Irish Stockbroker firm predicts 4.8% growth in 2021

[Tubetec]

So,
despite the damage caused by Covid to highstreet trade ,small/medium enterprise and the hospitality sector in Ireland, one of the top firms of stockbrokers predicts an overall 4.8% rise in economic output in 2021. 2020 saw a rise of around a 2.5% . Of course the fact that the rise is due to Big Pharma/Chemical and IT alone hides the true scale of the damage to indigenous business , not to mention we pay more for our prescription dope here than almost everywhere else in the EU, but I guess thats the thanks you get for allowing your people to be used as guinea pigs 

 

[JohnRoberts]

It shouldn't be difficult to do better than 2020.

Talking about stock news, Democrat senator Ron Wyden has proposed a capital gains tax on unrealized stock market gains. This raises a few obvious questions but seems a spectacularly bad idea.

JR

 

[shabtek]

what about unrealized losses? ;D

 

[Script]

...proposed a capital gains tax on unrealized stock market gains. This raises a few obvious questions but seems a spectacularly bad idea.

Fictitious sale once a year  . Yes, spectacularly bad, even if losses are included. It will hurt small investors only and all private saving plans in particular beyond proportion. If they are after big-fish money, other ideas are needed.

 

[boji]

Capital gains tax on unrealized stock market gains.

Emerging defi market / crypto investors would appreciate it

 

[JohnRoberts]

what about unrealized losses? ;D

Yes that is the obvious one...

Carrying this over to other capital assets, how about unrealized profits from home ownership? Every year pay a tax on the change in your house appraisal?

Presumably after you first calculate the gain, does that become the new basis for future tax calculations?

I converted my retirement accts over to Roth years ago, but I don't completely trust them to respect that deal.

JR

 

[JohnRoberts]

If you've never seen a short squeeze on steroids check out gamestop, the reddit/robin hood crowd have started identifying crappy stocks with a lot of short interest then stirring up buy interest on social media. Since people who short stocks (promise to sell stocks they don't own) have no limit to how much they can lose. They generally have to borrow (rent ) shares from actual owners to make the initial short sale, but when the tide turns against them and they bail out , they start to cover their shorts (buy stock at elevated prices to satisfy their obligation) that just increases the upward pressure crowding out other short sellers. 

Do not buy gamestop. It is a broken business model, but kids today are having fun, torturing short sellers. I have no love for short sellers but this is yet another stock market distortion.

[update- I just checked and Gamestop is up $140 this morning..... still do not buy this massive short squeeze... when the music stops playing there will be no chairs to grab.  [/update]

JR

 

[Tubetec]

One of the stipulations of the bank bailout here was the EU demanded a property tax levied against home owners, its directly linked to property value , roughly speaking if your property is worth 400,000 you pay around 400 euros per year property tax. In the event you never pay it , it mounts up with compound interest and when your dead and gone revenue will step in and pull what ever their owed out of your estate before the beneficiaries of your will ever see a dime.

In the depths of the economic slump of the 80's the IRA were kidnapping bankers and business men , people who had done nothing wrong, amputating digits with cold chissels and sending them in the post along with bullets to their families. The fu**ers who ripped off the country for nigh on 80 billion in the bank bailout walked away saddling the tax payer and in particular household mortgage holders with a debt mountain that may take a generation or two to clear , the people who were in debt for millions got re-financed ,wheres the justice in that ffs.
(Sir) Bob Geldof had it right , na na na republic , septic isle.

Ive never swallowed the click bait of the fast buck / prestige career , I have taken the time to dig well down below the surface and unearth some uncomfortable truths that are completely invisible to those on the way up , a degree in misanthropy from the school of life I call it 

 

[volker]

If you've never seen a short squeeze on steroids check out gamestop, the reddit/robin hood crowd have started identifying crappy stocks with a lot of short interest then stirring up buy interest on social media. Since people who short stocks (promise to sell stocks they don't own) have no limit to how much they can lose. They generally have to borrow (rent ) shares from actual owners to make the initial short sale, but when the tide turns against them and they bail out , they start to cover their shorts (buy stock at elevated prices to satisfy their obligation) that just increases the upward pressure crowding out other short sellers. 

Do not buy gamestop. It is a broken business model, but kids today are having fun, torturing short sellers. I have no love for short sellers but this is yet another stock market distortion.

