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712

"Once confidence and certainty are lost, the willingness to expand debt and leverage collapses.

Even though the first-order effects of the Covid-19 pandemic are still impossible to predict, it's already possible to ask: did the pandemic pop all the global financial bubbles? The reason we can ask this question is the entire bull mania of the 21st century has been based on a permanently high rate of expansion of leverage and debt.

The lesson of the 2008-09 Global Financial meltdown was clear: any decline in the rate of debt/leverage expansion is enough to threaten financial bubbles, and any absolute decline in debt and leverage will unleash a cascade that collapses all the speculative bubbles in stocks, real estate, collectibles, etc.

What's the connection between Covid-19 and the rate of debt/leverage expansion? Confidence and certainty: people will make bets on future growth and take on additional debt and leverage when they feel confident and have a high degree of certainty that the trends are running their way."

https://www.zerohedge.com/markets/did-covid-19-just-pop-all-global-financial-bubbles

"Once confidence and certainty are lost, the willingness to expand debt and leverage collapses. Even though the first-order effects of the Covid-19 pandemic are still impossible to predict, it's already possible to ask: did the pandemic pop all the global financial bubbles? The reason we can ask this question is the entire bull mania of the 21st century has been based on a permanently high rate of expansion of leverage and debt. The lesson of the 2008-09 Global Financial meltdown was clear: any decline in the rate of debt/leverage expansion is enough to threaten financial bubbles, and any absolute decline in debt and leverage will unleash a cascade that collapses all the speculative bubbles in stocks, real estate, collectibles, etc. What's the connection between Covid-19 and the rate of debt/leverage expansion? Confidence and certainty: people will make bets on future growth and take on additional debt and leverage when they feel confident and have a high degree of certainty that the trends are running their way." https://www.zerohedge.com/markets/did-covid-19-just-pop-all-global-financial-bubbles

(post is archived)

[–] • 2 pts

I'm so jealous of Americans when it comes to finance. Australians only have ONE stock exchange, and the fees are fucking ridiculous. Good luck using derivatives unless you have millions of dollars and a private arrangement with the bank, because the fees will fucking kill any profit you make.

I've been trying to get approved for options trading for about a week so I can buy puts.

I think the wuflu is going to get much worse.

[–] • 0 pt

>I think the wuflu is going to get much worse.

That's a given