patrick.net

komputodo says

When you first heard of Trumps threat of tariffs, did you guys immediately dump your stocks?

No. I did not think stocks would fall like they did, and I think stocks will recover over the next few weeks. I was wrong about the fall, so I hope I am right about the recovery.

zzyzzx says

I understand that there is basically no inventory in your area. I don't understand how that could happen there though.

Everyone fled that was broke and thinking the grass was greener on the other side. Might be, but 100% wouldn't be for us.

A lot of my buddies fled to CO, MT, FL, TX, etc and they're all broke. You can make the same money in any state today. Rural IL is cheap and I'm 1 hour from an airport, so I can leave when I want. Or 10 minutes if my buddy wants to fly regionally. Jet or single engine.

Story is they all left and builders just stopped building. No existing inventory due to low interest rates. Builders here see profit and they're right. So they build baby shit shacks and make $30-50k a house.

I'm copy pasting this from Financology.net. This is Finster's explanation for what happened in the last two weeks:

https://financology.net/2025/04/10/volatility-2

First thing is to realize is that currency is a security like any other. It goes up and down. But we don’t see those daily movements directly because we use currency itself as the pricing unit. We only see them through the prices of other things.

Currency goes down, it takes more of it to buy the same stuff. Prices rise. Currency goes up, it takes less of it to buy the same stuff. Prices fall.

Currency is also like any other security in that it can experience a short squeeze. You’re familiar with what happens when that happens to a stock. Too much short interest, and even a small gain prompts people to buy to cover their shorts. This is a surge in demand for the stock caused by people needing to acquire it to repay the stock they borrowed, causing the value of the stock to surge.

What happens when there is too much currency sold short? The same thing. Demand for the currency surges as people need to acquire it to cover their short positions. It’s really very simple, but not so obvious because we use different terminology for it. We call a short position in currency “debt”.

Another obstacle created by our terminology is that when most things are going down, we call it a bear market. When they’re going up, we call it a bull market. But when currency is in a bear market, we give it a completely different name: inflation. When it’s in a bull market, we call it deflation. This gives the impression that something different is going on compared to when any other security falls or rises. But it’s the same familiar thing, just given a different name that obscures its similarity.

Another blind spot of conventional economics is looking at money supply, but not money demand. With all due respect to the great Milton Friedman, it’s Econ 101. Supply and demand.

So deflation is just a rise in the value of the currency created by rising demand for it as people who owe it try to acquire it to cover their short positions … to repay their debt. This occurs system wide, but an obvious example is brokerage account margin calls. If the Fed dithers and fails to timely match the demand increase with an increase in supply, the only thing that can happen to the market value of the currency is rise. The Fed’s main error though is usually in failing to reverse the supply increase when the demand increase fades, producing more inflation and sowing the seeds for the next crisis.

Years of inflation persuade people that currency can only go down. Massive short positions (debt) build up. Then when money tightens a bit, it can trigger a short squeeze. This happened in 2008, it happened on a smaller scale in 2020, and I believe it’s happening now. It’s noteworthy that each of these three instances followed an inversion and uninversion of the yield curve, as the Fed belatedly tried to reverse its earlier inflationary excess.

The ultimate cause of deflation? Seemingly paradoxically, it’s inflation. The Fed creates inflation (bear market in currency) by expanding supply via lending money into existence. As the debt builds to excess, it provides the tinder for a short squeeze, that is, deflation (bull market in currency).

Interesting to note that this morning’s March CPI confirmed a softening in consumer price increases. All prior to April 2. I don’t want to make too much of it, because changes in the value of the currency only gradually make their way through the pricing chain to consumer prices. They show up first in asset markets, where things reprice in real time, tick by tick.

I’ve tried to keep this as brief as possible in order to not make it appear complicated. It’s only because the language of conventional economics is inadequate that it’s as long as it is. If I’ve left any gaps please call them to my attention and I’ll try to fill them.

WookieMan says

zzyzzx says

I understand that there is basically no inventory in your area. I don't understand how that could happen there though.

Everyone fled that was broke and thinking the grass was greener on the other side. Might be, but 100% wouldn't be for us.