[update- I just checked and Gamestop is up $140 this morning..... still do not buy this massive short squeeze... when the music stops playing there will be no chairs to grab.  [/update]

JR

Stock closed at 347$ today. A couple of hedge funds are going to really bleed once their shorts are up on friday. And for once actually the little man is going to profit, it is absolutely glorious. The hipocrisy of the financial sector is pretty ridiculous. CNBC are talking down retail investors all day long, experts left and right are calling out for new regulations  ;D.

Market distortion you say? Isn't that the name of the game all the time, everywhere, not just short sellers. It is completely rigged in favor of hedge funds and big investors, making arrangements behind closed doors to squeeze out smaller investors and companies at will. As if big tech companies aren't just inflated in value.

Good summary of what's happening: https://www.youtube.com/watch?v=9ToOGrUQ7ME

 

[john12ax7]

Here's another good video.  Cnbc has been blocking the whole thing due to how silly they look.
https://m.youtube.com/watch?v=xVUBJSnBxKA

It's hilarious that the big boys are now calling for regulation.  It was fine when they did it,  but get beat at their own game and gotta charge the rules.

 

[JohnRoberts]

Short selling is useful to clear out dead wood...

The big hedge funds have mostly covered their shorts, but have had to sell their profitable longs to pay for the losses. More than one is in financial difficulty.

#1, the music on this hasn't stopped playing yet so all the dumb money that piled into this stock already up hundreds of dollars will need parachutes.

#2 the social media/robin hood gang are already looking for other companies with large short positions to gang up on. They will keep doing this until it stops working, thats how markets behave. 

#3 somebody is making money from this, but it won't be the last ones in.

===
The distortion I see is multiple low priced (not low P/E but low nominal share price) stocks with dubious fundamentals that are trading higher than they should be.

Kodak is back in the news again, but GE up over $10 seems rich, but what would I know?

Danger Will Robinson.

JR

 

[3nity]

Could be true.
I work in heavy transport line.
We have never been this busy this time of the year, even other years..despite covid slowing down and despite what governments all around the globe are predicting..

 

[john12ax7]

Short selling is useful to clear out dead wood...

The big hedge funds have mostly covered their shorts, but have had to sell their profitable longs to pay for the losses. More than one is in financial difficulty.

Short selling is fine,  but 130% of the float and something is amiss.  There is dead wood getting cleared, but in this case it's the hedge funds themselves, financial leeches who often add nothing of productive value.

 

[JohnRoberts]

Short selling is fine,  but 130% of the float and something is amiss.  There is dead wood getting cleared, but in this case it's the hedge funds themselves, financial leeches who often add nothing of productive value.

Price discovery is good for markets and short sellers putting their money where their mouth is, sometimes get their ass handed to them. This is OK too... Short squeezes are not new... Elon Musk dealt with a huge short interest in Tesla stock during his early days, when his capitalization was much weaker. He would mess with shorts by making stock moving news announcements on social media and even got in trouble because that was not exactly legal. Now he has more capital than he needs so the shorts have left him alone. 

I worry about all these new day traders thinking they know more than they do***, because they made a profit in a rising (bull) market...

Like is said with a stock like gamestop selling up hundreds of dollars means that the last buyers in, will lose huge money because the real value when the music stops is only tens of dollars or less.

Sadly these new investors may abandon the stock market for years like investors did after the dot com bubble collapsed. There is still a lot of money on the sidelines and I don't want them to be scared off. .

JR

*** I recall during the housing bubble over a decade ago a good (young) friend of mine was flipping houses out in AZ and apparently making profit on every flip. I tried to warn him that prices don't go up to the sky but he told me not to worry.... "he knew what he was doing". He ended up losing his house. 
 

 

[Tubetec]

Lots of people of my generation here in Ireland ended up in big trouble after the property boom .
Some simply had the bad luck to get in at the wrong time and when things went tits up they ended up with a property worth maybe 20-30% less valuable than they payed for it, and so wiped out maybe 10 years worth of repayments.  Others , slightly older, who had the luck to get in at a good point got carried away and took out huge 'lifestyle' loans or in other words remortgaged their property which they had almost payed off , many of these people are now tenants in their former homes or in other cases lost their homes completely. Ironically enough the people who bought multiple properties for speculatory purposes still had a means of repaying their loans from property rental income ,which on average here in Ireland more than covers the mortgage repayments.
Same story as the stock markets in some ways , little guy who dips his toe in the water looses a leg to the predatory shark who drove the boom in prices by speculating . 

