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Posted by jart 2 days ago

The Great Unwind(occupywallst.com)
322 points | 343 commentspage 3
seydor 2 days ago|
Nothing that cant be fixed with threats to invade okinawa or 100% tarriffs to matcha or sth
elaida73 2 days ago||
>By anchoring borrowing costs at or near zero, the BOJ enabled Wall Street to borrow Yen cheaply and invest it with leverage into higher yielding instruments globally, such as U.S. treasuries, equities, and cryptography

Think you mean crypto currency here?

largbae 2 days ago||
They got the word wrong, but I don't believe cryptocurrency would count either: The interest rates at BoJ _are_ low, but to borrow anywhere near that low they have to have high quality collateral like treasuries.
soperj 2 days ago||
No, they've got into cartography now. Have you never heard of a bitmap?
thrownawaysz 2 days ago||
Sounds good, too bad I only have $5k available. Even if I spend all on FXY it won't gain that much from the current $58.6 in the forseeable future. Rich get richer I guess so nothing changes just the location.
jayd16 2 days ago||
> then you buy treasury bonds that pay 4%

> used by a generation of investors

How short is a generation for investors? Aren't we near 20 year highs as far as US bond rates?

I guess the point is that this is more about the Yen than about US bonds?

gwbas1c 2 days ago||
A lot of the financial jargon makes the article hard to follow. I know I'm not the target audience, but I wish at times there were some plain English summaries of terms.
marcosdumay 2 days ago|
The Japanese central bank arrived in zero effective interest rates in the 90s, and has been practicing negative effective rates (I.E. smaller than inflation) for a while.

That had the effect that their banks took huge amounts of government loans and used it to buy foreign assets. As returns are higher in countries with higher interest rates, and lots of assets are practically safe, like government bonds, that is close to free money for them, and a very cheap loan to the receiving country.

But last year their central bank made the interest rate positive. And investors are acting on the expected way, selling the foreign assets and paying off their government. The article is claiming that this is the cause of the recent turbulence in the investment markets.

gwbas1c 2 days ago||
Thanks, that was generally how I interpreted the article.

The issue was the terms. There was a lot of logic inversion that someone who's much more familiar with the terms could probably follow, especially when trying to understand how an investment in Microsoft was loosing value when the investment was from a loan in yen.

Likewise, the end of the article uses a lot of abbreviations, especially when referring to Australian currency, which I just don't understand at all.

marcosdumay 1 day ago||
TBF, I don't think he explained why he things Microsoft is going down because of that. He talks about timing, but stocks aren't a very common carry trade investment (from any country), and it didn't start unwinding last week.

Those abbreviations are mostly for foreign exchange derivatives. That is, contracts that don't involve trading currency, but have terms that depend on the price of those currencies.

Derivatives are quick to react to anything, so if you are looking for some kind of trigger signal, you will find it there first. But they are also quick to react to nothing, so even if you find a trigger signal there are still some good odds that nothing happened.

One one relevant index there that isn't a forex derivative is VIX. Well, it's supposed to measure how much the S&P500 will go down in the future, but I have no idea what actually goes in it. If you want to look into it, I think the place to start is this:

https://www.spglobal.com/spdji/en/vix-intro/

(Oh, and the article makes a great deal of VIX being low, but on the time we took to read and discuss it, it's already quite high.)

rvz 2 days ago||
Either way, we all know a crash is due before the next decade (everyone is IPOing to the exit), and if you don't realize that by now, well...
barbazoo 2 days ago||
I'll bite. Isn't as obvious to me as it is to you, I'm just a programmer, I don't know how the economy works. This is literally the first time in my life I heard anything about governments borrowing Yen like this and that this would become an issue.

I'm aware of an "AI bubble" and the over-concentration on the "Magnificent 7".

What else is obvious to people and why is the timeframe (next 4 years) so obvious?

marcosdumay 2 days ago|||
Well, investment markets all over the world are not reflecting the real economy right now. You can see that on how stock prices don't reflect how wealthy you feel and maybe more clearly in how house prices are completely unrelated to the amounts people can pay.

That's the obvious part. The consequences of that are anyone's guess, as is the timeframe. But it's not a sustainable situation, so something is bound to happen to change it eventually.

9dev 2 days ago||||
It’s not as obvious as they claim. If it was, if the future was somehow predictable, there would be software that did it; there isn’t.

People have been claiming the end is near since forever; economists have been saying for months now that stocks should already be falling, but they are going up. And also, it feels good to be part of the in-group that just knows more than everyone else. Just ask a prepper: they will be equally convinced.

