Stock market will crash in 60 days...

[DudleySmith]

Links...

Ocean Shipping...

"Xeneta CEO Patrik Berglund said in late November that if spot rates had not stabilized and started to rise again by the first and second quarters of this year, “carriers have played this market really badly.”

By that definition, ocean carriers have played this market really badly.

Spot indexes are not plummeting like they were in the second half of 2022, but they’re still inching downward week after week. The market bottom is proving elusive as transport capacity continues to exceed demand.

The spot market is signaling where annual contract rates are heading in 2023."

Container shipping market yet to bottom as spot rates keep slipping

Container lines are unable to prop up rates because they haven’t culled enough capacity to compensate for weak demand.

www.freightwaves.com

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Trucking ...

View attachment 763993

No demand

Even with demand remaining relatively unpredictable, there are no reasons to expect a significant stimulus event in the near future. The Fed is still fighting inflation with interest rate increases and has signaled that it has no reason to think its job is done.

The only macroeconomic indicators with any real strength in them have been the jobs market and revolving credit (credit card debt) dollar amounts, the latter of which being a negative sign for future consumption.

There are far more reasons to expect weakening demand rather than strengthening in 2023, which means trucking operators have to play a waiting game as to when some form of pricing leverage will return. That being said, freight demand is far more fickle than capacity shifts and needs to be monitored more closely even though there appears to be a significant buffer.

Truckload market has 25% too much capacity

Perhaps the biggest question of 2023 for domestic trucking is when will the surplus of capacity fade to a point that prices stop falling. One data point provides deeper insight than simply a count of drivers or tractors.

www.freightwaves.com

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High fuel prices and low demand...can't get much worse.

Yet they still run around babbling about 'driver shortages'. lol

 

[Missourian]

There are 4 million class 8 trucks on the road.

If we're really 25% over capacity...

If capacity is 3.2 million.....25% over capacity would put us at (3.2 million x 1.25) = 4 million.

You're welcome.

If there are 4 million trucks and they are 25% over capacity, that means capacity is 3.2 million.

Now you see why I stay out of the stock market.

Regardless...that's a lot of trucks.

And the level of over the road trucks has been at or near 4 million for years.

A freight reduction this size is staggering.

Many companies just paid a premium for new trucks in the Pandemic Chip Shortage... $170,000 or more for a Peterbilt or KW.

Plus...new trucks just don't last as long as older trucks.

A 60 series Detroit or an M14 Cummins or a 3406E Cat...any one of them would get you 2 million miles.

These new Ultra-low sulfur diesel, def, sensors out the wazhoo "clean" engines may get ya 750,000? Some less.

 

[Missourian]

Yet they still run around babbling about 'driver shortages'. lol

Just a shortage of good drivers.

 

[DudleySmith]

Just a shortage of good drivers.

Self-inflicted shortage, as usual. As long as the govt. keeps pouring billions into training their drivers for them, they will continue to run them off as fast as they can.

 

[Missourian]

That's cool, sounds like you got your own hustle going on, and I'll admit, I don't understand what any of that means.

Class 8 trucks are just the industry name for tractor trailer sized trucks.

The amount of freight available right now is way down.

Simplified...for every four Over-the-road trucks there are only three loads.

 

[Kruska]

Must be that new math.

View attachment 764040

Sorry - you guys all don't get the real picture/issue

1st statement; 4 million class 8 trucks - on the road
A). No single country on earth, incl. the USA can produce 4 million class 8 trucks per year.
Therefore the figure 4 million covers an "unknown" period in regards to production and registration. Or based on production knowledge - a 10 year period, see;

Heavy truck production - United States | Statista

Over 320,000 heavy trucks were produced in the United States in 2022, an increase of about 11 percent compared to the 2021 production volume.

www.statista.com

Over 288,000 heavy trucks were produced in the United States in 2021, an increase of about 20 percent compared to the 2020 production volume. That year, just under 4.3 million heavy trucks were produced worldwide.