 

[JohnRoberts]

Lots of people of my generation here in Ireland ended up in big trouble after the property boom .
Some simply had the bad luck to get in at the wrong time and when things went tits up they ended up with a property worth maybe 20-30% less valuable than they payed for it, and so wiped out maybe 10 years worth of repayments.  Others , slightly older, who had the luck to get in at a good point got carried away and took out huge 'lifestyle' loans or in other words remortgaged their property which they had almost payed off , many of these people are now tenants in their former homes or in other cases lost their homes completely. Ironically enough the people who bought multiple properties for speculatory purposes still had a means of repaying their loans from property rental income ,which on average here in Ireland more than covers the mortgage repayments.
Same story as the stock markets in some ways , little guy who dips his toe in the water looses a leg to the predatory shark who drove the boom in prices by speculating .

History doesn't repeat but as they say it often rhymes. Like back then we have a surplus of liquidity driving the housing bubble.

The recent craziness with the game stop short squeeze is almost amusing to watch as the news talking heads try to explain it to the public. But many of the business news media don't get it either.

Using short squeezes to spank competing hedge funds is what they do for sport to entertain themselves. This may just be more of the same.

Do not be distracted by the millions lost by hedge funds shorting gamestop, the bigger losers will be the robin hooders who followed social media influencers into these stocks after the bottom falls out of this particular stock after the crazy run up, and it will, they always do.

To be serious follow the money and money in modern trading comes from getting paid to route transactions through a brokerage that can let high speeder traders skim their cut... This recent drama has generated millions of extra daily trades. That is the real treasure being harvested here.

I worry that it will turn off all the new dumb money that suffers losses to avoid the stock market for another decade.

JR

 

[JohnRoberts]

and the drama surrounding the massive gamestop short squeeze continues... big tech had decided to suspend trading on gamestop (closing the barn door after the horse is already gone). They clearly can't do this and will get sued. I think it was un-halted again already.

I still suspect there are big money fingerprints behind this squeeze so it isn't as simple as little guys against hedge funds but that is the romantic story line. Ignore the big money man behind the curtain.

The DC politicians will surely try to somehow fix this while not even close to understanding the game at play, but they know which side of their bread is buttered so will support the big trading companies that make big campaign contributions.

A lot of greed is showing in plain sight.

JR

 

[JohnRoberts]

I am too lazy to research this but the hedge funds who got their face ripped off by the short squeeze, had to sell off a lot of their successful long positions, so there may be a short term opportunity to pick up a few bargains from their margin call liquidation.

Media will continue the David vs Goliath story line, and government will say we need to step in and fix this be cause we are the government. Both wrong.

Market price manipulation is already illegal (google the Hunt brothers), and coincidentally some of these new social media stock market gamblers were looking at driving prices higher for commodities like silver. 

JR

 

[JohnRoberts]

Don't listen to day trading advice from old pukes on the internets (like me), but please understand the downside to margin investing. A popular but dangerous technique used to juice returns when trading stocks is to invest more by using borrowed money. In a rising (bull) market the stocks purchased with borrowed money can serve as collateral for these margin loans. The flip side to this is that when the stock prices for these shares serving as collateral fall, the lender can make a "margin call" effectively asking for more collateral to cover possible losses. This can feed upon itself when margin call forced selling depresses stock prices further, leading to even more margin calls. Of course the brokers still make their money coming and going, but the individual investors can get wiped out, before they can sell off their falling long positions (this is called trying to catch a falling knife). 

If you are making money on the reddit/robin hood short squeeze congrats... don't get trapped in a margin call when the music stops. Game stock is not a $300 stock, so it will eventually revert back down to fundamental pricing so be careful.

JR 

 

[john12ax7]

and coincidentally some of these new social media stock market gamblers were looking at driving prices higher for commodities like silver. 

This is simply not true,  despite what several media outlets are reporting. The actual facts are easily verified by simply spending some time reading the reddit thread at the center of things.

The real manipulation is trying to create the illusion of a short squeeze in SLV.  Who owns very large long positions there? The very same funds getting crushed by GME.

I agree about caution with margin.  But again the real problem is the institutions which are overleveraged, doing all kinds of mischievous things creating systemic risk to the entire system.  But of course the retail investor will get blamed if things go too far south.