it to help their exports, but the real reason is to battle deflation by trying to create inflation. (You can't tax deflation) Everyone is racing to devalue their currency vs everyone else. This is something that has been played out historically many times. Indeed we've seen a global collapse in yields world wide, led by US (The Fed), that has even led some central banks (Germany, Switzerland) to even go negative. What's 'negative'? You know how a government bond pays you interest? You give them $100 and and over time you get 102 back. $100 plus (let's say 2%) $2 for interest. When yields go negative the reverse happens; you give a government 100 and get back 98. Why would anyone lend out money to get less back? I know, right? Anyway, I digress, our 'overnight' rate has been at ZERO for more than 80 months. (This has never happened before. Indeed there are nine year olds walking around in playgrounds that have never seen a rate hike. Amazing.) 80 months at zero and The Fed is still not getting the inflation that it wants. The nature state of the global economy is massive deflation and central banks are throwing everything they have at it, and the tectonic plates are smashing together.

      Anyway, with China's record devaluation (from the band) we're now seeing the worlds second largest economy trying to de-peg from the dollar. The announced "one time" devaluation was followed, I kid you not, a night later, by another one. You have to love that. Pegs never can last anyway, as we recently saw with the Swiss and the Euro. Anyway we could see some interesting markets moves no later than mid sept of this year. Really interesting.

      <3, Joel

    • Joel

      I did it.

      10 months ago

      ...waited entire year until avatar relevant again.

    • Joel

      Long Journal is Long…& angry. (Danger Econ Stuff)

      1 year ago

      There was this amazing documentary I watch several years ago about borderline semi-novice mountain climbers paying a mountain guide company ($50K) to help them climb Mount Everest (Tallest mountain in the world.) The company would employ an army of sherpas to do everything from establishing the many base camps needed to laying every inch of guide rope so that the only work the client would have to do would be to hook themselves up to the guide ropes and place one foot in front of the other and transverse the mountain. (They didn't have to weigh themselves down with provisions, as the sherpa carried that task out for them.) There was one peak towards the top, that proved to be particularly tricky. No problem, the sherpas actually would place a ladder, (A LADDER) so that the 'climbers' wouldn't actually have to do any mountaineering. Despite this, 95% of the clientele would not make the summit.

      Why? Because it's Mount-fucking-Everst. The oxygen is so thin in "The Death Zone" that helicopters can't get enough lift to fly that high. If your body drops up there, it's there forever. A Chinese contingent sent a 30 man party to recover the body of ONE fallen climber from the year before. Despite the fact that the body hadn't even fallen towards the top they weren't able to recover anything, and lost men on the way back. In fact, once you're in "the Death Zone" (26000 ft) the oxygen level is so low it is considered insufficient to sustain human life. You're, in fact, 'on the clock' to get in and out as fast as possible as your body is indeed dying. There are so many mind boggling statistics/stories that underscore this point this journal can't hold them.

      So, I'm not going to lie. Why did I watch this show? I was always waiting for that one 'Ah-ha' moment when the 'semi-professional-mountain-climbing-rich-guy-reality-star' would, despite all his notions and talk, would come face to face with the hard reality that, despite the army of sherpas and catered meals, he was not going to make it up the mountain and, in fact, was probably going to lose that finger.

      So this journal entry is not about mountain climbers. Here's an interview from a Federal Reserve Banker talking about the economy:

      video.cnbc.com/gallery/?video=3000209830&...

      Despite all the data, despite YEARS of zero bound interest rates, despite all the forward guidance, despite all the QE, despite the Fed's 4 Trillion dollar balance sheet (and leveraged 80 to 1), and despite reality, another Fed official (Evans) still thinks it's possible to climb this mountain. ...even without a pair of legs. 'Yeah, seems like we STILL haven't recovered for some reason, ("weather?") but don't worry, I'm sure it's JUST around the next corner.'

      I watch these Fed officials like hawks. Not for reliable information, as they've proven over and over and over again that they are completely clueless, (see: CPI, consumer confidence, housing numbers, labor participation rate, every single fed GDP forecast going out years, etc, etc, etc) but for the entertainment value of waiting and watching for that 'Ah-ha' moment when they realize where they/we actually are*.

      *Hint: There's not enough oxygen to sustain human life.

    • Joel

      Adam

      1 year ago

      Check my twitter.

    • Joel

      The thing is...

      1 year ago

      ...is that I don't really want to go into a fire-fight with a dog. Because, I don't want to watch a dog get shot by a machine gun. ...I'm just saying.

  • Comments (21750)

    • BuckeyeDon

      BuckeyeDon Crackpottist

      1 week ago

      Watching the Dow drop is like watching a submarine sink and succumb to crushing pressure and no one can do anything about it.

    • St_franz

      St_franz

      2 weeks ago

      Thank you for the hug <3 By the way, you got me hooked on Agario, you bastard.

    • Ethan

      Ethan Graphic Designer

      2 months ago

      I wanted to invest in my company's stock but I'm not sure if it is a good idea - what is your opinion on BGCP ?

    • Ethan

      Ethan Graphic Designer

      2 months ago

      you are my ringtone, and it confuses a lot of people. thank you.

    • garff

      garff

      2 months ago

      DYY jokes aside, i'm looking at adding to my portfolio over the summer, any good suggestions? Iv made about a 15% return off your podcast advise in the past so I'm back again. Been looking at ENS and POWR. What have you been looking at lately sir?

    • Ati

      Ati

      2 months ago

      O compose

    • Cheyza

      Cheyza

      3 months ago

      Whenever some annoying and nosy little twit asks "...just exactly how much DO you drink?" Just stare at them then slowly say "Not nearly enough."
      smiley1.gif

    • St_franz

      St_franz

      3 months ago

      Missed you in the shorts, Joel! You always knock it out of the park <3

    • Anon_Akiyo

      Anon_Akiyo

      3 months ago

      Caboose is my favorite character.
      Joel is my favorite guy from Rooster Teeth.
      Do I really need to elaborate more?
      Keep watching them stocks bud.
      (Nice pug by the way XD)

    • Bendaren

      Bendaren

      3 months ago

      Hi Joel,
      Im benjamin and i love How To.
      I watch it every Friday and it's always so funny.
      But I'l get to the point.
      As I said before I really like How to, but i would love to get the How To shirt.
      But it isn't available in the Uk store. I know you can probably do nothing about that but I would just really love a How To shirt. If it were to be possible it would be so great! Hope its possible. Maybe hear from you later?
      -Benjamin