A lot of my buddies fled to CO, MT, FL, TX, etc and they're all broke. You can make the same money in any state today. Rural IL is cheap and I'm 1 hour from an airport, so I can leave when I want. Or 10 minutes if my buddy wants to fly regionally. Jet or single engine.

Story is they all left and builders just stopped building. No existing inventory due to low interest rates. Builders here see profit and they're right. So they build baby shit shacks and make $30-50k a house.

Illinois has always been a Democrat shithole so there is generally an exodus and less demand for more housing.

I'm not sure as far as taxes (property, sales and income taxes) even for those in rural Illinois which obviously is more Republican than Chicago metro area.

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Ouch. Let's see what Monday brings.

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S&P 500 real (i.e., inflation adjusted) return since June 2021 has been nearly 0%

https://www.multpl.com/inflation-adjusted-s-p-500

From March 2000 to October 2014 the real return was 0%.

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I read various sites like Seeking Alpha and conducted a Google Gemini AI query, and it looks like Google would lose 10% of its revenue if today's court ruling still stands. So its not catastrophic to Google and the company continues to diversify such as cloud services, Google Play, and hardware.

And Google stock is already down about 25% from its recent all time high, and its stock price is at November 2021 levels.

AD says

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S&P 500 real (i.e., inflation adjusted) return since June 2021 has been nearly 0%

https://www.multpl.com/inflation-adjusted-s-p-500

From March 2000 to October 2014 the real return was 0%.

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but inflation is massive, that’s why investing works. and inflation always gets a bailout by our government.

The Trump rout is taking on historic dimensions.

The Dow Jones Industrial Average shed almost 1,000 points on Monday and is headed for its worst April performance since 1932, according to Dow Jones Market Data. The S&P 500’s performance since Inauguration Day is now the worst for any president up to this point in data going back to 1928, according to Bespoke Investment Group.

RWSGFY says

The Trump rout is taking on historic dimensions.

The Dow Jones Industrial Average shed almost 1,000 points on Monday and is headed for its worst April performance since 1932, according to Dow Jones Market Data. The S&P 500’s performance since Inauguration Day is now the worst for any president up to this point in data going back to 1928, according to Bespoke Investment Group.

The top 10% own about 93% of the stock market and account for 50% of consumer spending. I believe the administration believes by reducing asset inflation, then consumer demand from the top 10% will decline thereby reducing inflation.

This could mean less speculation for investment housing (including AirBnB's) which partially caused the housing bubble.

Time to go international?

US equity ETFs saw net outflows of $3.6 billion last week while developed international markets attracted above-average inflows totaling $3 billion, according to JPMorgan.

AD says

I believe the administration believes

The administration seems to belive in lots of asinine shit like "crashing stonks brings rates down" or "surrendering at the start of negotiations leads to a great deal" which doesn't exactly work out when meets with reality. 🤡

from Google Gemini AI :

what is the volatility skew for Amzn this week ?

As of today, Tuesday, April 22, 2025, the volatility skew for Amazon (AMZN) options shows a typical pattern where implied volatility for put options (lower strike prices) is generally higher than that of call options (higher strike prices). This indicates a higher demand for downside protection compared to upside speculation.

Here's a more detailed breakdown based on available data:

Near-Term Skew (April 25th Expiration): Market Chameleon data indicates that for the April 25th expiration, the 25-delta put skew is +7.6%, while the 25-delta call skew is -8.4%. This positive put skew and negative call skew confirm the higher implied volatility for near-the-money put options compared to similar delta call options.
Historical Put-Call Spread: Looking at the one-year history of the 25-delta put implied volatility minus the 25-delta call implied volatility, Market Chameleon shows the following for this week:
April 22nd: +3.2%
April 23rd: +3.5%
April 24th: +3.0%
April 25th: +3.5%
April 26th: +2.8% This consistently positive spread further illustrates the higher implied volatility for put options across the week. The latest 20-day average for this put-call spread is +8.5%, while the 250-day average is +2.4%. This suggests that the current skew is less pronounced than the recent 20-day average but still significantly favors higher put implied volatility compared to the longer-term average.

* In simpler terms, the options market is pricing in a greater probability and/or impact of negative price movements for Amazon's stock in the near term compared to positive movements. This could be influenced by factors such as the upcoming earnings announcement expected around April 29th or May 1st, 2025, where investors often seek more downside protection. *

This year’s volatile, trade war-obsessed market didn’t shake American investors’ fondness for exchange-traded funds. In fact, it only made them love them more.