P.S. "heavy trucks" consist of Class 7 and class 8.
This is what happens when discussions are based on unsubstantiated one - liners.

US order rates of Class 8 trucks: was at around 310,000 units/in the past year.
This order rate does not solely involve only US brand trucks. But different global brands supplying the US market demand for Class 8 trucks.

Class 8 Truck Orders — FTR Orders & Indices

Class 8 orders for October at 28,000 units, down 10% from September and 35% from October 2022.

freight.ftrintel.com

Therefore a reasonable production capacity estimate onto US based class 8 truck producers/year is at around 250,000 - 300,000 units.
And not 2 million, or 3.2 million or 4 million.

 

[multivita-man]

I've been thinking the market is still overpriced by historical standards. When the current swoon started last year, PE ratios were near their historic highs of the dot com era. That market bust took about 40-45% off the market IIRC (I might be off a few pct points).

We've shaved about 20% off the market and actually regained some, so really, another 10-20% wouldn't be really that much of a surprise - shouldn't be anyway.

Why is the market so 'resilient'? Because even though the Fed has raised rates, it hasn't really shrunk its balance sheet all that much. There's still a lot of money supply and people are still employed, so they can still buy things. People will continue to buy things as long as they are relatively confident they can keep their jobs and as long as the spigot of money is still flowing.

The Fed hasn't contracted money supply - and thus they haven't really put that much pressure on inflation. They've just made borrowing more expensive. Worse, the Fed can't seem to get its messaging straight, which keeps big time investment decision makers thinking on the optimistic side, and so they rush back into equities, thinking that the Fed will go easy on rates

Even with all of the massive tech layoffs, the number of new jobs has outpaced the number of layoffs; however, the data show that job losses - most of which are in tech - may finally be catching up with the new gains.

Recessions are inevitable. What worries me about this one is that this is a situation where households could go from relatively comfortable to really, really uncomfortable fast. This may put pressure on the Fed (in an election year) to make decisions that are not well thought out and influenced by politics. Recessions are one thing; recessions worsened by bad central bank policy quite another.

 

[JohnDB]

I've been thinking the market is still overpriced by historical standards. When the current swoon started last year, PE ratios were near their historic highs of the dot com era. That market bust took about 40-45% off the market IIRC (I might be off a few pct points).

We've shaved about 20% off the market and actually regained some, so really, another 10-20% wouldn't be really that much of a surprise - shouldn't be anyway.

Why is the market so 'resilient'? Because even though the Fed has raised rates, it hasn't really shrunk its balance sheet all that much. There's still a lot of money supply and people are still employed, so they can still buy things. People will continue to buy things as long as they are relatively confident they can keep their jobs and as long as the spigot of money is still flowing.

The Fed hasn't contracted money supply - and thus they haven't really put that much pressure on inflation. They've just made borrowing more expensive. Worse, the Fed can't seem to get its messaging straight, which keeps big time investment decision makers thinking on the optimistic side, and so they rush back into equities, thinking that the Fed will go easy on rates

Even with all of the massive tech layoffs, the number of new jobs has outpaced the number of layoffs; however, the data show that job losses - most of which are in tech - may finally be catching up with the new gains.

Recessions are inevitable. What worries me about this one is that this is a situation where households could go from relatively comfortable to really, really uncomfortable fast. This may put pressure on the Fed (in an election year) to make decisions that are not well thought out and influenced by politics. Recessions are one thing; recessions worsened by bad central bank policy quite another.

This one was started when the Fed pumped so much free money into our economy with bonds it was insane. This started at the release of the vaccines and the Federal Election all at the same time....

And they overpumped the market until it became obvious to them that inflation, supply chain issues, and the shipping were ALL having issues. The newly elected Biden Admin was issuing directives left and right that completely changed the landscape of the US economy.
So currently....the economy is in the dumpster until such time as Wall Street can figure out if it's feasible to have a business or not.

