It seems its really hard for you guys to accept whats coming….. via /r/wallstreetbets


It seems its really hard for you guys to accept whats coming…..

Asset Prices are going to come down and the federal reserve its going to make sure of it by raising interest rates and shrinking their balance sheet which both slow down money velocity and reduce the money supply. Liquidity that the fed provided and has been providing for over a decade is going to take a break (again) and that means stocks and their valuation will be more tied to their earnings (ABILITY TO PRODUCE MONEY FOR THEIR SHAREHOLDERS).

+LEVERAGE and Forced Liquidations

-Funds and Institutions need to unwind the leverage they have been building for 2 YEARS meaning they have to sell assets to cover their margins IT DOESNT MATTER WHAT THE STOCK PRICE IS THEY MUST SELL ASSETS TO COVER DEBT

-As asset prices come down stop losses will be hit forcing more margin covering and forced selling will cascade into a bigger correction

-ASSET PRICES HAVE BEEN OVERBOUGHT FOR 2 YEARS BECAUSE OF LOW INTEREST RATES (FREE MONEY)

-TINA(THERE IS NO ALTERNATIVE)(WELL NO THERE IS) as fixed income returns a higher yield money comes out of risky assets and goes into risk off assets

-The Economy will start slowing down meanings earnings for a lot of companies will go down and their share price in this market environment will follow

THE PLAY: SPX PUTS EVERY FUCKING WEEK UNTIL THE VIX HITS A CLIMATIC MASSIVE WEEKLY CANDLE

ALSO TLDR: DO YOU RETARDS NOT THINK THAT MASSIVE EARNINGS GROWTH THAT HAS BEEN HAPPENING WAS PRICED INTO THE MARKET WHEN THE S&P WENT VERTICAL FOR 2 FUCKING YEARS OFF THE MARCH 2020 LOW SERIOUSLY ZOOMOUT A LITTLE BIT

REMEMBER THIS POST AND DONT FORGET TO POST LOSS PORN

Submitted February 13, 2022 at 06:50PM by SPY_400
via reddit