Futures markets no longer fit for purpose

Have a read of this twitter thread regarding the Nickel Futures market:
Thread by @BaldingsWorld on Thread Reader App – Thread Reader App

Bearing in mind the original intent of futures market was so that a commodity producer (farmer/miner) could sell their product in advance (shortsell futures) at a price that was worth their investment in producing that commodity. i.e. a price hedge so they can secure funding and eliminate risk off losses.

We now have a perverse scenario where speculators have caused the futures market to become a risk of bankruptcy via short-squeeze margin calls. The company itself is still profitable and could meet its obligations of providing the commodities at the hedged price, but they are being margin-called in an attempt to bankrupt them and seize all their assets.

The second perverse scenario is the markets are owned by the Chinese who have decided to shut the market down possibly to prevent this miner going bankrupt.

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Coming

Yes I read the other day that they actually REVERSED trades that had already gone through which is just absolutely fucking wild

also we are going to see the law abandoned when Russian and western governments just seize whatever assets they like

and the end of the dollar as global reserve currency

we are fairly rapidly heading towards collapse now – it’s accelerating at least

it’s just hard to know how it ends (inflation vs deflation , debt jubilee etc) because it’s purely dictated by highly corrupt and competing oligarchs
there is no point using previous rules or reason

However, DLS is back to calling for house price crashes today

https://www.macrobusiness.com.au/2022/03/markets-ready-to-crash-australian-house-prices/

and for that reason, because he is the most important contrarian indicator on the planet, I am betting on debt jubilee and (hyper)inflation

robert2013

Governments seizing things is the best case for crypto I’ve ever seen.

Coming

Don’t know if you’re aware but governments have been seizing crypto left right and centre

robert2013

So what? Crypto in privately held wallets cannot be touched by anyone except the person who knows the private key. Only the lazy who keep their money in exchange wallets are exposed to that risk.

Last edited 6 months ago by robert2013
Coming

then what use is it

DictatorDavid

“However, DLS is back to calling for house price crashes today
https://www.macrobusiness.com.au/2022/03/markets-ready-to-crash-australian-house-prices/
and for that reason, because he is the most important contrarian indicator on the planet, I am betting on debt jubilee and (hyper)inflation”

Fucking lol. What’s Reusa saying? Because he’s been way more right than DLS ever has over at MB.

DictatorDavid

https://www.macrobusiness.com.au/2020/03/when-to-buy-the-crash/

Aged like milk lol
The real worry is people are still taking DLS advice and think a housing crash will come soon.

Stewie

I got my mum out of a long term USD position within 2 cents of the low that day. “Go to the bank and convert your USD balances – now!” That panic was one of the biggest gifts in the past 5 years.

Always buy the end of the world!!!

Last edited 6 months ago by Stewie
Coming

Have money markets ever been wrong ?

Coming

Hang on

some if that is the premium payable for duration / opportunity cost

the normal upwards yield curve

Last edited 6 months ago by Coming
Coming

I think the bond market is usually right

Hence why yield curve inversion reliably predicts recession historically

not just good at assessing the economic situation, but also the political situation

id trust the bond market over DLS or my/your instinct I guess ?

the premium doesn’t reflect “reality” – it’s not JUST a guess about where rates will be
it reflects the duration cost which is affected by future growth expectations but also current circumstances

i think high yields are pricing in the current risk of inflation which currently include war , deglobalisation, shortages, profligate government spending, labour shortages, political turmoil / labour organising etc

house prices are important , but they don’t run the world or Putin would never have invaded Ukraine (must be killing property prices in Kharkiv right now )

Coming

It’s not a reflection of where the market thinks rates will be

it’s a reflection of the compensation demanded for duration / having money tied up

if there are better IMMEDIATE opportunities for return on investment elsewhere , then long rates will rise

Having said all this , don’t know that DLS has really been “right”

he’s a perma bear – a broken clock is correct twice a day

he should have sold bonds in early 2020 but I bet he didn’t
they’ve been slaughtered since then

it’s always a good time to hold bonds for him

Last edited 6 months ago by Coming
Coming

https://www.smh.com.au/politics/federal/higher-interest-rates-priced-in-by-the-market-treasurer-s-warning-to-mortgage-holders-20220310-p5a3ld.html

Jewdenberg getting the peasants ready for it too

very weird that he would take the blame preemptively, since it won’t happen until after the election ?

why not just say rates are always lower under the LNP, wait until you lose, then blame labor when they go up ?

Lots of weird behaviour by the libs leading up to this election , like they want to lose

In an exclusive interview with The Sunday Age and The Sun-Herald, the Treasurer put Australians on notice that “the market has been pricing in – it’s a statement of fact – higher interest rates in due course”.

But with financial markets in Australia pricing in a full percentage point increase in interest rates by year’s end, and another 1 percentage point in 2023, Mr Frydenberg conceded the cost of a mortgage was likely to rise – even as wage growth remained relatively flat. However, he moved to reassure families.

Coming

https://m.youtube.com/watch?v=PwdjmL5Uu3I

think you will enjoy this video

two fairly credible internet experts with differing views on the bond markets

Coming

It seems Joseph has backed away from his prior claims that QE is inflationary / money printing

Gouda

So a crash in 18 months then?

Gruppenführer Mark

Western governments have been seizing assets for a long while now. Only before it was reserved for the evil little people – Libya, Iraq, NK, and lately, Afghanistan. Now with Russia in the cross-hairs, which has the largest number of sanctions slapped on it, compared to all other countries, the sanctions are starting to bite….. in the US and especially in EU.

https://www.theguardian.com/world/2022/mar/10/russia-plans-to-seize-assets-of-western-companies-exiting-country

I am fairly certain that if this was happen (and it likely will), there will be a loud protest from the collective west about this unfair action. So, Russia gains real assets on the ground, and will be able to operate, people in the West, from billionaire owners to your run-of-the-mill investors, will lose. This is madness.

And let’s not even talk about energy.

Ramjet

EmBee has been talking up the increase in fixed rate and seem to ignore the decrease in variable rates. A good LVR and you can get a rate in the low 2%. Haven’t banks also been dropping investor rates?

Phil Lowe will not raise rates, he even said he wants to see what happens with the supply side. Inflation is more of a threat than rate rises. Inflation will increase expenditure and somewhat reduce some borrowing capacity.

emusplatt

good thinkin’

robert2013

That truly is newsworthy. I saw a very odd looking nickel price yesterday but was busy with something else, I assumed it was an error. Thanks for investigating and sharing.

T

If Scomo is smart, he will kill immigration now.

The higher commodity prices + tax revenues with minimal immigration will deliver a massive cash boost to everyone in Oz.

Leading to higher bank reserves which the big 4 will immediately offer as lower rates to home buyers.

All of which means a sweet year in ezfka with big dividends and higher house prices. If AUD falls a bit wages will definitely rise too.

Calling it, Scomo will win the next election if he slow walks immigration.

Reus's Large MEMBER

But he is not smart …. so open teh gates and lower the rate is the only play in his masters books

robert2013

LoL!

LSWCHP

If Scomo is smart? But…but…he’s not. Everybody knows that.

T

He got plenty of that rat cunning though, never know, could happen.

Yeah probably won’t. But I’m hoping his inner scummo will shine through.

emusplatt

baldrick level rat cunning ..the reverse midas.