Of course Tech has had layoffs. Most of their employees are paid from stock sales and investors anyway. They don't make money until they become Apple, Meta, or Twitter. Some chipmakers are making money....Micron usually does. Intel? Not so much. AMD? Yes.....
Amazon is still in trouble leftover from Bezos being at the helm....sellers not getting paid and labor issues at distribution centers. All of which makes their products more expensive than brick and mortar retailers....including their own cheap low quality private label product line.


So what we are looking for are margin rates to drop below 55% to around 30%. Look for the slope angle of the DJIA to be under its 20 year line....
Putin is dumping gold by the dump truck load into the market so avoid metals.

In the meantime you can play short funds (hedge funds that short the market)
Just watch for the corrections when they split or consolidate.

 

[Dirk the Daring]

Great movie.

The Big Short (2015) ⭐ 7.8 | Biography, Comedy, Drama

2h 10m | R

www.imdb.com

Love the movie, but it leaves a lot of the story out. And I don't mean from just the book, which is also great however...

 

[B. Kidd]

...says best selling author Larry McDonald.

"They're playing catch up, and while they were doing quantitative easing in 2021, inflation started to rage and now they're trying to catch up," The Bear Traps Report founder Larry McDonald said Wednesday on "Mornings with Maria."

"Our 21 Lehman systemic risk indicators that look at equity and credit point to one of the highest probabilities of a crash in the stock market looking out 60 days," McDonald, who is also known for writing a best-selling book on the Lehman Brothers collapse, cautioned.

Stock market will crash in 60 days, best-selling author on Lehman collapse warns

Market risk indicators are signaling one of the highest probabilities of a crash in the next 60 days. The Bear Traps report founder Larry McDonald advises on how to allocate your capital.

www.foxbusiness.com

Don't have anything to add to that...not a stock expert. It just feels very very Black Monday-esque.

The title of that article is a little misleading...McDonald actually says "best chance" if the S&P earning fail to meet expectations.

I wasn't around in 1929...but I was in 1987.

You experts can discuss the ins and outs of the article...I'm just going to read the replies.

Well, most of the replies.

Not the replies from those who know less than I do who will unfailingly post that everything is fine because hope and fairy dust and a potato in the White House.

Interesting.

The Silicon Valley Bank just collapsed in California today. Fed regulators have stepped in! Hmmmm.....

 

[Missourian]

Interesting.

The Silicon Valley Bank just collapsed in California today. Fed regulators have stepped in! Hmmmm.....

I just read a story earlier about the founding investors trying to take their money out this morning and attempting to leave the depositors and investors holding the bag...

---

Building managers at Silicon Valley Bank’s Manhattan branch reportedly called the police Friday morning after a group of tech founders showed up and attempted to pull out their cash.

Police responded after a group of “about a dozen founders” went to SVB’s Manhattan location on Park Avenue, journalist Eric Newcomer said in a Substack post. One of the founders was former Lyft executive Dor Levi, who provided Newcomer with text updates from the scene.

NYPD called to Silicon Valley Bank branch as depositors attempt to pull cash: report

Silicon Valley Bank’s sudden cash crunch has sparked fears of a “run on the bank.”

nypost.com

 

[Lisa558]

Doesn't matter does it?
Those who believe in a crash, invest into buying negative options - the others into positive options
So what ever billions or trillions are wasted by A speculators - are being collected by B speculators.

If the share-market crashes those into negative options making billions, will then reinvest into far lower share-prices, and the carousel starts all over again.
The Fed (government) will hop in and pay out the difference to those super-rich who lost out. Bush Jr. did a real good job in that regard.

That is how the rich get richer - and the dumb get dumber, ah... the poor get poorer.

Maybe buying puts is a nice hedge.

 

[B. Kidd]

I just read a story earlier about the founding investors trying to take their money out this morning and attempting to leave the depositors and investors holding the bag...

---

Building managers at Silicon Valley Bank’s Manhattan branch reportedly called the police Friday morning after a group of tech founders showed up and attempted to pull out their cash.

