Who here is ready for the bubble to end all bubbles to pop when

>>1496928

>Less opportunity to advance in life is the American Way.

>>1496931
>implying the financialization bubble hasn't been artificially increasing housing prices and cost of living while simultaneously depressing the labor market
wew lad

>>1496928
I don't think they are going to raise it that fast. There will be some initial panic, but it will die down.

>>1496928

I agree with a lot of what you are saying, but you need excitement to get the people going.

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>>1496928

S&P500 just surpassed the dot com bubble peak adjusted for dollar inflation btw
http://www.multpl.com/inflation-adjusted-s-p-500

>>1496928
Can someone explain this in simple terms.

What rates is fed rising?

Why would they be rising?

Is there some tutorial for retards like me?

I really want to understand this whole fed rates raises economy stress thing, but I just can't grasp it so far.

>>1497032
There's nothing wrong with the economy other than the fact that the financial/ banking sector is extremely overvalued thanks to free money courtesy of the Federal Reserve. Don't let anyone tell you differently, because these financial institutions are going to throw a huge temper tantrum and start scare mongering once their funny-money faucet gets shut off.

>>1496928
>implying that business leaders won't just double down like they have been for the last 40 years

>>1497052
>he fact that the financial/ banking sector is extremely overvalued thanks to free money courtesy of the Federal Reserve.
Is this "the bailout". When government put gov money (tax payer money) in banks in 2008 to safe big ones from failing, so jobs won't be lost and economy won't receive a hit? They let one die (Lehman Brothers?) to show an example, yeh?

So what are the "fed rates"? How these "rates" affect other economic stuff? What does it mean for S&P500? I'm a stupid indexer, I don't know this shit, but want to learn.

>>1497032
The Fed raise interest rates thats banks pay to take loans from the federal reservee in order to pull money out of the system in order to combat inflation and keep the dollar in demand for long periods of time. The banks pass that shit onto people who are trying to take out loans from them. This lowers the amount of money in circulation, combating inflation.

>>1497059
No, that was tiny in comparsion. The Fed then subsequently printed five trillion dollars over several years as a program called "Quantitative Easing" or QE which it used to buy bonds and subsidize the equities markets and banking sector.

>>1497060
Ok, did I get this correctly:
1) Inflation keeps going up
2) Fed thinks it is too fast, gotta slow down
3) Fed makes dollars and lends to banks
4) Fed makes dollars more expensive for banks to borrow (banks have to pay more back in rates %)
5) Banks get less money in circulation, because they are paying more back to Fed
6) Less money in circulation means it is worth more
7) It means inflation is less

Yeh?

>>1497070
So, is this correct?

>>1496928
the """""""trendline""""""" on this graph is really triggering me

as if the "real economy" only grows linearly or something? what the fuck?

>>1497769
Was thinking the same. 3% inflation compounds... Should have a noticeable curve ovee the given timespan. Some pajeet monkey probably put it on his blog.

Nonetheless there is undoubtedly the biggest bubble comprising of anything money can buy, and it will hopefully pop soon.

>>1496928
>no more financial derivatives
i think you meant to say
>no more high risk markets like financial derivatives with massive amounts of other peoples money
derivatives are good for the economy when losses arent socialized

>>1497777
Quads confirm

>>1496928
try using a log graph

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>>1496928
>no more cult of shareholder value
why would this be good for workers?
>no more cutting R&D spending
companies with R&D don't use debt and derivatives in their financing? companies with R&D don't provide jobs? companies with R&D don't use stocks to for funding? why wouldn't R&D be slashed under your plan again?
>no more financial derivatives
because Occupy said they were bad, right?
>no more capital stagnation
you might want to check on this one too

>>1496931

Those million dollar one bed no bath houses and tuition that increases by 6% year over year sure is helping millennials advance

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There will be soon house clearance sales all over as the people will not survive the rate tick

>>1497769
>>1497775
>they don't know that the trendline only goes exponential during bubbles
Embarassing

>>1498062
The same thing applies to you too. Look at any other bubble in history and you'll notice a transition from a linear trendline to an exponential one. The fact that you're even suggesting this means that the equities markets are irrevocably fucked.

>>1497052
>once their funny-money faucet gets shut off
QE ended in 2014. The faucet was shut off two years ago, moron.