So in summary, even if we’re headed for another crisis, unless you’re only a few years from pension, you’ll just sit this one out calmly, just like all crises before. Unless the global economy breaks down for good (in which case you’ve got other things to worry about), your ETF will recover. Don’t let the fear mongers get into your head.

wilkommen 2 days ago|||
The entire stock market basically functions as a funnel of wealth from the middle class to the rich right now. When OpenAI and Anthropic IPO, they'll be megacap stocks and 401ks and pension funds the world over will invest in them. Then insiders will cash out, and the AI bubble will collapse. USD will have transferred from the retirement accounts of middle-class people to the rich. This is how all stock market crashes work. This one is especially interesting because the middle class is already so squeezed - how many more times can they pull this trick off? Seems like it can't go on many more times.
jart 1 day ago|||
That's not how the Google IPO worked. If you bought that at IPO and held it this whole time, you'd be very rich by now. Which is why the financial system will never let that happen again. These days many of the companies that go public will be nefarious financial schemes in Florida that hired and fired a guy in a San Jose at one point (thus transforming the scheme into a Silicon Valley startup) and anything good like Anthropic you need permission to invest in them, or you invest in them by proxy. If you want to long OpenAI you then you long Microsoft. If you want to long Anthropic then you long Google. Guess which one the carry traders liked more these past few days?
machiaweliczny 2 days ago|||
Yeah, I think people have had enough this time its not gonna fly
layer8 2 days ago||
People already said that last decade.
RayMan1 2 days ago||
Great piece, I like the VIX part the best. Do you need any help with your site?
ricksunny 2 days ago||
Smacks of:

"support my thesis and ignore alternative explanations and contrary evidence on whether there's even a there, there" AI-research slop.

joshuamcginnis 2 days ago||
> In short, occupywallst.org is a living archive and occasional update point for a landmark left-wing protest movement that put economic inequality and corporate power at the center of national conversation starting in 2011.

Is this true?

bfung 2 days ago|
Dunno about the website or corp, but the occupy wall st movement was/is true. Happened right after 2008 stock market crash and people camped out on Wall Street in protest of bailing out the banks.
irishcoffee 2 days ago|||
One can make the argument that trump was elected because of OWS knock-on effects...
johnvanommen 2 days ago|||
> One can make the argument that trump was elected because of OWS knock-on effects...

Absolutely.

And guys like Tim Poole got famous off Occupy, then parlayed that fame into building an audience for themselves.

The libertarians at OWS never went away, they just found new causes.

I was at the HUMONGOUS rally that Obama held in Portland in 2008.

The epicenter of OWS was based a few blocks away, years later, and reflected the optimism of 2008 hardening into frustration over Wall Street excess.

tolerance 2 days ago|||
I’m listening—...
DiscourseFan 2 days ago||
Just, like, it was the first populist political movement following the ‘08 crash, and while Obama was supposed to be the liberal technocratic answer to the failure of neoliberalism, he was not able to create policies that restored the social and economic post-war order in the US. After Bernie Sanders lost the 2016 nomination, the populist left, which still retained a hope of a new kind of society, no longer had a political representative, and Trump managed to clinch the nomination by campaigning in states that had been neglected by the Clinton campaign. Biden was another, more radical but still fundamentally liberal technocratic attempt to save the status quo of America politics, but the largest economic gains were for the educated professional class, and many people in the country felt left behind and ignored—-again, now with the backing of popular support, Trump won the 2024 election with a promise to completely reshape the country. And he has at least in part succeeded.
giraffe_lady 2 days ago|||
How do you get from occupy to the tea party is the link this hypothesis is missing.

Tea party was the clear predecessor to the maga movement, with its nucleation point being simple racist backlash against obama and trump being personally & directly involved in stoking that racism. In retrospect it obviously laid the groundwork for trump's movement, and I can't see any direct link from occupy to tea party other than perhaps some individuals like tunney.

DiscourseFan 2 days ago||
I think the Tea Party is only tenuously connected to Trump. A lot of his policies involve a lot of government spending and federal overreach, and his policies are often opposed by the Freedom caucus. Historically, anyway, right wing populism tends to follow the collapse of the radical left and becomes a dark mirror of those very same movements, attempting to absorb their energies (Steve Bannon’s Leninism, Trump’s workerism). The tea party was, conversely, the last cry of reaganism and the dream of mixing traditional life with libertarian economics, which was flawed from the start as it was that very same deregulation which led to our contemporary technologically inflected society where all social norms are broken for the sake of profit. So the tea party was not the legitimate bearer of world history.
giraffe_lady 20 hours ago||
I don't think we're on the same page here, I don't see that trump's policies are particularly central to the appeal or power of his movement. They aren't even important to trump.

The tea party was a right wing populist movement and maga is an extreme right populist movement that emerges a handful of years later, with astounding overlap in membership, and you don't think they're connected? ok.

tolerance 2 days ago||||
Hmm…there has to be more to it though right? The timeline tracks but it looks like there are events missing in between. How do we go from OWS to things like “Drain the Swamp” within a span of roughly five years?
DiscourseFan 2 days ago||
Its a rough sketch. In the end, the viccisitudes of individual history are unable to capture the broader conditions of the events they take place in.
tolerance 2 days ago||
Either no single name/event mentioned in the timeline you provided was remarkable enough to furnish such a vista on its own, or you’re correct.
worik 2 days ago|||
Yes

Trump told people "you're OK".

It is what people need to hear

GorbachevyChase 2 days ago||||
I would make the correction that the protest movement was not left wing. I think he’s trying to take credit for his favorite team. TARP was opposed by 80% of Americans. It passed legislation anyway. I think there’s a good lesson to be learned in how performative and inconsequential the electoral process is.
barbazoo 2 days ago|||
Carried over to Europe too, I remember the camps and protests in many cities' financial districts.
Havoc 1 day ago|
Seems like a pretty fragile analysis
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