Police responded after a group of “about a dozen founders” went to SVB’s Manhattan location on Park Avenue, journalist Eric Newcomer said in a Substack post. One of the founders was former Lyft executive Dor Levi, who provided Newcomer with text updates from the scene.

NYPD called to Silicon Valley Bank branch as depositors attempt to pull cash: report

Silicon Valley Bank’s sudden cash crunch has sparked fears of a “run on the bank.”

nypost.com

This bank was purported to be rock solid.
Funny it also occurs on a Friday.

 

[B. Kidd]

A sidebar: My daughter-in-law works for Wells Fargo in mid-level management in Cali and they just sent a 1st round of layoff notices this week!
It was enough notices that she is now worried about her job.

 

[airplanemechanic]

Question, who was the president in 2020?

which was the last time the market crashed.

hint he wants to be president again

The stock market had massive gains under Trump. Almost doubled from 16,000 to over 31000 in 4 years of Trump. The liberal shutdown of the economy to try to ensure his loss in the 2020 election is what caused the selloff. Not anything Trump did.

Today a massive tech bank declares bankruptcy, gets taken over by FDIC:

Regulators shut down Silicon Valley Bank in the second-largest U.S. bank failure ever

The FDIC took over the lender — the 16th largest U.S. bank and a tech industry favorite — after a run on deposits and concerns about a broader crisis that led investors to dump other bank stocks.

www.nbcnews.com

Let's go Brandon!

 

[Dagosa]

...says best selling author Larry McDonald.

"They're playing catch up, and while they were doing quantitative easing in 2021, inflation started to rage and now they're trying to catch up," The Bear Traps Report founder Larry McDonald said Wednesday on "Mornings with Maria."

"Our 21 Lehman systemic risk indicators that look at equity and credit point to one of the highest probabilities of a crash in the stock market looking out 60 days," McDonald, who is also known for writing a best-selling book on the Lehman Brothers collapse, cautioned.

Stock market will crash in 60 days, best-selling author on Lehman collapse warns

Market risk indicators are signaling one of the highest probabilities of a crash in the next 60 days. The Bear Traps report founder Larry McDonald advises on how to allocate your capital.

www.foxbusiness.com

Don't have anything to add to that...not a stock expert. It just feels very very Black Monday-esque.

The title of that article is a little misleading...McDonald actually says "best chance" if the S&P earning fail to meet expectations.

I wasn't around in 1929...but I was in 1987.

You experts can discuss the ins and outs of the article...I'm just going to read the replies.

Well, most of the replies.

Not the replies from those who know less than I do who will unfailingly post that everything is fine because hope and fairy dust and a potato in the White House.

Fix business, they keep preaching the wet dream that keeps them going. They hate gov so much, they ‘d be happy to lose their homes and go into bankruptcy during a democrat admin, just to prove them wrong on economics. Problem is, the recessions keep popping up during republican administrations, like ten of the last eleven. Math probability isn’t their strong * suit.

 

[Dagosa]

My fam is sufficiently stocked with food, water, silver, and lead.

Bring it on.

Everything you need to make the NRA supported gop happy. Now, if anyone has an illness and needs health insurance, the gop is no where to be found.

 

[airplanemechanic]

Everything you need to make the NRA supported gop happy. Now, if anyone has an illness and needs health insurance, the gop is no where to be found.

That would be because they should have gotten health insurance before the illness. You don't buy car insurance after the accident.

Stop making excuses you fucking liberal.

 

[B. Kidd]

"And you don't know what is happening, do you Mr. Jones?" - Bob Dylan, Ballad of a Thin Man, Highway 61 Revisited

 

[Dagosa]

That would be because they should have gotten health insurance before the illness. You don't buy car insurance after the accident.

Stop making excuses you fucking liberal.

Oh, you never heard. You don’t buy health insurance as a one time investment. Your wife must be paying the bills; you don’t seem competent enough. Thanks for acknowledging what everyone knows……