>>1498088
shareholder value is maximized when costs are low, revenues are high, aka as few workers getting paid the smallest amounts you can pay them. moving away from short-term, bonus oriented thinking for 2-3 year profit boosts is the only real way to help the worker and keep jobs in our country.

financial derivatives will never go away and are necessary but require a little more information about their industries to become publicly available. even when investing in a bank trying to assess their CDS or MBS obligations is near impossible. for the average depositor who just wants his money in a stable bank they solve this crisis of misinformation by supporting only the largest banks.

>>1498234
>be bank
>borrow money from the fed at approximately 0% interest
>loan out the money that you borrowed for free at x% interest
>this somehow doesn't qualify as giving the banks free money

>>1498088
>why would this be good for workers?
I'd suggest you read a book called Shareholder Value Myth. One reason behind BP oil spill was that because the corporation only looked after the ahort term interests pf its shareholders, R&D was cut and it led to lax safety standards across its gulf of mexico fleet which then led to the oilspill. It considered shareholders' short term value more important than its STAKEHOLDERS' value. In the end BP, shareholders as well as stakeholders got fucked.

>>1497070
no.

>>1496928
what is the reasoning behind that chart's trend line

>>1498413
So what is the correct version?

>>1498106
I can't wait for this shit. Gonna buy my whole block for pesos

So what's going to trigger this?

>worthless unicorn tech business
>privately held debt
>national debt
>interest rate hike
>a Trump presidency
>all of the above

>>1498366
If you're too stupid to know the difference between the prime lending rate and qualitative easing, just leave /biz/. We don't want you here.

>>1498877
>"qualitative" easing
>calling others stupid
Yikes, you're not a sharp one...

>>1498234
shut up you retard ~%0 precent interest rates to banks is retarded. We are going to get hyper inflation.

>>1498735
>a Trump presidency
no. Most people polled say trump would do better with the economy, and if you study economics, funny thing, it depends on psychology. If people think tomorrow will be better then today, they invest and spend today. So a trump presidency will help the economy

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>>1500621
>We are going to get hyper inflation.
That would be unfortunate ... if it were remotely true. But QE and low interest rates haven't budged inflation in all the years they've been in effect.

So you call someone a retard, but proceed to make a completely retarded statement. Makes you think....

>>1500634
Does that rate of inflation include:
>Cost of University
>Cost of a home
>Cost of a burrito

If it doesn't, it's wrong.

What would be the best way to prepare for something like this?

>>1500638
>Standardized statistics are wrong because because they don't match my personal experiences or biases.
Fuck off, kid.

>>1498451
inflation for 2015 was quite low, but it's somewhat increasing. It's still below of what the Fed wants.

Fed is holding the rates because it fears it might have an adverse effect on employment and consumer spending, but wants to raise it to avoid creating bubbles (which it is and is creating a very big problem - the risk of a US recession in the first half of 2017 is 1/3 and is increasing)

But for the record, if the Fed "makes" more money, it is cheaper, not more expensive. Just get a hold of any macro 101 textbook and skip over to central banks chapter.

>>1497777
derivatives are a zero-sum game though

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>>1500653
>wanting to own a home, going to school and eating food is simply "my personal experiences or biases"

Fucking Boomers.

>>1500673
where do you live m8? Curious, because your city might have inflated cost of living.

>>1500673
Look kid, there's really simple reasons why housing, education and food are excluded from CPI. Since you're too stupid to Google it, here's the short answers: Housing isn't a consumer expense, prices vary wildly based on location, and a house is an asset not an expense. Education is not a consumer expense, costs vary wildly based on the nature of the institution, and very few average households face education costs. Food (and energy) are excluded from CPI excludes food and energy prices because, historically, they have been highly volatile and non-systemic (i.e., insensitive to monetary policy).

Now that I've done the work that you were too lazy to do yourself, will you kindly shut the fuck up?

Fucking Millennials.

>>1500673
The often touted inflation figures are pretty good when applied to food costs ( underestimation ifor anything) and are currently pretty good on avg ( i.e. not in fucking San Francisco) real estate.

Where they shit out hard is education expenses and Healthcare costs.