Investors have plowed a record $437 billion into U.S. ETFs so far this year, unfazed by the wildest markets since Covid. And if inflows maintain the current pace—historically, they accelerate in the summer and fall months—it will mark the second straight record year for U.S. ETF flows.

That is happening in part because of the relentless flow of money out of mutual funds and into ETFs, which tend to offer lower fees and certain tax advantages that their older cousins can’t match. But the decadelong trend doesn’t fully explain this year’s surge; indeed, when U.S. markets turned choppy, many began to double down on their bets on U.S. assets. And, now more than ever, they placed those wagers by buying ETFs.

“Investors are seeing selloffs as buying opportunities,” said Todd Rosenbluth, head of research at data provider VettaFi.

The hundreds of billions of dollars that investors poured into ETFs found their way into every major fund category: Stock funds and bond funds. Funds that track popular indexes continue to sell well, but so have those managed by professional stock and bond pickers, a relatively new corner of the ETF market that has gained momentum.

https://www.msn.com/en-us/money/markets/investors-pile-into-etfs-at-record-pace-despite-market-turmoil/ar-AA1FsBe7

AD says

That trash panda has only 5 screens, so no wonder he is losing.

I suspect that most day traders are really hobbyists. I have a small IRA that I use to play speculator with, but also a long term much larger account that is left alone.

HeadSet says

I suspect that most day traders are really hobbyists. I have a small IRA that I use to play speculator with, but also a long term much larger account that is left alone.

I don't day trade, but I'm similar. Check the price of the stock (not amount in the account) and go on my way. Then my big money is in Roths and 401k that I check once a year when I get the call before tax season to toss some into Roths, depending on our tax situation. Once I'm 55 I'll keep a closer eye on it.

75% of gains, 80% of profits, 90% of capex—AI’s grip on the S&P is total and Morgan Stanley’s top analyst is ‘very concerned’

October 7, 2025 at 5:13 PM EDT

https://fortune.com/2025/10/07/ai-bubble-cisco-moment-dotcom-crash-nvidia-jensen-huang-top-analyst/

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Fed's Powell: Stock market is helping support consumer spending now

Fed Chair Jerome Powell acknowledged Wednesday that the soaring stock market is helping support consumer spending — and the overall economy — right now.

If the market goes down, Powell said, it could hurt consumer spending. But spending wouldn't take a large hit unless the market plunged.

"I think it's certainly a factor supporting consumption right now," Powell said in response to a question asked by Yahoo Finance about how much of consumer spending and the economy hinges on the stock market remaining strong.

The question gets at how prominent a role the stock market is playing in supporting spending and the overall economy.

Powell and others have noted the US is in a "bifurcated economy": Lower-income individuals are pulling back on spending, while wealthy individuals benefiting from market run-ups continue to drive spending — perhaps keeping the economy afloat.

According to a September analysis by Moody's Analytics chief economist Mark Zandi, Americans in the bottom 80% of the income distribution — those making less than $175,000 a year — are barely keeping their spending on pace with inflation. Meanwhile, the top 20% of consumers are growing their spending.

"The data also show that the US economy is being largely powered by the well-to-do," Zandi argued.

For his part, Powell cautioned that the relationship between the stock market and spending shouldn't be viewed as a dollar-for-dollar correlation. The more wealth someone has, the lower an additional dollar of wealth matters, Powell said, and consumers' inclination to spend drops as they reach very high levels of wealth.

Meanwhile, those at the lower end of the income spectrum have a higher inclination to spend as they earn more.

"It would affect spending if the stock market went down," Powell said in a press conference after the Fed's meeting on Wednesday. "But it wouldn't drop sharply unless there were quite a sharp drop in the stock market."

Stocks have reached new highs in 2025, led by Big Tech and investors' hopes that AI will lead to blockbuster profits, pulling the overall market higher.

https://finance.yahoo.com/news/feds-powell-stock-market-is-helping-support-consumer-spending-now-183222919.html

Google’s AI-related revenue is not broken out as a standalone figure, but analysts estimate that AI-driven products and infrastructure contributed at least $40–45 billion to Alphabet’s Q3 2025 revenue—roughly 40–45% of its $102.3 billion quarterly total.