>>1500638
>Cost of a burrito
yes, yes it does. It measures a bundle of household staples like food and toiletries.
Stop picking apart the inflation metric you retard. You're wrong and just as bad the people saying hurr durr unemployment is really at 20%. It's not the number, it's the trend that matters.

>>1500677
I live in a college town. Working on my PhD at the same institution I did my undergrad. In that time, tuition has increased at a steady 5% a year. The price of ready to eat food has increased 50%. 40% of my income goes towards rent. That isn't even as bad as at the average college campus. My parents home is 'worth' x3 what they bought it worth 15 years ago. At the height of the bubble, it was worth x4.5 more.

But hey, TVs and Gas are cheap!

>>1500690
So 100% of my cost of living is not included in the metric they use to determine inflation but it is a good metric?

>>1500709
You'e an abnormal piece of shit. Sorry.

>>1500690
kek
also, food is included in CPI

people seem to think that having recessions is unhealthy but i think they are a necessary cycle for economies, what is important is minimizing the length of the recession and any aftershocks that may occur.

It would be nice to only have positive unlimited growth but this is not realistic.

>>1500717
>food is included in CPI
In standard, but not core. We should be talking about core since that's what the Fed uses to make monetary policy decisions, but fuck it ... this thread is a clusterfuck anyway.

>>1500709
this. the economy is fucked for the ~95% in the middle. It's okay for the 0.01% and sort of okay for the very poor, as in their life isn't getting poorer. But the rest are fucked from 0% interest rates.
OP post had it best
>>1496928
no more real-estate speculation
>no more cult of shareholder value
>no more cutting R&D spending
>no more predatory lending
>no more financial derivatives
>no more capital stagnation
The last thing we need right now is more capitol it's not even being used to create new jobs or factories, they are just trading it with each other.

>>1501233
>the economy is fucked for the ~95% in the middle
Fuck, I hate Millennials. Their whining is so loud I won't get a good night's sleep for the next 30 years.

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>>1498105
>being an the epicenter of this shit
We got fuck all for a "living" then we're socially conditioned to play victims and clean last Gen's mess while they create more.

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

>>1499172
Smart. We need to start stripping out quatitative data and social effects. They're starting be become obvious(division teaching, massive bliss in ignorance and mental slavery)

Cant wait to sink my teeth into the s&p at discount prices

>>1500721
\Econ101

>>1500670
eh, stock trading is a zero sum game too. derivatives certainly have legitimate uses. if you're a farmer and the majority of your income comes from 1 bulk sale a year, it's nice to be able to lock in the price ahead of time.

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>>1500690
>>1500714
>>1500724
>>1501238
>lalalalalala I can't hear you - the poster
Like how deeply in denial can you be to get confronted with a bunch of perfectly logical arguments and totally disregard them with name-calling? How deep are you in the market?

>>1500690
>be US economy
>be 2/3 consumer spending
>largest consumer purchase is housing
>almost always with borrowed money
>monetary policy barely affects housing

Since that's the case, why bother with monetary policy at all in the US if it can't affect a major portion of the economy? It seems pretty useless and all they did with Japanify the US with their massive asset purchases. Free market economy my balls.

>>1500690
>be economist
>quantify purchasing power with a metric that excludes the most important expenditures of most peoples' lives on a technicality
>"look, no inflation!"

lol

>>1501298
He's right though. Commodity prices have taken a dive despite low interest rates. If monetary policy affected them drastically, they'd be to da moon.

Everything else is going up due to the way the system is structured to fuck people over.

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>>1497777
>high risk markets
Yea, like the ones created through abusing QE, inaccurate data, and derivatives contracts...oh wait..

>>1497777
>when losses arent socialized
>lie to the people
>IGNORANCE = BLISS

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>>1498106
>house clearance sales
Where can I enjoy some spoils? Already bought gold (months late but still good)

>>1501305
>everything is inflating but it's not actually inflation because it isn't wheat, oil, or corn
Come on man

>>1500690
>Fucking Millennials

Casual

>>1498106
OY VEY IT'S ANUDDA 2007

>>1501305
We're experiencing a contraction of the monetary supply right now because people are too scared to spend.

This is the prequel to what's to come with big inflation when everyone realizes their non refundable debt units are completely useless.