How long does this rate of AI spending continue ? Will the rate slowly decline and then steady out ?

Robots like this are the next generation AI technology. So when the capital expenditures for Chat GPT, AI-security cameras, etc. start to decline, then machines like these robots will fill that demand void for AI.

https://mashable.com/article/1x-neo-humanoid-robot-preorder

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AD says

Google’s AI-related revenue is not broken out as a standalone figure, but analysts estimate that AI-driven products and infrastructure contributed at least $40–45 billion to Alphabet’s Q3 2025 revenue—roughly 40–45% of its $102.3 billion quarterly total.

How long does this rate of AI spending continue ? Will the rate slowly decline and then steady out ?

Robots like this are the next generation AI technology. So when the capital expenditures for Chat GPT, AI-security cameras, etc. start to decline, then machines like these robots will fill that demand void for AI.

https://mashable.com/article/1x-neo-humanoid-robot-preorder

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There is no "AI" in that "robot" - it's literally teleoperated by dot indians in VR goggles:

https://m.youtube.com/watch?v=n_VmMrAJc9Q&pp=ygUObmVvIHJvYm90IHNjYW0%3D

RWSGFY says

There is no "AI" in that "robot" - it's literally teleoperated by dot indians in VR goggles:

https://m.youtube.com/watch?v=n_VmMrAJc9Q&pp=ygUObmVvIHJvYm90IHNjYW0%3D

Yes I agree, but that robot will have AI once it completes that training phase and goes into low rate initial production.

AD says

RWSGFY says

There is no "AI" in that "robot" - it's literally teleoperated by dot indians in VR goggles:

https://m.youtube.com/watch?v=n_VmMrAJc9Q&pp=ygUObmVvIHJvYm90IHNjYW0%3D

Yes I agree, but that robot will have AI once it completes that training phase and goes into low rate initial production.

Or not.

RWSGFY says

AD says

RWSGFY says

There is no "AI" in that "robot" - it's literally teleoperated by dot indians in VR goggles:

https://m.youtube.com/watch?v=n_VmMrAJc9Q&pp=ygUObmVvIHJvYm90IHNjYW0%3D

Yes I agree, but that robot will have AI once it completes that training phase and goes into low rate initial production.

Or not.

So you are saying that the robot company may view it more profitable to just have "dot Indians" to manually operate the robots instead of producing autonomous or AI-chip robots ?

AD says

Google’s AI-related revenue

Another example of Google's AI - related revenue stream.

https://finance.yahoo.com/news/google-strikes-game-changing-3-110000267.html

Google has helped to secure a 10-year, $3 billion artificial intelligence hosting contract with Bitcoin miner Cipher Mining and U.K.-based AI computing startup Fluidstack.

In exchange, Google will receive a 5.4% equity stake in Cipher. But since AI training is known for being energy-intensive, and dirty fuels still power most facilities, the deal could spell bad news for the environment.

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RWSGFY says

AD says

RWSGFY says

There is no "AI" in that "robot" - it's literally teleoperated by dot indians in VR goggles:

https://m.youtube.com/watch?v=n_VmMrAJc9Q&pp=ygUObmVvIHJvYm90IHNjYW0%3D

Yes I agree, but that robot will have AI once it completes that training phase and goes into low rate initial production.

An android will need AI semiconductors.

Or not.

The goal is for an android like Data in Star Trek Next Generation. Gene Roddenberry was a brilliant visionary, and so was Steven Speilberg with his movie AI.

AD says

Yes I agree, but that robot will have AI once it completes that training phase and goes into low rate initial production.

Just like all those self-driving cars?

AD says

The goal is for an android like Data in Star Trek Next Generation. Gene Roddenberry was a brilliant visionar

"Rossum's Universal Robots" came out un the 1920s. In fact, the author coined the word "robot" from a Czech noun for "work." His robots were human-like and intelligent. They also became self-aware and wiped out humanity in a civil war.

HeadSet says

AD says

The goal is for an android like Data in Star Trek Next Generation. Gene Roddenberry was a brilliant visionar

"Rossum's Universal Robots" came out un the 1920s. In fact, the author coined the word "robot" from a Czech noun for "work." His robots were human-like and intelligent. They also became self-aware and wiped out humanity in a civil war.

"RUR" - in the end, the creator fabricates a pair of self-replicating robots to continue civilization.

A low-budget movie along these lines was "Creation of the Humanoids."

From the Kobessi Letter

The elephant in the room:
AI stocks are outperforming consumer stocks by 20%+ over the last 60 DAYS. And, as AI investment exceeds $1 TRILLION per year, car repossessions are at 2009 levels. There are 2 US economies:
Rich vs Poor, and AI is the lifeline of it all.
For the first time in history, the Magnificent 7 stocks are now worth over a combined $20 TRILLION. This means that these 7 stocks alone now account for a record ~35% of the S&P 500. Not even the Dot-Com bubble in 2000 saw concentration like this. Tech has taken over.
And, this has been fantastic for investors. Since the April 2025 bottom, the S&P 500 has added over +$18 trillion in market cap. Last week, Nvidia became the first company to become worth over $5 trillion. Over HALF of the S&P 500's gains since 2023 are from 7 stocks.
But, on the other side of the table is a more bleak picture. Consumer-facing stocks are getting crushed, and the latest earnings season only underscored that. Take a look at the YTD performance of these consumer stocks. General Mills and Kraft Heinz are in a bear market.
The list goes on and on:
Take a look at Starbucks now down -11% YTD, and Chipotle down -47% YTD. Wendy's is down -48%, and Sweetgreen is down -80% this year ALONE. Many of these corporations cite a decrease in demand due to inflation and the economy.
Chipotle's CEO said it blatantly last week:
Young Americans are pulling back on eating out, specifically those in the 25 to 35 age group. "Unemployment, increased student loan repayment, and slower real wage growth" are supposedly to blame.
The data generally agrees.
The economy is particularly bad for Americans who are seeking entry level jobs. The US unemployment rate for youth graduates aged 20-24 has averaged 8.1% over the last 3 months, the highest in 4 years. This is up sharply from under 4% just 2 years ago, when the AI boom began.

********** Without Artificial Intelligence (AI) spending, the US economy would likely be contracting right now. AI spending contributed ~1 percentage point to the 1.6% US GDP growth rate recorded in the first half of 2025. This means ~63% of economic growth came from AI investment. This is by far the most on record. *************

As a result, US market concentration has hit levels not seen since the 1880s. In other words, the market is the least diversified in ~140 years. This isn't necessarily "bad" for stocks, if tech keeps on rising. But, those without exposure to stocks are being left behind.
And, while asset owners generate TRILLIONS in market cap, car repos are at 2009 levels. In 2024, 1.73 million vehicles were seized, up +16% YoY and +43% compared with 2022. We are literally in an economy where you are either "rich" off of AI or having your car repossessed.
Lastly, the Fed is cutting rates into stagflation and asset prices are rising sharply across the board.

And to continue my last post (# 343) just look at how bad Las Vegas stocks are now. Less are willing to pay to vacation and gamble in Las Vegas.

Michael Burry betting that AI-stocks runup will end soon



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Michael Burry's net worth

AD says

Take a look at the YTD performance of these consumer stocks. General Mills and Kraft Heinz are in a bear market.
The list goes on and on:

I think we are seeing is people switching from name brands to store brands or no name brands. This also applies to things like tires in that people now mostly default to the cheapest Chinese crap that they can find. Storage stocks are getting hit too; I think that is because of all the local competition. You would think that with high rents and not so great economy that there would be a bigger demand for storage units? There either isn't or they are being built in such a way as to outstrip demand. Only looking at storage stocks for the dividend, but can't justify buying when the price keeps falling.

AD says

And to continue my last post (# 343) just look at how bad Las Vegas stocks are now. Less are willing to pay to vacation and gamble in Las Vegas.

Vegas has priced itself out of the market!

AD says

But, on the other side of the table is a more bleak picture. Consumer-facing stocks are getting crushed, and the latest earnings season only underscored that. Take a look at the YTD performance of these consumer stocks. General Mills and Kraft Heinz are in a bear market.

Campbells Soup, also another known dividend payer getting clobbered as people switch away from name brands.
Pfizer also down, but we know the reasons for that.